Bango Share Discussion Threads

[drydata] 01/6/2020 19:58

Very nice document Mr. LEADING. VERY HELPING!

[amt] 01/6/2020 19:34

Leading, great post, good research.
I think if we get the numbers you mention then I think a pe of 40 by end of 2021 given the huge potential. So I reckon 5 quid by end of 2021.

[leading] 01/6/2020 10:10

My take on some of the issues raised in recent posts:

Audiens was purchased by Bango to access its software products to accelerate Bango's move into Marketplace. That software has now been fully integrated and Bango owns the IP of the bits it wants. That left Bango with a business operating a Customer Data Platform, which was not core to Bango's activities. The deal with NHN was a really neat way of removing the distraction of a CDP business whilst retaining a stake in the upside through its 40% shareholding.

From the date of the deal, Audiens will be reported using equity accounting. This means that Audiens turnover will not be included in Bango turnover. Audiens will appear as a single line in Bango P&L being Bango's share of the profit or loss of Audiens for the period. The investment in Audiens will also appear in the Bango Balance Sheet as a single line representing original cost plus additional investment less dividends received by Bango to date.

Marketplace is a separate business from Audiens and is 100% owned by Bango and its revenues and costs will therefore be consolidated in the Bango accounts. I expect a divisional breakdown may be given in the financial statements.

Bango's EUS growth continues to be very rapid and has probably been accelerated a bit by Covid. My estimates are a bit lower than amt above but I am looking for EUS H1 20 of £942m and H2 20 £1,210m with run rates at period end of £2,169m and £2,771m respectively. For 2021 I have H1 £1,778m and H2 £2,272m with run rates of £4,031m and £5,149m. Please excuse the spurious precision!

Bango revenues will track below this EUS progression as there are volume discounts. This trend has been evident over the past few years and I assume will continue. Still, I estimate gross payment revenues of £12.3m in 2020 and £20.8m in 2021. There is uncertainty here over the pace at which margins decline.

Marketplace looks like another business that can grow exponentially, but it is nascent and not likely to generate profits in the next couple of years. After paying data providers, I think (based on a broker report if I remember right)that it will generate gross profit of around 40% of revenues.

Bango results will depend on investment decisions. It is easy to see them increase investment in Marketplace to the detriment of current year profit. Anyway, FWIW I estimate a PBT of £2.0m for 2020 and £8.8m for 2021. On the basis that Bango should trade on at least 20 times the next twelve months earnings then that gives a share price target of around 250p by the end of 2020. If it catches the imagination, it could well go a lot higher.

Wealth warning, DYOR and remember that I am a big fan of Bango with rose tinted glasses.

[egrid1] 01/6/2020 10:07

AMT -
Audiens is indeed a separate business from Bango, Audiens is now a subsidiary of Bango Deep, as stated in the RNS...

"Cambridge, UK, 3 April 2020 - Bango (AIM: BGO), the mobile commerce company, has expanded its strategic partnership with South Korean big data business NHN Corp ("NHN"). NHN will invest £6.5M into the Audiens data platform business through an investment into Bango Deep Limited ("Bango Deep"), the Bango subsidiary that owns Audiens."

But Bango Deep is only 40% owned by Bango, as a result of the partnership, and the NHN investment.

It was/is still unclear to me what Audiens and Bango Deep now bring to the party, for shareholders in Bango, hence my original questions, but reading around this morning, I think I am getting a clearer picture...

Is Bango Deep effectively a services company, that is not connected to Bango (other than Bango own 40%)? A company that is set up to provide Customer Data Platforms to third parties, using NHN and Audiens expertise in the area, and the third parties own data (but not necessarily Bango data, which will have to be purchased from Bango, if those third parties want it?).

I recall that Bango was being approached by third parties to monetise their own data using the Audiens expertise... now there is a separate business to do that (which Bango owns 40% of).

