CoAssets to be First Crowdfunding Company to List on ASX
More than 1,200 users have participated in crowdfunding projects to date and growth in user and project base will be the primary the catalyst.
CoAssets Limited is an Australian software company focused on peer to peer lending (“P2P”) and crowdfunding. The company seeks to raise up to $10m via an initial public offering to list on the ASX on 5 July.
Its primary asset is a web-based crowdfunding platform that connects investors with businesses and property developers that need capital. The holding company was incorporated in 2015 and owns CoAssets Singapore and Australia. CoAssets is listed on the National Stock Exchange of Australia (NSX) with the ticker CAX.
Despite being an early stage company CoAssets is generating revenue and posted a net profit of S$0.3m during H1FY16. Due to a high degree of fixed costs, the company has operational leverage to incremental contract wins. More than 1,200 users have participated in crowdfunding projects to date and growth in user and project base will be the primary the catalyst.
The company has a limited operating history and while it only recently shifted to profit, it has not eliminated its reliance on external capital. The company operates in a number of different jurisdictions in Asia and there is a risk that regulatory changes may impact the company’s ability to generate revenue. Free float is high and as management has a substantial interest, the influence of minority shareholders on strategy and corporate governance is low.
CoAssets offers speculative exposure to demand for online crowdfunding. Crowdfunding is an evolving concept and while the valuation assumes a certain degree of business success, investors are required to have a speculative appetite for this start-up.
Company: CoAssets Limited
ASX Code: CA8
Shares on Offer: 25m
Listing Price: $0.40
Market Capitalisation: $72m
Listing Date: July 5
Author: Simon Herrmann
Jun 28, 2016
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.