GreenPro Capital Corp paves way for potential public listing of Ata Plus in US capital market
By Kiran Kaur Sidhu August 12, 2020
- US stock exchanges recognise future value rather than past track record
- Path for Ata Plus to US capital market lies via M&A and expansion to new markets
[Ed: At the request of GreenPro, some edits have been made to the article to ensure GreenPro's compliance to Nasdaq rules.]
The reality for equity crowdfunding (ECF) platforms in Malaysia is that opportunities to monetise their business through a public listing or a trade buy in the still maturing market will prove tough to pull off. So, if Malaysia is too tough a hurdle for the operators, then why not just aim for the most prestigious international capital markets out there – like Nasdaq or New York Stock Exchange (NYSE),
Wait a minute, you may be thinking. Did someone catch the virus and lose their sense of lucidity? Or, maybe, someone’s just thinking far out of the box?
For Elain Lockman and Ata Plus, the recent, all stock, 15% acquisition of Ata Plus by NASDAQ-listed GreenPro Capital Corp, at a valuation of a few million US dollars, was not so much a case of out-of-the-box thinking than it was a reset of her own drive and determination to go all out to achieve her ambitions of a listing.
“Previously, we knew that our end goal is a public listing – we always said within two years. But meeting GreenPro, what they did was really articulate to us clearly on how we can go towards that and how fast and why in the US.”
It’s all about valuation, says CK Lee, Group CEO of GreenPro as he grandly explains GreenPro’s “value model” based on its incubation model as opposed to the traditional revenue model and played out against the backdrop of the only stock market in the world that he points out, “recognises future value”, where past performance is not an indicator of future performance and where the law of the jungle prevails.
Having themselves listed on the OTC market in 2013 starting from a “zero base” and eventually uplifting themselves to Nasdaq in 2018 while seeing their stock price rise to US$10 (RM42) per share, only to drop last year to less than US$1 (RM4.2), CK believes GreenPro has learnt enough lessons to now guide Ata Plus and the 40 other companies it has made investments in over the past six years.
And in a Covid world where the next normal is still taking shape with business rules being reset, it is no time to act cautious or play defensive if one wants to achieve a listing in two years.
Speed matters, ever more so in a Covid world. “One of the things that the pandemic has made us realise is the need to accelerate our growth very fast because essentially we’re a digital infrastructure company that facilitates companies to raise money effectively,” says cofounder of Ata Plus, Kyri Andreou, stressing on the platform’s role in supporting entrepreneurship and job creation, not just in Malaysia but eventually in other markets in Southeast Asia, Asia and beyond. “We need that kind of infrastructure in place that allow for global investments,” he says referring to the visibility they can achieve with investors through a US listing.
To illustrate how the acquisition is strategic for both parties, CK opened up to Digital News Asia about plans to strengthen the position of Ata Plus.
CK describes GreenPro as “an emerging growth company” that assists and supports businesses to capitalise their value on a global scale with a portfolio comprising of finance, technology, banking, CryptoSx for STOs, health and wellness, and even fine art that it invests in via its business incubator.
GreenPro’s incubation model
The company’s main source of revenue is derived from its corporate advisory role with US$ 4.2 million in 2018 and US$ 4.5 million in 2019. However, Lee emphasises that the true “sexiness” of GreenPro’s value lies beyond its financials. “Our success factor is not based on our revenue, but it is our incubation model.”
Lee explains that within the incubation model is a stable of assets comprising of listed companies that GreenPro holds shares in, many of which plan to up-list to a main stock exchange on the NYSE, NASDAQ or HKEX. One example is the 17.5 million shares or about 5% stake it holds in health and wellness company, Agape ATP Corp. listed on the United States over-the-counter (OTC) market (AATP: OTC US).
He sheds light on how GreenPro can help accelerate the growth of Ata Plus. For asset-light companies like Ata-Plus which own intellectual property, valuation of the company is a challenge especially when trying to use traditional accounting methods. “We try to discover the value drivers of a company, both tangible and intangible. Then we monetise, capitalise and then securitise it.”
GreenPro uses it’s a "Value-Capital Trilogy" framework to value the companies it invests in based on the behaviour and value perception. “In the whole world, it is only the US market that recognises future value. Traditional capital markets follow the traditional way of referring to track record and profits,” said Lee, adding that the OTC market listing does not require company revenue. He admits that GreenPro employs a concept that people take time to absorb. Which is why it is launching its entreprenuership programme to educate entreprenuers in the "New Finance" ecosystem concept.
[Para updated with additional information.]
For companies looking to list on the US stock exchange, he encourages them to first list on the OTC market before entering a main stock exchange. Stocks that are traded via OTC are typically smaller companies that cannot meet exchange listing requirements of formal exchanges (Source: https://www.investopedia.com/terms/o/otc.asp) “You need some time to adapt,” he advises, “Not everyone can adapt to the governance requirements quickly.”
Propelling Ata Plus to the US capital market
GreenPro’s strategy for Ata Plus involves possible mergers or acquisitions, rather than relying on organic growth. The strategy aligns with Ata Plus’ growth strategy to extend its offerings through local partners in regulated jurisdictions in Asia, Middle East and Africa.
“Specific to Southeast Asia, the same strategy applies and it’s not limited to Indonesia, so long as there is an established regulatory framework to govern ECF in the particular jurisdiction,” says Elain. She shares that Ata Plus will start identifying and engaging with potential partners within a 12-month timeframe. “Of course this is a continuous process. So it will go beyond the 12 months.”
Ultimately, Lee plans to duplicate for Ata Plus the model GreenPro employed for its listing in the US. But, “Ata Plus’s version will be stronger than GreenPro because we started from zero without licensing and a pre-IPO round.”
For Elain, the road map to her desired US listing is clear. She and cofounders Kyri and Aimi Aizal have to work harder than they ever have, be quick to identify opportunities and decisive in executing.
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