IPP - iProperty Group

[ormond]

Just wondering if anyone has had a look at IPP.
Have poached several REA executives recently and certainly looks to have a lot of upside.

Listed on the Australian Securities Exchange, IPGA Limited (ASX:IPP) owns Asia’s No. 1 network of property websites under the iProperty.com umbrella brand. The Company is focused on developing and operating Internet-based real estate portals with other complementary offerings in Asian markets. It currently operates consumer and business online property portals in the markets of Singapore, Malaysia, Hong Kong, India and Philippines. With further expansion planned, IPGA is continuously working to capitalise on its market-leading positions and the rapidly growing online property advertising market throughout the region.

 

[robusta]

Picked up some today, probably bought way too early again sp down straight after I bought, anyway...

This business while not making any money at the moment is following in the footsteps of REA, with leading portals in Indonesia, Malaysia, Singapore and Hong Kong. They have recently had a breakthrough in the HK market and are a clear leader in Indonesia while Malaysia is actually making money. The are still trying to build a clear lead and network effect so there are risks but if successful the competitive advantage and pricing power in these markets should be satisfactory.

 

[skc]

Picked up some today, probably bought way too early again sp down straight after I bought, anyway...

This business while not making any money at the moment is following in the footsteps of REA, with leading portals in Indonesia, Malaysia, Singapore and Hong Kong. They have recently had a breakthrough in the HK market and are a clear leader in Indonesia while Malaysia is actually making money. The are still trying to build a clear lead and network effect so there are risks but if successful the competitive advantage and pricing power in these markets should be satisfactory.

Have you looked at OTH? Same space and very useful product.

I like IPP's spread in Asia, but I don't know enough about those property markets to know how profitable they'd be over there.

 

[robusta]

Have you looked at OTH? Same space and very useful product.

I like IPP's spread in Asia, but I don't know enough about those property markets to know how profitable they'd be over there.

Cheers just had a glance at the numbers on Comsec, will add it to the watch list and dig deeper thanks.

 

[Ves]

Careful with this one. I had a look recently and lots of factors that put me off, but the major ones are:

I'm unable to understand the cultural influence, politics and economics in the Asian countries that they operate in

Management is suspect - the major shareholders seem to be playing political games at the moment - take a look at the sudden resignation of the chairman (lots of rumours surround this)

It's hard to predict with any certainty firstly when they will make a profit, and if so, how much? (ie. impossible to value)

 

[McLovin]

Have you looked at OTH?

This is an interesting company, not so much because it's going to shoot the lights out but for what it might do to REA. Listings are free and everything is made back with banner advertising. I reckon all these free sites are at the very least going to eat away at the big, big margins the internet incumbents have. It's probably one of the advantages of the internet, a site like Gumtree can run on a shoestring but actually reaches a large audience and is 100% free.

 

[skc]

This is an interesting company, not so much because it's going to shoot the lights out but for what it might do to REA. Listings are free and everything is made back with banner advertising. I reckon all these free sites are at the very least going to eat away at the big, big margins the internet incumbents have. It's probably one of the advantages of the internet, a site like Gumtree can run on a shoestring but actually reaches a large audience and is 100% free.

I must say I use OTH as much as REA these day. REA still has a much better website, but I go for OTH for its historical prices.

The only reason I have not invested OTH (although I should have traded it) is that I don't know what's stopping REA from putting historical prices up on its site. That is OTH's only advantage and doesn't appear to be a sustainable one.

 

[ROE]

Just wondering if anyone has had a look at IPP.
Have poached several REA executives recently and certainly looks to have a lot of upside.

Listed on the Australian Securities Exchange, IPGA Limited (ASX:IPP) owns Asia’s No. 1 network of property websites under the iProperty.com umbrella brand. The Company is focused on developing and operating Internet-based real estate portals with other complementary offerings in Asian markets. It currently operates consumer and business online property portals in the markets of Singapore, Malaysia, Hong Kong, India and Philippines. With further expansion planned, IPGA is continuously working to capitalise on its market-leading positions and the rapidly growing online property advertising market throughout the region.

show me an online business that do well in Asia that owned by foreigner?
even the juggernaut Google has a hard time in China and doesn't earn much

sometimes a good business and idea need the right business environment to prosper...
otherwise it's a pipe dream most of the time ...

Asia is a very different operating environment .... not easy to be successful....

 

[McLovin]

I must say I use OTH as much as REA these day. REA still has a much better website, but I go for OTH for its historical prices.

