Y Ventures Group - CIMB Research 2017-09-12: E-commerce Proxy

Y VENTURES GROUP LTD. 1F1.SI

Y Ventures Group - E-commerce Proxy

Y Ventures Group (YVEN) is a Singapore-based online e-commerce and data analytics provider.
1H17 revenue grew 47.1% yoy due to higher sales of goods on online marketplaces but YVEN slipped into net loss of US$0.2m due to one-off IPO-related expenses.

YVEN aims to expand its online presence in the UK, Europe, Northeast and Southeast Asia, expand its product range and enhance its data analytics capabilities.
YVEN is trading at a historical FY16 P/E of 24.3x.

YVEN was listed on SGX’s Catalist Board on 11 Jul 17 at a price of S$0.22.
Founded in 2003, the company is a Singapore-based data analytics-driven e-commerce retailer and distributor, with presence on multiple online marketplaces, including Amazon, eBay, Qoo10, Lazada and Tokopedia.
Key products on sale are books (mainly academic books and textbooks), home and living items (clocks), and fast-moving consumer goods (instant coffee mix and soy milk). “JustNile” is its in-house brand of home and living products.

According to management, about 80% of sales in FY16 were derived from the sale of books. Management plans to deepen its existing product categories and expand into new product categories.
The company currently manages and distributes approximately 5,500 SKUs of active merchandise through various online marketplaces.

On 14 Aug 17, YVEN announced that it will form a JV with Toscano Pte Ltd for the marketing, distribution and online retail of men’s leather accessories under an online-only private label line, Faire Leather Co.
YVEN will be responsible for the provision of actionable information (via its data analytics capability), and coordination of the online distribution and fulfillments of these products.

YVEN offers exposure to the fast-growing online e-commerce market in the US, as well as Asia, as the company only sells online. The stock also offers exposure to the rapidly growing data analytics market.
YVEN has developed its own proprietary data analytic algorithms that can help third-party brand owners improve their sales and better manage inventory.

According to the company’s presentation materials, the global internet retailing market is expected to expand by a CAGR of 10.7% over 2016-2020F, to reach US$1.8tr by 2020F.
The US internet retailing market is expected to grow at a CAGR of 13.6% over 2016- 2020F to reach US$0.5tr by 2020F, while the Asia Pacific internet retailing market is expected to grow at a CAGR of 12.4% over 2016-2020F to reach US$0.8tr by 2020F.

YVEN has a major customer (Zhoukoudian Trading, a wholesaler of books) that accounted for 33.8% of its FY16 sales. The Elsevier Group (a supplier of medical textbooks and reference materials) accounted for 66.6% of YVEN’s FY16 purchases.
Historical valuations YVEN is trading at a historical FY16 P/E of 24.3x versus the global peer average of 80.4x. Historical FY16 P/BV is 14.3x versus the global peer average of 10.4x.

William TNG CFA CIMB Research | http://research.itradecimb.com/ 2017-09-12

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