KGI Research Singapore

Singapore's leading broker offering Futures, FX, Equities and Wealth Management.

Company Initiation: Winking Studios Limited

Company Initiation: 29 April 2024

Visualising the future of gaming

Inorganic growth strategy. Winking Studios Limited embarked on an inorganic growth strategy to bolster its sales volume. This initiative culminated in the full acquisition of On Point Creative Co., Ltd. on 1 April 2024. Aligned with the company’s expansion objectives, this strategic move not only secures two additional global game publishers as clients but also promises to amplify its top-line growth trajectory.

Continued organic growth.

Winking Studios remains committed to sustaining organic growth alongside its acquisition endeavours. In addition to expanding its client base through the acquisition of smaller art outsourcing studios, the company has bolstered its internal business development team. This team is dedicated to securing sales from key markets such as Japan and the United States, further diversifying its geographic reach. Furthermore, Winking has demonstrated consistent workforce expansion, with an annual double-digit growth rate. This strategic increase in manpower positions the company to tackle larger and more extensive projects from various publishers, driving sustained growth and market competitiveness.

Gaming industry growth.

Winking exceeded expectations with robust performance growth in FY23. The company achieved an impressive overall revenue growth of 19.5% YoY, driven primarily by heightened contributions from its art outsourcing and game development segments. The 9.5% YoY increase in art outsourcing revenue stemmed from securing new contracts from customers in key markets such as the United States and South Korea. Notably, the game development segment witnessed a remarkable 124.3% YoY surge, fuelled by expanded business with existing clients and the acquisition of projects from new customers.

FY23 financial review

The gaming industry is poised for significant expansion, with a projected CAGR of 3.7% expected to propel it to a valuation of US$205.4bn by FY26. This upward trajectory is underpinned by the rising popularity of e-sports and the influential role of content creators in shaping gaming trends. Today’s game developers benefit from an array of platforms for game releases, including PC, mobile, PlayStation, and Nintendo Switch, enabling simultaneous launches to diversify revenue streams. Moreover, as player expectations for immersive gaming experiences continue to rise, developers face the challenge of delivering larger worlds and more impressive graphics, driving an upward trend in game development budgets. The robust expansion of the gaming industry, fuelled by e-sports popularity and evolving gaming trends, will enable Winking to capitalize on increased demand for its art outsourcing services across diverse gaming platforms, driving revenue growth and market prominence.

Valuation & Action

We recommend an OUTPERFORM rating for Winking Studios, with a diluted target price of S$0.34 and a non-diluted share price of S$0.47. These figures are derived from a DCF analysis, incorporating a terminal growth rate of 2.0% and a cost of equity of 12.0%. As the company progresses with its expansion plans and experiences enhanced revenue growth driven by the expansion of its art outsourcing segment and increased sales from its business development team, we anticipate this positive trend to persist and reflect in the FY24 revenue figures.


Margin pressure due to competition and lower-than-expected new order wins.


Video of trainee drawing a 3D sculpture

Video of employee filming a motion capture scene for in-game motion

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