Deciphering the skepticism around Ohmyhome’s IPO

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Hello reader,

I’ve never been very good at spotting red flags. Dismissive friends, dishonest significant others, and unprofessional colleagues unfortunately have a storied place in my past. Perhaps I’ve got to be more aware and discerning, but willful ignorance tends to be more in line with my easygoing nature.

It’s an awfully annoying conundrum. Luckily though, I don’t have to go through any of that if I’m going to invest in Singapore-based property platform Ohmyhome, which is gearing up to list in the US. In today’s featured piece, Tech in Asia’s chief analyst Simon Huang points out the red flags for blissfully unaware folks like me.

Not only does he raise questions about whether Ohmyhome can be considered a tech company and whether it can continue as a going concern, but he also highlights a related-party transaction that exaggerates revenue growth in the six months ending June 2022.

Further, the premium story uncovers the circumstances that led Ohmyhome to hit public markets at an implied valuation that’s much higher than its peers’ despite the gloomy conditions for unprofitable tech firms.

Today we look at:

• The warning signs surrounding Ohmyhome’s IPO
• The current state of global mobile spending
• Other newsy highlights such as Singapore’s plan to require locally listed firms to disclose CEO salaries, and Animoca investing in a virtual-reality space builder

Premium summary

A tough sell

Image credit: Timmy Loen

Ohmyhome intends to raise up to US$16 million by listing on the Nasdaq at a valuation of US$88 million. However, the finer details of its IPO prospectus have been generating headlines.

• Premium pricing: The stock market remains averse to loss-making tech firms, with rich valuations becoming a tough sell as interest rates stay high. Ohmyhome perhaps didn’t catch the drift as its implied valuation of 21.9 on a price-to-sales multiple is significantly higher than its competitors — 4x more than PropertyGuru and way above what PropNex and APAC Realty command.
• Convenient: Ohmyhome’s revenue in the six months ending June 2022 was boosted by a related-party transaction involving David Loh, Ohmyhome’s chairperson and the husband of COO Race Wong. Given the nature of this deal, the revenue recognized may not be sustainable beyond 2022. And if we remove it, then revenue for the said period grew just 2%.
• A dose of reality: Ohmyhome’s accountants have expressed “substantial doubt” about the firm’s ability “to continue as a going concern,” based on its financial statements as of December 2021. The company itself has acknowledged that it all “depends upon aligning its sources of funding” with its expenses and debt repayment obligations.

Read more: Ohmyhome IPO raises red flags

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