The sky’s blue, but the green stuff runs red in billion-dollar Blockchain land
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The two dozen ASX stocks offering exposure to much-hyped Blockchain technology are together worth more than $1 billion.
$1.036 billion to be exact — based on Thursday’s closing prices (see table below).
Their collective sales receipts for the December quarter were $41.7 million.
That may not seem too bad, given the nascent, blue sky nature of blockchain — an encrypted, public ledger that underpins cryptocurrencies such as bitcoin and promises other applications such as securing public records and regulating online voting.
But that includes $27.4 million from Tianmei Beverage Group — which made all its money selling bottled water and groceries in China; and $8.7 million from Novatti Group — earned from its non-blockchain, non-crypto payment processing business.
Tianmei makes the list because it last week announced plans for a blockchain platform allowing customers to track its bottled drinking water to the source. Novatti plans to add blockchain to its payment platforms in the future.
Without the Tianmei and Novatti contributions, total December quarter receipts for the billion-dollar blockchainers came in at just $5.6 million.
When we add in costs, total net cash from operating activities comes out at a loss of $8.4 million (or a loss of $15.6 million if we knock out Tianmei and Novatti).
|ASX Code||Company||Q2 Cash Receipts||Market Cap||Q2 Operating cashflow||Cash in the bank||Expected Q3 Spend|
|FGF||First Growth Funds||$0||$27.2m||-$21,000||$994,000||$130,000|
|BOG||Byte Power Group||$31,000||$27.6m||-$232,000||$176,000||$209,000|
|TSN||Transaction Solutions International||$526,000||$25.5m||-$200,000||$2.6m||$2.7m|
|FGF||Fatfish Internet Group||$695,000||$34m||-$1.2m||$3.4m||$500,000|
|TB8||Tianmei Beverage Group||$27.4m||$21.6m||$7.1m||$49.3m||$21.1m|
Only three of the 24 blockchain and cryptocurrency-related stocks Stockhead monitors — Tianmei, Novatti and DigitalX — managed to secure positive operating cash flow in the December quarter.
Digital currency expert DigitalX (ASX:DCC) is the only one of the three active in the sector.
(DigitalX was also paid $US3.6 million in digital tokens in the quarter for consulting — though these are not included as cash receipts. Stockhead has contacted DigitalX to find out how the company categorises tokens — possibly as intangible assets.
DigitalX didn’t need to cash in its tokens anyway, as its fiat money receipts surged from $39,000 in the September quarter to $1.4 million by the end of December.
Six companies made no money, although only Linius (ASX:LNU), Ookami (ASX:OOK) and First Growth Funds (ASX:FGF) claim to be working in the crypto space.
Linius — which wants to use blockchain to fight TV and movie piracy — is worth $103.6 million, yet made no money.
Yojee, a company that wants to shake up the logistics industry using blockchain software, and Change Financial really stood out.
The former is valued at $200 million and the latter at $100m, but both banked a similar amount to the smaller blockchain aspirants.
Peppermint Innovations (ASX:PIL) and Transactions Solutions International (ASX:TSN) do not claim to work with crypto.
Many of the others seem to have plans to spend most or all of their existing funds this quarter, suggesting another a capital raising may be around the corner.
Indeed, some have already tapped investors’ financial veins.
First Growth Funds, Linius, Serpentine, Sportshero, Novatti, Reffind, iCandy, Chapmans, Kyckr, Fatfish Internet and Animoca have already asked investors to keep sending cash their way.
A notable inclusion is Genetic Technologies, which only joined the ranks of blockchain businesses on Wednesday after shareholders voted to boot the board.
While it was burning a cool million a quarter on breast cancer diagnostics, investors will be hoping the incoming DigitalX board members will spend it on more productive assets.