Share Price Calculation (Very Speculative): Take note: P/E is by no means the end all valuation, if anything far from it but should provide an idea of the minimum rather than maximum.
P/E:
I used two sources:
First Source: A business case done on the Fintech industry conducted by mercer capital (http://mercercapital.com/assets/Mercer-Capital-2014-Q4.pdf) which studies multiple IPO and large Financial Tech/Solutions companies.
They came up with the average P/E for Financial Tech:24.6 and Financial Solution:21.2 (as seen on page 2) Im leaning to 25 since we are both Tech + Solution + Hype factor.
Secondary Source: A more general study done by New York University on standard P/E across multiple industries. (http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/pedata.html)
They have a P/E of 26.47 for financial services with an average market cap of 8.53m for the study(low MC suggests mostly new companies which comes more accurate for our evaluation)
I've settled on a P/E of 26 using both sources.
P/E = SharePrice/Earnings Per Share(EPS)
SharePrice = (P/E )*EPS
EPS = Earnings/Shares
As Dr. Seuss pointed out, P/E doesn’t really work with penny’s and is far from the deciding factor as most of the price is based on potential and hype rather than income. We’ve seen countless penny stocks make multibag runs with no income and negative cash flows.
MW has done the unseen and has acquired an actual revenue generating business, the scary thing is we don’t know how market reacts to a business acquisition as we are more used to see “idea” or “potential business” acquisitons.
What has been Acquired:
SRT has entered a conditional term sheet to acquire a 100% shareholding interest in each of Intiger Asset Management Pty Ltd (ACN 606 729 328) , Intiger Process Enhancement Pty Ltd (ACN 610 159 209), Intiger Asset Management Limited (a Hong Kong Company), HKCN: 2211671, Tiger 1 Limited (a Hong Kong Company), HKCN: 2258742, Tiger 2 Limited (a Hong Kong Company), HKCN: 2258743 and Lion 2 Business Process Inc. (a Philippine Company), PIN: CS201522320 as well as indirectly acquiring 100% of Integra Asset Management Australia Pty Ltd (ACN 162 734 376) a wholly owned subsidiary of Intiger (together the Intiger Group). – From the Ann
In summary, we have:
Tiger 1
Tiger 2
Lion2 Business Process
Integra Asset Management
Intiger Asset Management + Intiger Asset Management Hong Kong
Now to find out what these are?
Tiger 1/2 and Intiger Asset Management Hong Kong are all based in Hong Kong. Something is clearly brewing in Hong Kong? Possibly in the Ann stating “track record of delivering the industry’s first scalable offshore processing platform”, perhaps we are scaling offshore to Hong Kong as well.
Lion 2 is their Philippines BPO (Business Process Outsourcing) company. Which would mean Tiger1&2 would be the Hong Kong BPO using logic. Maybe we will have another big cat to add to the family in the future – Jaguar, Cheetah etc etc lol.
Now for the interesting one, what is Integra Asset Management (IMPORTANT)? http://integraassetmanagement.net/ which provides links to “Financial Planning” “Property Mangement” “Financial Services” all links redirect to Intiger Asset Management.
Edit: The website has actually changed while making this document, the URL now completely redirects to Intiger on chrome browser. The old website format can be seen here:
Strangely the website above shares the same logo and name as http://www.globalintegra.com/ which is a company based in U.S.A with 300 employees.
Integra Global Solutions provide endless services to assist start-up companies and business’s which include and not limited to:
- Book-keeping and Accounting
- Web Design and Graphic Design
- Virtual Assistant Services
- Search Engine Optimization (SEO)
- Social Media Marketing
- Business Process Outsourcing (BPO)
- Mobile App Design
- Customer Call Centres
I’m trying to figure out how big Integra Global Solutions but they’ve got 300employees, offices worldwide, big Vice Presidents (working with Nokia, Panasonic, Major banks), Mark Fisher as Director of Integra Global Solutions Australia, also used as a testimonial example by Microsoft. Im guessing they are a fairly large corporation.
I think I’ve kind of figured out what’s going on here. So here’s my best attempt of explaining:
Basically we have the big mother company Integra Global Solutions with their services listed above at what they do – they also have an office in Philippines which is Mark’s offshoring office for Intiger. Intiger also has offices in India under Integra and soon to open in Vietnam (which is shown here http://www.intigerassetmanagement.com/team-view/sharon-wright/) along with what I presume Hong Kong as well sometime in the future will be another office as mentioned above.
If you go on the site Integra Global Solutions the most recent service added is “business process outsourcing(BPO)” (http://www.globalintegra.com/business-process-outsourcing-services.html) If you read into it this BPO service from Integra Global it provides
- Financial Planning
- Financial Analysis
- Call Centre Support
- Remote technical Support
- (this one caught my eye – I quote) cost savings of 50%, usually more.
That last point sounds astonishingly familiar to 40% reduction on the Intiger website. Interesting.
Anyways Mark Fisher is also listed as M.D. of Integra Global Solutions Australia. So my conclusion is this; Integra Global Solutions is branching off into a new Business Process Outsourcing division in Australia which includes Fintech known as Integra Asset Management (which we have acquired 100% of). Integra Asset Management (IAM) falls under as a subsidiary of Intiger. So basically Intiger will be the new division or service provided by our mother company Integra Global Solutions.
Notice all the Integra Asset Management Websites now redirect to Intiger: integraassetmanagement.net/ www.integraassetmanagement.com.au/
This leaves one last piece of the puzzle. What is this website http://www.propertymanagementbackoffice.com/index.php and why does it share the same logo as Integra Global Solutions and Integra Asset Management?
Well for those that saw the old Integra Asset Management website: http://integraassetmanagement.net/ (if it redirects straight to Intiger just look at the screenshot above) it includes “Integra Property Management” which relinks to Intiger. Sharon Wright (currently on the Intiger Team) is also head of Integra Property Mangement” so this is also all part of the newly formed Intiger and previously part of Integra Asset Management.
Putting all the pieces together this is the best I could do:
Also my brainstorming sheet for those interested as to how this is all linked and cant be bothered reading words:
Summary Pro’s and Con’s:
Buy, Sell, Hold upto you. God knows what we’ve acquired, its seems scary big or part of something scary big. MW has really done something this time, you don’t really expect a shell to acquire a new facet of a large business running over 10years. Comes back to the old saying “if its too good to be true, it usually is too good to be true”. Whats the catch I’m wondering if there is any?
As 3500 pointed out, you don’t get such good terms unless there’s something wrong with the company and MW wants to derisk it. At the same time bad terms would suggest directors don’t care in the shareholders best interests.
Personally I would rather have MW terms that your regular shells, very interesting to see how this story unfolds and how big Integra Global is really and what Intiger’s plan of attack is, all we do know is they have an established mother company and they can work of the clients there or get new ones in Australia.
Im yet to look into the technical side of things with the Fintech Programmes Intiger provides and will get around to it this week.
With the very little information given this is the best I could dig up, there may be more to it or may be less to it. We will find out over the coming month.
Enjoy the week ahead.
SRT Price at posting:
2.2¢ Sentiment: Buy Disclosure: Held
(20min delay)