Capital Markets & Governance

Perfect's Listing: Why Negative Shareholders' Equity? Preferred Shares and 26 Times Sales

Share this article
LINEFacebook

Robin's commentary

Storage information

Bookmarks and reading positions are stored in this browser. Manage and back them up in My Reading.

Collected in Robin Shen’s Field Notes · Content type and attribution are shown above

English translation of the Chinese post originally published 2022-11-01. Translated 2026-10-25 with AI assistance. Historical figures and claims have not been updated or independently verified. 中文原文

Reading guide

Using Perfect's prospectus, Robin explains why a company using an overseas fundraising structure can have negative shareholders' equity. After the original shareholders, each financing round involves preferred shares, which are classified as liabilities under IFRS because of their special terms. Before listing, Perfect had US$93.83 million in assets and US$252 million in liabilities, including US$231 million of liability-classified preferred shares. At the closing share price at the time, it was at unicorn scale. First-half 2022 revenue was US$23.38 million, with an 86% gross margin. Estimating full-year revenue at about US$50 million against a US$1.3 billion market capitalization gives a price-to-sales ratio of about 26. Listing expenses alone reached US$48.66 million, about NT$1.5 billion. These figures reflect the 2022 prospectus; the sales multiple is Robin's estimate.

Key points

  • Special terms cause preferred shares to be classified as liabilities under IFRS, producing negative pre-listing shareholders' equity.
  • Of Perfect's US$252 million in liabilities, US$231 million consisted of preferred shares classified as liabilities.
  • First-half 2022 revenue was US$23.38 million, with an 86% gross margin; a US$1.3 billion market value implies about 26 times estimated annual sales, by Robin's calculation.
  • Listing expenses were US$48.66 million, approximately NT$1.5 billion.
Columns and beams in an open building are connected by central rods and balanced weights, suggesting structure and checks in governance.
Capital markets & governanceThematic illustration · AI generated

Full text — English translation

Personally, I hope Taiwanese investors become more accustomed to negative shareholders' equity, and I hope securities regulators do too. Under the overseas fundraising structures currently used, the original shareholders hold common shares, while subsequent rounds involve Series A, B, C, and other preferred shares. Because these preferred shares have various special terms, they are currently classified as liabilities in IFRS financial statements. So, in Perfect's pre-listing IFRS figures, assets were US$93,832 thousand, but liabilities reached US$251,732 thousand. Most of that was preferred shares classified as liabilities: US$230,863 thousand. The share count in Perfect's prospectus does not appear fully settled. Even if SPAC shareholders choose not to participate in the conversion (?), there would still be at least 118,263,795 shares. At yesterday's closing price, it is indeed at unicorn scale. First-half 2022 revenue was US$23,378,774, with an 86% gross margin. Multiplying by two for the full year gives around US$50 million? If the current market capitalization is US$1.3 billion, the price-to-sales ratio is about 26. Full-year 2021 revenue was US$40,760. Incidentally, Perfect's estimated listing expenses this time, shown in item BB, were US$48,660 thousand. At the current exchange rate, that is an astonishing NT$1.5 billion. XDD I will see whether I can find comparative financial figures for more past periods before assessing the long-term development trend. https://www.sec.gov/Archives/edgar/data/1899830/000110465922110770/tm2227810-3_424b3.htm?fbclid=IwAR25ONdAOkgMSJ_f0MQTsiotBNVqil4S9Mlcd0kwZmeBnzq6O7yOS8ebEYo

These articles are personal notes, book excerpts, and collected reprints. Figures and events reflect the time of the original publication, are not current information, and do not constitute investment advice.

Share this article
LINEFacebook

DISCUSSION

Reader comments

What did this article make you think about? Different perspectives and constructive criticism are welcome.

Comments are public immediately. Do not include personal contact details or external links. Automated checks block suspicious solicitation, prohibited transactions and spam; they can make mistakes.

0 / 2000

Comments load when you reach this section.

    Administrator sign-in

    My reading notes

    These notes stay in this browser and are not published. Writing a note also saves the article. Back up or move your notes in My Reading.

    Manage my bookmarks and notes →

    STAY CURIOUS

    Save a good question for your next visit.

    Save this article, or follow the Facebook page and RSS feed for additions. Historical articles retain their original publication dates.

    Browse All articlesSearch articles and full text →