SINGAPORE (Sept 13): CIMB likes Y Ventures Group, the online e-commerce and data analytics provider.
In 1H17, the group posted 47.1% y-o-y increase in revenue due to higher sales of goods on online marketplaces, but still reported a net loss of US$0.2 million ($0.27 million) due to one-off IPO-related expenses.
Despite this, the research house likes Y Ventures as it expands its online presence.
The group’s key products on sale are books, home and living items as well as fast-moving consumer goods, with 80% of its FY16 sales deriving from the sale of books.
The management plans to deepen its existing product categories and expand into new ones. It currently manages and distributes about 5,500 stock keeping units (SKUs) of active merchandise through various online marketplaces.
The group has announced on Aug 14 that it will be forming a joint venture with Toscano for the marketing, distribution and online retail of men’s leather accessories under an online-only private label line, Faire Leather Co.
In a Monday unrated report, analyst William Tng says, “Y Ventures will be responsible for the provision of actionable information (via its data analytics capability), and coordination of the online distribution and fulfillment of these products.”
As the group only sells online, it offers exposure to the fast-growing online e-commerce market in US and Asia. It also offers exposure to the booming data analytics market.
Apart from that, Y Ventures has developed its own proprietary data analytic algorithms that can help third-party brand owners improve sales and inventory management.
The analyst sees e-commerce potential for the group as according to the group’s presentation materials, the global internet retailing market is expected to expand by a CAGR of 10.7% over 2016-2020F, to reach US$1.8 trillion by 2020F.
“Y Ventures is trading at a historical FY16 P/E of 24.3x versus the global peer average of 80.4x,” says Tng.
Shares in Y Ventures are trading at 25 cents as at 11.54am.
