YPB Group (YPB) is in the early stages of commercialising its patented, non-destructible, anti-counterfeiting technology used for brand protection and product authentication. YPB raised A$3.7m at IPO (A$0.20 per share) and a further A$6.3m (A$0.30 per share) by way of placements. The company has three contracts expected to generate total revenue of CN¥318m (A$66m) over four and a half years. Our DCF valuation of A$0.37 per share assumes that the current contracts are rolled over. Further value should be created through contract wins (A$0.08 per share for every $10m of additional revenue) and profitable growth in operations.