This is what I understand from the Progressive note on the deal
hxxps://bangoinvestor.com/wp-content/uploads/2020/04/BGO_20200403b-Supercharging-customer-data.pdf

Bango Deep / Audiens will be to a small degree, in competition with Bango, in that where companies that wanted to monetise their own data (as opposed to buying Bango Data) were coming to Bango, they will now go to Bango Deep (40% owned by Bango).
What happens when a company has their own data that they wish to monetise - and sell on?

The CDP that Bango Deep creates for the third party will then be a direct competitor to Bango marketplace. Will Bango Deep simply charge a fee for creating the CDP - or will there be restrictions that the CDP cannot then sell on data to compete with Bango?

[amt] 01/6/2020 07:17

The vision of the partnership is for Audiens to become a global data leader, through a technologically sophisticated, but easy-to-use Customer Data Platform (CDP), which enables brands of all sizes to plan, execute and analyze their online marketing activities. This expands on the initial relationship between Bango and NHN, announced in October 2019, which enabled app developers and marketers to access anonymized audiences of high value mobile and internet users in South Korea. What began as a further licensing deal (referred to in the Trading Update issued in December 2019) has evolved into this strategic partnership and investment agreement.

The strategy for NHN and Bango is to continue to develop the Audiens CDP product - which is optimized towards quick data onboarding and self-service by marketers - and incorporate advanced capabilities from the established, deep data technology developed by NHN into the Audiens product. The GBP6.5M investment, together with the technology expertise brought by NHN, will enable the existing Audiens business to accelerate its growth as it addresses a bigger, global market opportunity. In addition to enriching the Audiens CDP product, this investment gives NHN data technology a new channel to reach global customers beyond South Korea and enables Audiens to bring new products to market more quickly.

[amt] 01/6/2020 07:13

Audiens is a separate business from Bango and Bango Market place so the original model is the same. It will be interesting to see if Audiens takes off and goes global after the recent game changing deal.

[ic777] 01/6/2020 03:11

Marketplace and Audiens are 2 separate businesses....marketplace revenue was negligible in 2019, as mostly in Nov and Dec...I estimate at most 300-500k for full year....but this years should be 8-10x last year's revenue (from a low base).

[simplesimon1] 01/6/2020 01:38

This is very confusing. We have been investing in Bango, which has been building up Audiens and have been told that there was no profit to report in previous years because the money was going to build up Audiens. It looks like they might have set up one company to draw in investors based on promises of future income and to pay the expenses and another company to take the profits. I can't beleive this, please tell us this is not so. I am not accusing, I am only questioning, seeking claification for investment purposes. Are any principals of Bango involved in drawing money directly from Bango Deep without sharing it with the rest of us? We the loyal investors who have been paying the expenses.

[egrid1] 31/5/2020 23:00

The RNS stated:"Following this investment, NHN will own 60% of Bango Deep with Bango holding 40%."

Bango Deep owns audiens - so in effect, only 40% of audiens is now owned by Bango.
But who books the revenue for the Bango marketplace? Is this revenue earned by Bango Deep, or still by Bango?

My understanding, but I was hoping others could shed light on it as I do not fully understand it, was that the marketplace was part of Bango Deep / Audiens - which is 40% owned by Bango.

If so, only 40% of profits from marketplace will find their way to Bango accounts.

RNS:

Bango Deep needs the data from Bango, to create the marketplaces - so does Bango sell the data to Bango Deep?

If not, and we were all looking at the data to be the pearl in the oyster, then 60% of that pearl has now been sold to NHN.

I really do not understand where we are at now with the company.

I own shares in Bango, but am unsure where I should expect it to be creating revenue in the future - DCB + 40% share of data in bango deep, or DCB + sales of data to Bango Deep + 40% of Bango Deep profits?

[simplesimon1] 31/5/2020 20:14

Those are good questions Egrid. Who owns Audiens? Who owns Bango Deep? We are talking about profit forecasts. How do these forecasts relate to Bango common shares?

