UOB KayHian: Y Ventures trading at ‘excellent entry opportunity’

Singapore two-dollar bills

Y Ventures is trading at an “excellent entry opportunity” after its recent selloff, UOB KayHian said in a note on Monday.

“2018 looks to be a promising year as initiatives in the past year are expected to bear fruit,” it said after a recent meeting with management.

It forecast a three-year earnings per share (EPS) compound annual growth rate (CAGR) of 35 percent, with possible upside to its 2019 estimate if AORA, which is a potential partnership with SingPost for a cross-border consumer purchase platform, is successfully launched in the second half of this year.

It called AORA “extremely scalable,” and not asset-intensive.

The brokerage was also positive on the 50-percent-owned Faire Leather brand launch, with sales of over S$400,000 since its Kickstarter launch in November; it also noted Y Ventures had secured over 20 new consumer brands, with revenue per brand estimated at US$100,000 a year.

“We believe investors may have under-appreciated Y Ventures’ data analytics capability and have wrongly perceived the group to be mainly restricted to book sales or distribution,” it said. “The good sales of self-developed labels such as JustNile and more recently Faire Leather Co. is a good proof of its proprietary data analytics capability.”

It kept a Buy call, with a S$0.80 target price.

The stock ended Monday up 8.49 percent at S$0.57, but that’s off its 52-week high of S$0.75 touched earlier this year.