Foster Stockbroking Initiated Research Coverage on 99wuxian
Shenzhen, June 5, 2014 AEST (ABN Newswire) - Leading Chinese m-commerce company, 99 Wuxian Ltd (
ASX:NNW) (99wuxian) is pleased to announce that Foster Stockbroking has initiated research coverage on the company.
Investment Highlights:
- Business model is leveraged to the booming Chinese m-commerce market. 99 Wuxian is strategically positioned in one of the most exciting growth industries in the world (mcommerce) in one of the fastest growing consumer markets in the world (China). NNW listed in October 2013 and was spun out of Handpay, China's leading mobile payments platform.
- Mobile market place accessed via the safety of the banks portal. The company operates a mobile online market place called '99Wuxian.com' which offers a variety of goods both physical and virtual, accessible to consumers via their mobile banking applications. It is the only mobile market place embedded within mobile banking applications, representing a pool of +320m customers. 30m are registered users of 99 Wuxian, providing a large target pool to convert.
- Attractive business model with high barriers to entry.
1. Established relationships with leading banks: 50 Banks including 8 of top 10.
2. Mobile payment security: Transacting through the security of a bank's portal.
3. Cost efficient customer acquisition model: Drawing from a user base of 320m.
4. Supportive legislative environment: Aligned with banks and state owned entities.
- Trading metrics support a steep growth curve. The company has quickly established critical mass in registered users (30m), merchant numbers (155) Business Partners (50) and profitability, laying a very strong foundation for future growth. The business model is simple 99 Wuxian receives a commission for transactions completed on the mobile market place which in 2013 was ~3%
- 3rd largest player by GTV in the Chinese M-commerce market. NNW has quickly become the market leader in the B2B2C segment of the Chinese m-commerce with 3% market share of the overall Chinese m-commerce market by Gross Transactional Value ("GTV") and ranks 99 Wuxian as the third largest by GTV behind Alibaba (valuation ~$180B) and JD.com (valuation $32B).
- Business model provides significant 'blue-sky' potential. We believe the company is positioned for significant growth and forecast revenue in 2017 increasing ~20x to RMB1,592 (A$272m) from CY13 (A$12m) and doubling again $568m by CY19. We forecast NPAT growing to A$84m by CY17 (vs. $0.5m in CY13) with an EBIT margin growing to 33% given the fixed-cost base, reflecting the operating leverage of the business model.
- US IPO highlights appetite for exposure to Chinese m-commerce: There is a strong appetite for US funds seeking exposure to the growth in the Chinese m-commerce market illustrated by the success of the recent IPO JD (Chinese equivalent of Amazon) which recently raised US$1.78b, was 19 times oversubscribed and listed with a market valuation of US$28b. This will be overshadowed by the listing of Alibaba with a valuation range $120-180B. We believe as NNW demonstrates its growth potential and continues to build scale, it will quickly appear on investors radar's and potentially attract M&A interest.
The full research report is available at 99wuxian's website:
http://www.99wuxian.com
investor relations section, research report tab.
To view the research report, please visit:
http://media.abnnewswire.net/media/en/docs/77324-ASX_NNW_Research_Report.pdf
About 99 Wuxian Ltd
99 Wuxian Ltd (ASX:NNW) aggregates over 300 million high quality consumers and 155 leading merchants through a marketplace embedded within the mobile apps of China's leading banks, telecommunications and insurance companies. 99 Wuxian enables increased customer satisfaction, loyalty and retention for its business partners by offering consumers the lifestyle convenience of purchasing virtual and physical goods on a mobile device.
| ||
|