The only reason I have not invested OTH (although I should have traded it) is that I don't know what's stopping REA from putting historical prices up on its site. That is OTH's only advantage and doesn't appear to be a sustainable one.

I think RE agents like having the ability to control which prices are put up and which aren't. Those marketing flyers from agents never have the sold prices on them although they always have a recently sold property.

OTH does a trade off, free ads but they give potential buyers more information. So I guess they're dragging agents in by lowering costs and buyers in buy offering more data. Eventually re.com.au will respond, IMO.

 

[robusta]

Careful with this one. I had a look recently and lots of factors that put me off, but the major ones are:

I'm unable to understand the cultural influence, politics and economics in the Asian countries that they operate in)

To tell you the truth neither do I, but I understand property investment is a high priority and can see the revenue growth of IPP.

Just a example the rental yield in Hong Kong went up 10% last year.

Management is suspect - the major shareholders seem to be playing political games at the moment - take a look at the sudden resignation of the chairman (lots of rumours surround this)

Have not heard any of this but the ex chairman controlled the third largest shareholding and the ex vice chairman (now Chairman) controls the largest stake (along with another board member via a holding company). I will watch with interest.

It's hard to predict with any certainty firstly when they will make a profit, and if so, how much? (ie. impossible to value)

True but the same could be said of REA, CRZ, WEB, et al a while ago. I agree it is certainly a risky investment.

 

[robusta]

show me an online business that do well in Asia that owned by foreigner?
even the juggernaut Google has a hard time in China and doesn't earn much

sometimes a good business and idea need the right business environment to prosper...
otherwise it's a pipe dream most of the time ...

Asia is a very different operating environment .... not easy to be successful....

I take your point ROE but while they are listed on the ASX, the businesses are run from Asia. They are a clear number 1 in Malaysia, it will be very interesting to see how Indonesia goes seeing they have recently bought the number 1 and number 3 portals.

 

[Ves]

True but the same could be said of REA, CRZ, WEB, et al a while ago. I agree it is certainly a risky investment.

I could be wrong, it's not so much that it is identifiably risky - it is more that your decision is based more on HOPE than anything else (from what I can tell - I admit you may know more than you are letting on). The hope lies in the fact that you have seen other businesses in online capacities take off and earn massive amounts of money without much capital. It doesn't always work like that - take a look at all of the businesses that did not make money. For the three that you named, there are many, many, many more that went no where fast - especially in Asia.

This is too speculative for me - I find it best not to swing at the next big thing, but I'm pretty boring!

 

[robusta]

I could be wrong, it's not so much that it is identifiably risky - it is more that your decision is based more on HOPE than anything else (from what I can tell - I admit you may know more than you are letting on).

Never make the mistake of thinking I know more than I am letting on, my recent investment in MCE should be testimony to that.

The hope lies in the fact that you have seen other businesses in online capacities take off and earn massive a mounts of money without much capital. It doesn't always work like that - take a look at all of the businesses that did not make money. For the three that you named, there are many, many, many more that went no where fast - especially in Asia.

The other business I looked at with the same founder is recently listed ICQ, but I am happier taking the risk in IPP considering the revenue growth and established market leadership. (in some markets)

The Hong Kong portal is not the market leader but the leading Chinese language portal.

This is too speculative for me - I find it best not to swing at the next big thing, but I'm pretty boring!

That is what I like about you Ves, maybe we should team up if there were not too many arguments, the middle ground could be the best.

 

[Ves]

OTH does a trade off, free ads but they give potential buyers more information. So I guess they're dragging agents in by lowering costs and buyers in buy offering more data. Eventually re.com.au will respond, IMO.

OTH was pretty cheap in the 30 cent mark. I couldn't quite get my head around the industry dynamics and barriers to entry however.

Remember, OTH also provides software to real estate agents which is separate from its listings business. That provides realiable cash flow to pump into the development of their web software and portal (and marketing). It remains to be seen what they can make out of this. REA & OTH are different businesses, that overlap in some areas IMO.

 

[Ves]

The other business I looked at with the same founder is recently listed ICQ, but I am happier taking the risk in IPP considering the revenue growth and established market leadership. (in some markets)

Market leadership isn't always the whole story: industry profitability (on a regional scale) and barriers to entry have a lot to say about the true meaning of this. As Buffett often said: The best company in a poor industry still makes a bad investment.

It's hard to get enough information on the Asian real estate industry in the companies that they operate in to get much bearings on these two factors IMO.

edit: This company also has a market cap of $166 million and does not make a single cent of profit at the moment. Another thought to ponder!

