Do you know the two small-cap ASX superstars with more potential to take Asia by storm than anyone else? Did you know they're also backed by two of Australia's most successful tech startups and operate in countries that have a combined population of 20x Australia?
Most likely you've already guessed that I'm referring to iProperty Group Ltd (ASX: IPP) and iCar Asia Ltd (ASX: ICQ). iCar and iProperty were both listed in 2013 and founded by current chairman Patrick Grove, who also founded ASX-listed company iBuy Group Ltd (ASX: IBY), which has since been renamed to Ensogo Ltd (ASX: E88).
iProperty Group owns real-estate listing websites and iCar Asia owns car listing websites operating exclusively in Asia, with the plan of replicating the success that Carsales.com Limited (ASX: CAR) and REA Group Limited (ASX: REA) have had in the much smaller Australian market.
Huge Opportunities
With iProperty group expected to convert its positive cashflow into a positive net profit result in a year or two, analysts are starting to question whether 19.9% shareholder REA Group, owner of realestate.com.au, will make a move for the small-cap dynamo!
Analysts at Credit Suisse estimate that iProperty group can grow revenue at 20% per annum over the next 8 years, which could easily see its market cap grow at the same rate as profit margins will improve with scale.
iProperty's market cap today stands at $465 million, compared to $5.2 billion for REA Group. Growing at 20% per annum could see that market cap at over $2 billion by 2023! For reference, REA Group grew from a market cap of $484 million to $1.8 billion between 2006 and 2012- a period of 8 years!
The analysts at Morgans are equally bullish, pointing out that iProperty could be worth as much as $5.35 (more than double today's $2.48) if some more aggressive assumptions are used on the path to profitability.
Takeover Potential?
While iProperty group has had exceptional success so far in establishing market-leading positions in Malaysia, Hong Kong, Thailand, and Indonesia, and the second spot in Singapore, most agree that REA Group will wait for more results before making a move.
