The coming IPO of WONHE seeks to raise up to $4m. WONHE Multimedia Commerce Ltd is an Australian Company with principal operations in mainland China.
Over the last 15 years the Asia Pacific region has overtaken Europe to become home to the world’s largest number of wireless internet connections. For the past five years it has witnessed the second strongest growth in wireless network connections, behind Middle East & Africa. As a result, more than 50% of total wireless networks are located in the Asia-Pacific reason.
An increasing amount of Asia Pacific internet use has become subscription driven. Penetration of Post Paid connections have risen from 20 to 25 per cent over the past five years, however with Western Europe currently at 58 per cent and North America at 86 per cent, there remains significant scope for further growth.
Amid the growth in wireless services demand, the coming listing of WONHE Multimedia Commerce aims to capitalise on the confluence of media and internet within the home entertainment space. Founded in 2010, WONHE’s operations are located in mainland China, with a principal focus on hardware supporting media and communications such as wireless routers.
Whilst the Company has been profitable for the past three years selling three principal products, proceeds from its float are scheduled to facilitate new product development. Incentive for participants in the Initial Public Offer include WONHE’s balance sheet and dividend policy. The Company intends to pay 10-20 per cent of net profit as dividends, whilst reported cash reserves of $50million illustrate capacity to invest in new product development and marketing initiatives.
With its offer price representing a discount to net assets, WONHE may strike a chord amongst value inclined investors. However they will need to overlook complexities surrounding its ownership structure, recent earnings volatility, product concentration risks, and vagaries associated with China focused listings.
Company: WONHE Multimedia Commerce Ltd
ASX Code: WMC
Shares on Offer: 25million
Listing Price: $0.20
Market Capitalisation: $31million
Listing Date: September 17th
Author: Tim Morris
Sep 15, 2015
Having studied Commerce and Science at the University of New South Wales, Tim began his career in an analytical capacity with Wise-owl. Tim has conducted over 500 corporate valuations and appraisals, specialising in pre revenue assets and emerging markets. For the last five years, his Equity Capital Market insights have been featured as part of a weekly column in The Australian and regularly features on Sky News, CNBC, ABC and Bloomberg TV.