Digging into 8VIC Holdings Limited (ASX:8VI) (Also known as Ace Profits academy, Value Investing College, Value Investing Options Mastery, Contra Trading Course, Buffet Strategy)
I am supposed to be studying the companies I identified to invest in when the market opens on Monday. But, I got distracted.
Have you ever seen advertisements, on Facebook, Instagram etc.? It gets annoying, or even funny when people around you start saying,"Hi, my name is Imran!" or "Hi, Dominic here!"
Others are "Super Mum Investor", "I-Quadrant's Can you buy a property with little or no money?", "Real estate rebel Marko and friends". I bet you have seen at least one advertisements of the above brand names. And, this is the power of social media marketing.
However, the thing that caught my attention is... Value Investing College, and I see a tagging below "8VIC Holdings Ltd". I googled it and to my surprise, it is a CDI (similar to American depositary receipts) listed on Australia stock exchange under the symbol ASX:8VI.
I found this extract below from the website I got to from a link found from the comments section.
Can you spot 8VIC Global?
Curiosity is piqued
Got further intrigued when I chanced upon - https://sincereinvesting.wordpress.com/ when I google "8VIC IPO". Let's not go there for now.
I also got to know it has a Parent 8I Holdings Limited.
Ownership drilling - Who is behind 8VIC?
If you are curious, this is the corporate structure (from 8I holdings latest annual report):
8VIC Holdings Limited is listed, and is the holding company of Value Investing College.
8VIC Holdings Limited is 79.85% owned by 8I Holdings Limited.
8I Holdings Limited is 29.96% owned by Ken Chee, and 18.01% owned by Clive Tan.
However, intent is just to find out how much a course provider make.
(Because it has been appearing non-stop on our Facebook feeds and it is starting to get on my nerves)
To do so, let us walk through the history of the entity from 2015 to 2019!
Starting from 2015 to 2016
We have to dig back to history where it used to called Digimatic Group Ltd (DMC). It IPOed on Australia Stock Exchange under symbol ASX:DMC.
Per prospectus filed with ASX on 17 Nov 2015, it raised $80m from 16m shares at $0.20 shares. It was oversubscribed at that time.
Basically, Digimatic Group is made up of 3 different companies. Per extract below from the prospectus, the 3 companies are the following:
1. Wewe Media Group Pte Ltd - Lead generation and client acquisition services
2. Digimatic Media Private Ltd (previously known as CPA academy Pte Ltd) - Provision of 'cost-per-action marketing seminars and workshops
3. ShangCommerce Pte Ltd - Tech business on assisting SME move their businesses online
Notional P&L of all 3 companies consolidated together shown below:
Media Release showing that Digimatic IPO was oversubscribed by 62.5%:
Throughout 2015 to 2016, 8Vic holdings limited (ASX:8VI) was still known as Digimatic Group (DMC). It was a company that focuses on E-commerce and digital media. I have tried searching for its e-commerce marketplace - www.shangcommerce.com, but I was unable to reach the website. I reached only a Qoo10 account known as ShangCommerce.
The management buyout in 2017
There was a management buyout for 2 of its subsidiaries - Digimatic Solutions Pte Ltd and Digimatic Australia Pty Ltd to Mr Lim Hui Jie.
This is the corporate structure of DMC after the Buyout:
New Focuses after Buyout:
Some future plans they had in 2017:
Yes, there is Ace Profits Academy:
Their new nature of business redefined:
The reverse merger in 2018
This is the most exciting year! This is the year 8VIC Global Pte Ltd, the holding company for the various courses internationally, being pumped into 8VI via a reverse merger.
On 2 Oct 2018, the businesses related to digital marketing were all sold off to Mr Ivan Ong.
And, here is the new nature of business of newly formed 8VIC Holdings Ltd. It changed trading symbol from DMC to 8VI on ASX.
Before the corporate restructure:
After the reverse merger:
Some reasons they gave for the reverse merger (if you wish to find out more, go ahead to sincereinvesting.wordpress.com for more):
Here we are, here is the yearly revenue and profit charts taken from an investor presentation on 8VIC. What do you think about it? Playing around with numbers, 12m revenue was made in FY 2018.
12m in revenue requires 3000 students to sign up and each pay a hypothetical $4,000 for a course.
2019 - The year 8VI issues the first interim report on ASX
After all the corporate actions, this is the year that we can use the financial reports to analyse how well is the investment school doing? The coveted Value Investing College with big names printed all over Suntec Convention Centre for a period.
Corporate positioning of 8VIC Holdings:
The relentless advertisements all over Facebook every few feeds you see. The names that almost every Singaporean that has googled stuffs related to investment will know because the advertisements appear as Google Ads too. Powerful marketing, really and honestly.
Let's take a look at the growth of enrolment. One word. "Wow!"
Won't you buy this stock ASX:8VI? Growth is good!
Starting below 2000 enrolments in 2012, it has grown to 15,560 cumulative in 2019 Mar (because their financial year ends 31 March). In 7 years, enrolment increased by 13,560, and this is about 2,000 yearly enrolment.
Not forgetting they have recurring revenue from sign ups for their stock analytic softwares, which I think is known as WealthPark. This is legit a reasonable business. to invest in.
The picture below may be too small. however, it shows the stock price performance of 8VI since its IPO.
Let's be fair and look at the price performance after the reverse merger which occurred in Oct 2018:
The stock price fell from 0.60 to current 0.15 AUD.
Let's take a look at the annual revenue and Profit figures from audited annual reports:
Figures are in AUD Millions.
Do you recall the reverse merger that occurred in Oct 2018? Ace Profits Academy which is under Digimatic Media Pte Ltd, was also sold off to Mr Ivan Ong.
So, here is the Revenues (likely to be pre-reverse merger):
You can still observe growth in revenue, though in 2019, it was a 4.7m loss due to expansion costs.
Let's take a look at the Interim report 2019, 6 months ended 30 Sep 2019. This is the period where 8VIC Global Pte Ltd should only be consisted of Value Investing College and the stocks analytic software - WealthPark:
Provided that the business maintain the pace, it should record a revenue of $9m, and about $200,000 of profits.
This is on top of the director salaries shown in the annual report:
So, to conclude... it is extremely profitable to start a business giving investment course. The reason why we keep seeing the ads, is probably due to the links the business has with digital marketing businesses. Well, 8VIC used to be Digimatic, a digital marketing company. They are probably experts in terms of social media engineering, so anyone that has googled investment stuffs will see the ads.
Well, once again, if making $9m per year appears sweet to you, are you going to start an investment course?
Will I go for the course?
It doesn't make sense to burn about 10% of Llama funds to go for it. I intend to buy Suntec REIT with the money. Basically, I am cash-strapped already.
Will I use WealthPark?
I use Investing.com. It has a good stock screener. It identified stocks with low RSI, and good fundamentals. Good enough for Tumble Mumble play. I mean, afterall, good companies also require a good price for you to invest in as explained by Investment Moats.
So, I would stay with Investing.com as they provide timely data updates and have a efficient screening system. Let us know if you know of any better data providers or screeners!
Will I invest in 8VI as s company?
Will you? Business seems fine. Fundamentals seem okay. But the stock price keeps falling... $0.60 AUD to $0.15 in about a year's time.
Anyways, I do not have spare cash to invest too.