The South African used-car platform WeBuyCars, targets an R7.8 billion ($420 million) raise as its shares begin trading on the Johannesburg Stock Exchange (JSE) on Thursday. The platform has issued 417,181,120 shares at the rate of R18.75 per share.
Founded in 2001, WeBuyCars acts as the transactional middleman for its customers who want to sell or buy cars. According to its 2023 statistics, the used-car platform purchased 141,851 vehicles, while selling 142,337.
According to its parent company, Transaction Capital, the unbundling and listing allows WeBuyCars shareholders to have direct access to a market-leading asset.
“WeBuyCars’ R18.75 per share price is reasonable considering the platform’s sound business strategy. On the contrary, based on the book-build value they had identified, that should be an undervaluation. However, playing it safe only means more upside if you’ve got it right,” says Jimmy Moyaha, Lebowa Capital Founder.
In addition, Moyaha stated that the used-car platform’s shares have the potential to reach highs of as much as R25 per share in the future. The used-car platform, however, stated that it is investing in its proprietary AI, data, and analytics to boost its e-commerce sales.
According to the platform’s financial stats, e-commerce sales represent 22% of total sales, which shows a decline from its 2022 record of 27%. Directly indicating that there is still more work to be done in that sector.
On the overview, some analysts are a bit skeptical about the WeBuyCars’ progress in the public markets, pointing to the platform’s financial performance as a put-off factor.
According to the Transaction Capital financial reports, WeBuyCars’ earnings were down 14% from the previous year, although the volume of cars purchased and sold by the platform increased by 9% and 13% respectively.