It’s complicated: ‘Omni-channel adaptive’ tech company AltoStratos launches $25 million IPO
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AltoStratos will look to be the next company to join the ever-growing list of small cap tech stocks on the ASX, having launched an initial public offering to raise up to $25 million.
If you aren’t deeply knowledgeable about communications technology, it might be a bit of a head-scratcher trying to figure out it does, though.
AltoStratos describes itself as an “omni-channel adaptive routes-to-market solutions partner” for global IT and consumer electronics brands.
It says it assists global IT brands in overcoming routes-to-market (RTM) challenges in the Asia Pacific by “serving as the key link in the supply chain”.
Here’s a nine-minute explainer of what that means:
But it’s actually been going on for some 30 years with the likes of subsidiaries such as Digiland and Infonet helping big-name IT brands such as Apple, Cisco, Dell, IBM, Microsoft, Sony and Panasonic address the Asia Pacific market.
AltoStratos is selling 62.5 million shares at 40c a pop, hoping to raise up to $25 million if fully oversubscribed.
It is eyeing a market cap of $84.9m, hopes to list by March 5, and wants to use the code ATO.
It says the majority of those funds will be used to build an “Australian Fulfilment Centre”. It is never quite clearly explained what that is, but it appears to be a base for its operations — it wants to expand into Australia — and a holding centre for products. Amazon pretty much owns the global standard for “fulfilment centres” with its massive holding warehouses; two of the most recent being built in Melbourne and Sydney.
AltoStratos currently operates in Thailand, Malaysia, Singapore and Australia. It made a $3.3 million loss in FY18, and its revenue and gross profit have declined 56 per cent and 28 per cent respectively since FY16. Revenue was $12.2m in FY18.
Chief Lee Yuen Wai receives more than $500,000 a year. He and his fellow founders will hold 62pc of the company if it raises the maximum amount.
Unlike many IPOs, the company has not appointed a lead manager. Stockhead was told a “very successful Asian roadshow” and expectations of “considerable offshore investment” has meant it didn’t need one.