Chinese anti-counterfeit company lists in Australia

Chinese covert tracer company YPB Group will shortly list on the Australian Securities Exchange (ASX) after closing a A$3.7m ($3.5m) initial public offering.

YPB is a Hong Kong-based that has developed a covert marker technology that can be added to branded products and authenticated using a proprietary scanner. The company is also developing an iOS and Android phone app to allow consumers to tell genuine and fake products apart, which should be available in the second half of this year.

According to the prospectus for the offering, YPB's tracers are manufactured in masterbatch form and can be incorporated into the manufacturing processes of "most items" - including plastics, printed goods, coatings, inks and textiles for example - at a cost as little as 0.2 US cents per item.

The tracer technology is unique, invisible and impossible to destroy (even after burning), costs 70 to 90 per cent less than current rival technologies and is covered by two Chinese patents.

Meanwhile, the app will be provided "at no charge to consumers to encourage downloads," and the scanners - which are over-moulded during manufacture so any attempt to open them for reverse engineering purposes triggers self-destruct software code - cost around $35 apiece.

The company - which is led by Australian telecomms industry veteran John Houston - expects to sell its brand protection technologies primarily in China initially  as the country is "major producer and supplier of counterfeit goods", with plans to expand down the line into other Asian markets.

It estimates that the anti-counterfeit authentication market is in Asia currently valued at approximately $14bn and growing at around 20 per cent a year.

The funds raised by the Australian listing will be used to fund sales and marketing activities, further development of the invisible tracer technology and app, and working capital for the business.

To date, the company says it has nine contracts in place with original equipment manufacturers (OEMs) and while these do not contain minimum purchase obligations they are generating revenues.

The flotation - with shares priced at 20 cents each - aimed to raise a minimum of A$3m and a maximum of A$6m. Shares in YPB are expected to list on the ASX by the end of July.