That is what I like about you Ves, maybe we should team up if there were not too many arguments, the middle ground could be the best.

I am probably better at telling you what I would not invest in than what I would! One list is massive, the other is pretty short! There are two categories to the 'invest in' list: "Inevitables" and "Highly probables." I read way too much Buffett.

Good luck though - you are putting a lot more effort into your stock selection than most people. You will learn a lot by having a go - that's for sure!

 

[ROE]

I take your point ROE but while they are listed on the ASX, the businesses are run from Asia. They are a clear number 1 in Malaysia, it will be very interesting to see how Indonesia goes seeing they have recently bought the number 1 and number 3 portals.

I agree but this mean little as number #1 in those countries if there isn't much money to be made in that industry..

Asian buy and Sell Real Estate differently most through people who know people who want to buy and sell properties, they dont go to agents or spent big on advertising...

plus the success rate for cracking those market is very very small and they do things differently
you need local knowledge, you need local contacts, you need to talk to the right people, you need to know this person who will introduce you to another person and so on and so for...

if it can crack that market I am happy for you but my rule of thumb spruiking China and India I'm not interested..
only interest in show me the money....free cash flow...margin....return on Capital etc...

 

[Adrian.]

I've had IPP on my watchlist for a while now but have not taken the plunge yet - mainly to do with global economic conditions rather than the company itself. I agree that this is a speculative stock. It's not one for purely value investors.

One point I would make is that this is not just a China/India centric company in my opinion. It does have businesses in Hong Kong, Macau and India but also has businesses in Indonesia, Malaysia, Singapore and Philippines. It also has a regional business focused on commercial and industrial real estate.

Most of the businesses have growing revenue and website popularity. While the management politics is a bit of a worry they seem to have a clear plan and solid understanding of the markets they operate in. They have a strong focus on mobile access and seem to be capable of signing up real estate agents to use their sites.

This company is a punt but they seem to be the leader at the moment so if anyone is to succeed hopefully it's IPP.

PS, I pretty much invest based on gut instinct so don't follow me.


Here is a recent presentation by the CEO if you're interested.

http://www.brrmedia.com/event/105798/shaun-di-gregorio-ceo

 

[robusta]

Market leadership isn't always the whole story: industry profitability (on a regional scale) and barriers to entry have a lot to say about the true meaning of this. As Buffett often said: The best company in a poor industry still makes a bad investment.

It's hard to get enough information on the Asian real estate industry in the companies that they operate in to get much bearings on these two factors IMO.

edit: This company also has a market cap of $166 million and does not make a single cent of profit at the moment. Another thought to ponder!


I am probably better at telling you what I would not invest in than what I would! One list is massive, the other is pretty short! There are two categories to the 'invest in' list: "Inevitables" and "Highly probables." I read way too much Buffett.

Good luck though - you are putting a lot more effort into your stock selection than most people. You will learn a lot by having a go - that's for sure!

Is it possible to read too much Buffett??? I don't think so.

Time will tell with IPP, there is a lot of money in Asian real estate advertising, and I think IPP has a shot at gaining a competitive advantage if it has not got one yet. The first mover's in this industry have a history of success.

 

[robusta]

Simon Baker had a apparent falling out with Patrick Grove and resigned as chairman of IPP as well as ceasing to be a substantial shareholder last year.

IPP have been reported in the media to have formed a partnership with a company called Real Estate Investar. No announcement to the ASX has been made to date.

http://www.bernama.com.my/bernama/v7/bu/newsbusiness.php?id=938514

Anyway the chairman and cornerstone investor in REI is Simon Baker.

http://www.realestateinvestar.com.a...&sfid=BB4B89144C3C412DB24B82DC9B85998D&tier=1

Back to Patrick Grove, he has been featured in BRW magazine as a 'Young rich star'

http://www.brw.com.au/p/investing/young_rich_star_patrick_grove_plans_F1pyDZtF3rT7VUPjO66s8H

It remains to be seen if he can continue to make his shareholders rich.

Some more wisdom from Patrick in Business Today telling us how to succeed in Asia.

http://www.businessday.com.au/small...asian-century-opportunity-20130402-2h3r8.html

 

[robusta]

Tading conditions have been tough in Malaysia, Singapore and Hong Kong but the growth continues...

http://www.asx.com.au/asxpdf/20130711/pdf/42gztgm0ddfjmg.pdf