Ann: Appendix 4D and Half Year Report-TCH.AX, page-12

The bigger question is what is the risk/ reward situation here.

This is a very difficult company to value in the short term as it is very hard to segment the revenues and there are so many moving parts. The development/ integration revenues will presumably be responsible for a smaller % of growth in the future as the platform grows and transactional value increases. In many ways successfully helping other businesses develop that are reliant on the platform strengthens the ecosystem as a whole and that will scale quite well and investing here for growth is making a bet on the successful implementation and execution of a number of different co-existing strategies.

There is a very unlikely chance of a capital raising give that there is a net cash position of 10m currently and presumably access to debt if required. If you discount afterpays valuation substantially (say 75%), and value change up scrip at zero that still gives approx 40m worth of liquid assets (34cps). A half year earnings of 5cps when annualized (ignoring profit on sale of AFY) if you assume zero growth and a PE multiple of 15 gives a base price of 1.84 which is close to the current trading price (if you use PE of 10 that gives 1.34 which is still only 30% lower than current price).

The upside is: growth (likely, at least in the longer term), success or even maintenance of AFYs market valuation (who knows?), and then also market re-evaluation (higher PE multiple). In my opinion, this offers a compelling relative valuation using undemanding assumptions (relative to the rest of the market).