Y Ventures started at Add by CGS-CIMB as a proxy to big data, e-commerce

Singapore two-dollar bills

CGS-CIMB started Y Ventures at Add, with a target price of S$0.62, as a proxy to e-commerce and big data, with a turnaround story.

“YVEN is a Singapore-based, data analytics-driven e-commerce retailer and distributor, with presence in more than 20 online marketplaces globally, including Amazon, eBay, Qoo10, Lazada and Tokopedia,” the brokerage said in a note last week. “Its key products are textbooks and in-house branded lifestyle products.”

CGS-CIMB said it expected “strong consistent revenue growth” from the online book business, keeping gross margins around 40 percent; it forecast 2017-2020 revenue compound annual growth rate (CAGR) of around 39 percent.

It added that since the IPO, it believed YVEN had secured more publishers, leading to an inventory build-up of S$6 million at the end of last year; that’s why it now expects the company to turn around from its net loss of US$800,000 in 2017, to post a net profit of US$3.2 million in 2019.

“We believe that catalysts for sales volume growth could come from on-boarding of more major brands. Its competitive advantage is its proprietary in-house data analytic tools to spot demand trends and drive sales in online marketplaces globally,” it said. “We think the group could start to sell its analytics solutions to global brands and e-commerce platforms after establishing a track record in other product categories beyond books and living products in the longer term.”

It noted that the stock trades at a 2019 price-to-earnings ratio of 23.2 times, an around 50 percent discount to global peers’ average of 45 times.

The stock ended Monday at S$0.49, up 3.13 percent; Singapore’s market was closed on Tuesday for the Vesek Day holiday.