iProperty Group Ltd (ASX: IPP) today revealed another strong quarter of year-on-year growth, with revenues for the third quarter of the calendar year up 67% over the prior corresponding quarter.
Total quarterly revenues of $8.6 million were slightly down on the prior quarter due to seasonality, although the group confirmed it's on track to meet June's guidance for full year revenue between $32.5 million and $36 million.
The group also posted a positive operating cash flow of $0.5 million for the quarter, with June's guidance for full year EBITDA in the region of $3 million to $6 million expected to be met.
iProperty sits in an Asian growth sweet spot made all the juicier by the digital tailwinds it harnesses via the migration of real estate advertising revenues online as buyers, sellers and developers view or list properties for sale or rent over the internet.
The market-leading Malaysian website, iProperty.com.my, a blueprint for success as the website's network effect means it attracts the most market participants seeking to get the best possible financial deal for themselves.
This network effect naturally builds a competitive advantage over rival websites and offers the opportunity to build pricing power over time.
Malaysia is the current jewel in iProperty's crown, although its Hong Kong and Thailand operations are also growing strongly and have plenty of potential.
The business also has operations in the Philippines, Indonesia and Singapore, while branching out into the popular property expo and events industries among others.
The market-leading network effect has long been enjoyed by iProperty's Australian doppelganger REA Group Limited (ASX: REA), which now owns nearly 23% of iProperty after steadily increasing its holding throughout 2015.
It's not known whether REA Group is planning a full takeover bid or if it perhaps wants to build an effective controlling stake similar to what News Corp (ASX: NWS) has with REA Group itself.
Either way the support of REA Group is a positive and recognition of the fact that iProperty is well positioned for a digital future media businesses like News Corp and Fairfax Media Limited (ASX: FXJ) are desperate to expand into, especially within Asian economies that commonly grow at 2-3x the rate of their Western counterparts.
iProperty stock lifted 7% to $3.23 on today's news and relative to its earnings it retains a lofty valuation around $560 million. However, in my opinion this looks a fair reflection of its potential.