[egrid1] 31/5/2020 10:57

Is marketplace still fully owned by Bango? Who generates the revenue for Marketplace - Audiens or Bango?
I thought Audiens was only 40% owned by Bango.
I have not really understood the sale of the 60% stake in Audiens - what that meant to Bango and marketplace.
Can somebody enlighten me?

[lentjes] 31/5/2020 06:16

Cash generation estimates from Marketplace is a very difficult one as even if we get an indication on revenue in the July update we do not know the cost of sales which includes payments to Partners for the use of the data

That said any substantial cash generated from the marketplace should provide proof of concept and an uplift to the share price on top of the forecast growth in EUS will provide

and then we have the Italian mob to consider

[amt] 30/5/2020 05:38

Yes in the short run. What sort of percentage are we hoping for from Market Place Lentjes.
The great thing with the business model is that it's easy to calculate the current EUS and project forward. Hence that's why we know that the company is generating cash. The interims will probably show a million or so of cash generation but H2 its likely to be more like 3 million so 4 million for the year 2020 but crucially by December 2020 we will be able to calculate the annualised cash and see if the 9 million is about right or not.

[lentjes] 30/5/2020 05:25

amt

and that is without any consideration of Marketplace revenue

[amt] 30/5/2020 05:13

IC777 They will already be making a profit and generating cash. EUS annualised run rate is likely to be approaching 2 billion.
Given that 1billion is about the level where cash is generated then the extra billion would be generating about 5 million extra cash.
By December it should be 3 billion annualised and generating about 9 million of cash. They might decide to spend that on additional investment but I don't have a problem with that.
It will be 2021 where it should become clear how big it can become.
By December 2021 annualised EUS could be 6 billion. That could generate 20 million in cash.
Add on other marketing income of say 5 million.
Add on extra cost of say million related to investment and conservatively cash run rate generation of 20 million plus could be justifying a billion dollar valuation by December 2021 in my opinion. DYOR no investment advice

[lentjes] 30/5/2020 05:03

Office in China, where did that come from ?

[ic777] 30/5/2020 02:31

And these audiences can be used concurrently at any one time by many app developers....the interesting thing I realise is that they just set up an office in China and also had Tik Tok as a speaker at their recent UA webinar...so connecting the dots, seems like something brewing on China front...but on the other hand, they need revenue and maybe profitability to start to justify much higher valuations...if they can make few million GBP this year...potentially price will be at GBP 2.5-3.

[lentjes] 29/5/2020 22:02

Bango Maketplace appears to have 65 Audiences with a total value of US$ 10,550 per day if they are all being used on marketing campaigns.

Its just a matter of how many of the 5,9 million Android developers and 2,8 million iOS developers in the world they can get to engage with them.

Do the maths

[simplesimon1] 29/5/2020 09:17

This is Friday, the day when profit takers usually crawl out from under their rocks. Instead we are getting this surge back to a point of resilience. This has to be a good omen.

[ic777] 27/5/2020 10:40

Some profit taking which is normal...I am starting to get a sense though that marketplace could be something bigger than expected.

[amt] 27/5/2020 10:14

Attempt to get some sellers. Difficult to buy in volume, easy to sell in volume.

[enormouswillie] 26/5/2020 21:00

Can’t beat a choc ice with a bit of rimming!

[18bt] 26/5/2020 16:37

Interesting from BGO on social media: "There’s been a huge rise in education app usage, as a result of lockdown. Bango has created new audiences for app developers to market to. They're made up of users who pay in education apps. Get your campaign straight to these paying users to get to revenue faster"

[thewheeliedealer] 25/5/2020 21:28

Hi all,

My mate Peter @Conkers3 and myself did a Twin Petes Investing Podcast a few days ago and part of our discussion covers BGO. We also talked in depth about the current situation in the Markets and how we reckon things could play out. Anyway, if you use Apple or Audioboom you can find it under the 'Conkers Corner' Channel (you want TPI Podcast 23) and you can find it on Soundcloud at the link below.

I hope you enjoy it and find it useful,

Cheers, WD
@wheeliedealer