DBS started Y Ventures at Buy with a S$0.77 target price, pointing to the “differentiated” and profitable online distribution and retail model.
“The group stands out for its proven data-driven approach to online retailing, and as a unique proxy to the fast-growing global e-commerce
market,” DBS said.
The bank noted Y Ventures Group (YVEN) uses large e-commerce platforms, including Lazada and Amazon, to distribute third-party products across 10 countries. DBS said that YVEN has been profitable “from the onset,” noting that’s rare among tech start-ups.
“Unlike traditional distributors & e-commerce platforms, YVEN stands out for its provision of value-added data analytics service to brand partners, allowing them to adapt their products to the market needs. In return, the brands offer significant price discounts to YVEN,” DBS said. “The launch of private labels in areas where YVEN is confident of achieving strong sell-through rates based on analytics.”
DBS noted that YVEN has been selling OEM home and decor products on online marketplaces through its private label, JustNile.
The bank projected YVEN’s earnings before interest, taxes, depreciation and amortization (EBITDA) would grow at a 92 percent compound annual growth rate (CAGR) over 2018-2020.
DBS set a “bull-case” valuation of S$1.23 and a bear-case of S$0.47.