ASX stock of the day: 8I Holdings (ASX:8IH) shares spike on profit surge

The 8I Holdings Ltd (ASX: 8IH) share price has spiked today, rising 8.33%. Here's why this ASX share has been making moves.

| More on:

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The 8I Holdings Ltd (ASX: 8IH) share price has spiked today. 8I shares are up 8.33% to 20 cents a share at the time of writing, after surging as high as 22 cents a share earlier in the trading day. 8I shares closed at 18 cents a share yesterday and opened at 20 cents this morning, where they have trended back to after this morning's spike.

It's been an interesting year for this company, share-price wise. It started 2020 at 9 cents a share, where it has hovered for most of the year, with occasional swings to 10 cents and 12 cents a share. Last month, 8I shares briefly spiked as high as 36 cents a share, but have trended lower since.

8I has had a rough trot since the company's initial public offering (IPO) on the ASX back in November  2015 (almost exactly 5 years ago). 8I hit the ASX boards at $1 a share and briefly rose as high as $1.38 over the subsequent month or two. But it has been downhill ever since, with the shares reaching a low of 5.5 cents last year.

So why is the 8I share price spiking today?

Who is 8I Holdings?

8I is a Singapore-based company that claims to have a vision to "change the financial education landscape". It was founded in 2006 when (in the company's words) "8 individuals decided to come together to analyse companies in the stock market using the principles of value investing, a concept that was not known to many back then." 

As you might have gathered, 8I is in the funds management business. It has one flagship fund – Hidden Champions Capital Management – which is based in Singapore and invests in public companies in the Asia-Pacific region. According to the company, its strategy is based on "value-adding, nimble and scalable growing 'Hidden Champions' that are typically at the forefront of their markets to achieve long-term investment returns."

In addition to this fund, 8I also offers a financial education technology by the name of VI. VI is a proprietary stock analysis tool that analyses traditional financial data and claims to simplify "the complex stock analysis and decision-making process for equity investors into easy-to-use visuals".

This technology is operated through a separate company called 8VI Holdings Ltd (ASX: 8VI), of which 8I is the majority shareholder.

Why are 8I shares spiking today?

Today's dramatic share price move can likely be put down to two reasons.

First, the company's half-yearly interim report, covering the 6 months to 30 September 2020, which was released on Monday night. In this report, 8I told investors that revenue and investment income came in at S$17.88 million, up 272% from the same period last year. That helped profits after tax rise 655% from the same period in 2019 to S$6.59 million.

The company attributed the growth in revenue and investment income to the improved performance of its restructured Hidden Champions Fund.

Second, the 8VI Holdings share price has been on a tear in recent days. As we discussed earlier, 8I holds a significant stake in 8VI, so any gains that 8VI make also boost the valuation of 8I itself.

8VI shares are up 16.18% just today, and have climbed almost 80% this week alone, giving the company a market capitalisation of $63.4 million. 8I Holdings itself has a current market cap of $70.9 million.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Share Market News

Why Calix, Collins Foods, Myer, and Patriot Battery Metals shares are charging higher

The S&P/ASX 200 Index (ASX: XJO) is back on form and charging higher on Tuesday. In afternoon trade, the benchmark index…

Read more »

Man in yellow hard hat looks through binoculars as man in white hard hat stands behind him and points.
Opinions

Are Fortescue shares a contrarian buy after falling 20% in a month?

Are investors putting too much weight on the jitters of the market or is the Fortescue fall fair?

Read more »

A young woman wearing a blue and white striped t-shirt blows air from her cheeks and looks up and to the side in a sign of disappointment after the ASX shares she owns went down today
Share Fallers

Why DroneShield, Paladin Energy, Red 5, and Synlait shares are falling

These shares are having a tough time on Tuesday. But why?

Read more »

Man raising both his arms in the air with a piggy bank on his lap, symbolising a record high.
Bank Shares

Nine-year highs: NAB share price glides to highest level since 2015!

The bank has notched up another inflection point today.

Read more »

ANZ ASX 200 banks capital return Group of investors madly grabbing for cash on city street.
Healthcare Shares

ResMed shares rebounding as investors rush to buy the dip

ResMed is rising as ASX investors buy the dip following yesterday's 13% share price dive.

Read more »

A woman screams and holds her hands up in frustration.
Share Market News

Why is short interest in Sayona Mining shares growing?

Why won't short sellers leave this lithium miner alone?

Read more »

A woman in a bright yellow jumper looks happily at her yellow piggy bank representing bank dividends and in particular the CBA dividend
Bank Shares

CBA shares hit another new high! Too late to buy?

At today's new record price, CBA's market capitalisation is just $1 billion short of the ASX 200's most valuable stock,…

Read more »

A group of stockbrokers sit in a room with several computer screens in front of them as they discuss the Zip share price and Zip's merger with Sezzle
Broker Notes

Why these 3 ASX 200 shares just gained significant broker upgrades

The brokers just boosted their outlooks for these ASX 200 shares. But why?

Read more »