What does it take for a business to be worth $100m AUD? There...

What does it take for a business to be worth $100m AUD? There are many answers to this question. It is a question of importance, because a $100m market cap equates to a share price of 28 cents.

From my discussions with management, it is clear that this is a short term target of 1ST Group. Moreover, I and many others, think it is a likely outcome in the near future....

HealthEngine has in the past had a valuation north of $100m and given that 1ST is now the market leader, is it quite likely that 1ST will soon reach this level.

I believe there are two strategies that 1ST will use to reach this threshold:

A lot has already been spoken about organic growth, by accelerating growth in the number of sites driven by new partnerships and shifting old sites to the new pricing structure. This alone will drive significant growth.

However, not much has been spoken about in-organic growth... As the valuation of 1ST continues to grow, it increasingly opens up the opportunity to acquire a competitor. Growth by acquisition was previously not a viable strategy, but this method of accelerating growth will soon become viable...

The industry itself is consolidating. In 2015, there were 10-15 providers of online booking software. However, fast forward 4 years and there are now now only 3-4 major players, with 1ST leading the pack. Growth by acquisition would be a viable approach once we exceed 15 cents ($50m market cap) and I think it is increasingly becoming a likely option.

In the online world, the #1 player in an industry is normally rewarded with exponential returns. It is important to have a high level of market share. As we continue to grow, I think we increasingly move towards opportunities to consolidate a dominant position...

Q4-FY19 results are on the horizon, but I am even more interested in the Q1-FY20 and Q2-FY20 quarters...

Excited by the journey we are on and looking forward to continuing to watch this story unfold in front of our eyes.