SYDNEY - In the landscape of small-cap technology shares on the Australian Stock Exchange (ASX), Frontier Digital Ventures Ltd (ASX:FDV) and Bailador Technology Investments Ltd (ASX:BTI) stand out as two companies with significant potential for high returns, despite currently low valuations.
Frontier Digital Ventures, which operates property and automotive online classifieds in emerging markets, is yet to fully capitalize on digital services. The company has demonstrated resilience amidst a challenging market environment, achieving an operating EBITDA of $2.2 million in Q3 2023. Despite a notable drop in its share price, the company is recognized for its strong operating leverage potential. By 2030, Frontier Digital Ventures is expected to experience substantial profit growth and an increase in valuation.
On a similar trajectory, Bailador Technology Investments focuses on investing in unlisted global tech businesses during their expansion stage. Its portfolio includes companies like Siteminder Ltd (ASX:SDR), Rezdy, Access Telehealth, Rosterfy, Nosto, and Mosh. Notably trading at a 23% discount to its post-tax Net Tangible Assets (NTA), Bailador also offers investors a sizeable dividend yield. The firm has a history of profitable exits exemplified by the sale of InstantScripts to Wesfarmers Ltd (ASX:WES). Looking ahead, capital growth coupled with dividends is anticipated for Bailador by the year 2030.
Investors keeping an eye on the ASX small-cap tech sector may find these two companies to be attractive opportunities for long-term investments, especially considering their projected growth and potential financial rewards within the next seven years.
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