At the small end of the Australian share market, there are a number of companies with the potential to grow materially in the future.
Two that investors might want to get better acquainted with are listed below. Here's what you need to know about them:
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Hipages Group Holdings Ltd (ASX: HPG)
The first small cap to look at is Hipages. It is a leading Australian-based online platform and software as a service (SaaS) provider.
The company's platform connects tradies with residential and commercial consumers, providing job leads from homeowners and organisations looking for qualified professionals. It also offers tradies a solution to run their business from, cutting down on general administration duties.
Goldman Sachs is a big fan of the company and believes it is well-placed for growth over the next decade. The broker notes that Hipages is building a compelling marketplace, with a healthy balance between consumers and tradies. It has also been pleased with recent app download data, website visits, and job ad growth.
It expects more of the same in the future and sees scope for Hipages to grow its share of industry advertising spend from 5% to upwards of 60% eventually.
Goldman currently has a buy rating and $3.40 price target on its shares.
SILK Laser Australia Limited (ASX: SLA)
Another small cap ASX share to watch is SILK Laser. It is a laser, skin care, and cosmetic injections company.
Thanks to increasing demand and store network expansion, SILK has been growing at a strong rate in FY 2021. For example, during the first half, SILK reported a 62% increase in network sales to $44.9 million and a 305% increase in net profit to $4.7 million.
At that point, management advised that it intended to grow its network by 6 to 10 new clinics per annum from 60 up to a target of approximately 150 clinics. However, it has just accelerated its network growth by signing an agreement to acquire Australian Skin Clinics in Australia and The Cosmetic Clinic in New Zealand for $47 million. This adds a total of 56 more clinics to its network, taking its total to 117.
Management notes that it also solidifies its number two market position and opens the company up to new markets.
Analysts at Ord Minnett are positive on the company and currently have a buy rating and $5.06 price target on its shares.
