Business advisory JYG launches $3.4m offer to tap foreign investment
The Chinese culture does not trust easily – groceries need QR codes, luxury brands need certification and more than anything business relationships need assurance.
With an increasing level of Chinese investment in Australia, it is those subtleties that get lost in translation — but professional services firm and ASX-aspirant JYG Australia is hoping it has the missing puzzle piece.
JYG hopes to capture “a substantial share of the market for professional services generated by Asian inbound capital transactions”.
That includes advising on deals and transactions, plus ongoing compliance and advice for “wealthy individuals and families and investors in small-to-medium enterprises”.
JYG is attempting to raise $3.4 million in an initial public offering for acquisitions and working capital
“If you look at 2016, data shows $300 billion in foreign investment from Hong Kong, Singapore, China and Malaysia — that will only grow because of the sheer size of their combined populations,” chief executive Francis Gu told Stockhead.
“Their own economies aren’t doing as well so investors are looking outside of their own countries… our competitors don’t fully recognise the potential because their model is to service their Australian clients, ours is solely on ethnic Chinese people and our business model is reflective of that.”
While recent rhetoric has been focused on overseas investment pricing Australians out of the housing market, Mr Gu says foreign investment trends are moving towards commercial property and agribusiness to avoid heavy regulation.
JYG is offering 17 million shares at 20c each. On listing, the company would be worth $17 million.
Money from the raise will be used to expand their operations and assist in plans to launch an asset management business down the line – focused on raising capital for the company’s planned investment funds.
China is known as a high-context culture, where communication is more implicit and relies heavily on context.
“Contracts are the last piece of the puzzle,” Mr Gu said.
“The deal is not sealed when the contract is signed but rather over dinner conversation when the trust is developed. They rely much more on leveraging relationships and favours rather than explicit communication.”
The company’s largest shareholder is China-based Jingyi Group and together the relationship provides access to an ultra-high net wealth investor base.
“Our trust is relationship based, because our major investor have invested in us in Australia as well, there is an instant rapport when they introduce Australian opportunities. We thgink that by having our major shareholder in the Chinese market we can capture significant value.”