Bango Share Discussion Threads

[alangrifbang] 17/9/2018 14:43

Everything is too quiet,this may lead to a shock tomorrow ,I will look forward to Simons evaluation on it which I know will be thorough,

[chimers] 14/9/2018 21:55

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[alangrifbang] 14/9/2018 08:40

Simon,DOSENT it puzzle you that with results coming out on Tuesday tis all so quiet,with previous results they do press reports naming contacts won usually leading up to the day, I would respect your take on it,

[red5] 11/9/2018 09:43

It better do I nursing a 37% loss so far still hanging on to these

[kingbarolo] 09/9/2018 12:04

There’s a significant and growing volume of evidence to suggest this company is about to take off. A predicted maiden profit this year to a cash profit £8M+ next year (on top of £5.7m in bank); a very modest forward PE ratio of 18 for 2019 for a company significantly more than doubling in size every year. Firmly partnered with Amazon who are just getting going in India and Africa, etc, etc. When is the market going to wake up and smell the coffee? We all have to make our own calls about that but I’m pretty sure by the end of next year we’ll be looking back at significantly lower historic share valuations. Unless I’m missing something? Would like to hear other forecasts, particularly if different!

[alangrifbang] 08/9/2018 12:54

Kingbarolo, amt ,and Simon,thank you very much for interesting posts full of evidence and outlook.do you know when all the press releases are going to be released the results are getting closer,

[kingbarolo] 07/9/2018 10:45

Nice to see an orderly approach to interims rather than the usual hype and excessive trading we often see before Bango announcements. I’ve been bitten in the past so waiting to see figures before topping up, though I am intrigued by the company’s need to make a trading statement on 20th July, and by Simon reporting from the company that they expect press coverage around the announcement date. The prospects for this company over the next few years are totally compelling - it’s just a matter of timing entry continued investment in my view.

[amt] 07/9/2018 06:49

By the way your assertion that BOKU turnover is opaque is very odd to say the least. Its clear as daylight in their detailed final accounts. It is explained at great length. Also as regards transaction measurement. It would be extremely difficult to work out a net value excluding tax. As far as BOKU are concerned they only see the amounts settled by customers ie the cash. The commission rates are based on that while I think for BGO the telco operators calculate the commissions. So to take a net figure wouldn't make sense let alone be complicated to calculate. Its just a difference in business models and nothing else.
My 20% figure was in answer to your assertion that BOKU was valued at heady heights vs BGO. I demonstrated that if anything BOKU is valued lower than BGO.
I never stated that I thought BGO will need to raise more cash. I think it's unlikely but still possible and in investors minds will only be completely de-risked when cash is being generated.
In my view both companies share price could go much higher and there is clearly less risk of BOKU going back to the market than BGO since BOKU has 4 times more cash and is now generating cash as shown in latest accounts. I doubt BGO will need to raise more cash but there is clearly more risk of that happening vs BOKU.
Anyway I am in the happy position of having a foot in both camps although more in BOKU now due to the spectacular increase in share price I don't see them as rivals as the market is so enormous there is plenty to go for. BOKU for example has 11m active users with a reachable market of over 3 billion. So we at the very beginning of this very exciting market place.
If it eventually became the go to way of paying for goods over mobiles just imagine the billions that could be generated a decade or so into the future. Might not happen of course. Other ways of paying for goods might dominate but the wind is in the sales of both companies at the moment.

[simonsaid1] 06/9/2018 22:14

Let's wait and see Bango's final figures shall we. Your imaginary figure of 20% is just silly. Bango's premium is far from excessive based on Cenkos conservative forward modelling based on observable trends and the cash balance is increasing, so your strange assertion that somehow they might return to the market for funding is utterly unfounded.

Somehow this went from reasonable conversation to silliness.

[amt] 06/9/2018 21:53

I think the share price action over the last 6 months has been a realisation by the market that BOKU was undervalued vs BGO. Now they are getting more in line but still dome way to go especially as BOKU is de-risked now it is generating cash and is profitable at all levels.

[amt] 06/9/2018 21:44

Bango actually is at header heights on every metric vs BOKU. Sales vs market cap. Ebitda vs market cap. Even if you allow for Vat BOKU looks to be about 5 times bigger in sales for example and has a lot more cash in the bank so as its generating cash it shouldn't need to go back to the market. Either BOKU needs to increase 20%or BGO needs to fall 20%. I suspect and hope its the former as I have investments in both.

[simonsaid1] 06/9/2018 21:05

I agree amt - PE is not useful for pre-profit companies and forward PE is limited when profitability is only just ratcheting up. It's as irrelevant as citing the net loss when the inflection point has already passed.

Despite this >200 is still excessive. There has to be a limit even at this stage. I'm sure if Bango were at such heady heights people would say the same thing. Overenthusiastic forward PE is a thing.

[amt] 06/9/2018 20:42

Fair enough commentary until you get to pe of BOKU of 200. That's meaningless for a company that has built a massive global business at an exceptionally rapid pace and invested a lot to achieve this. Only now are profits starting to drop down directly to bottom line having covered fixed costs. If growth slows from 150% to say 80% over the next couple of years profits could be 30 or 40m and pe would fall to ten. Same applies to BGO which is just about breaking even so pe ratio is meaningless. Only way of valuing these companies is to predict profits 2 or 3 years down the road and assess how big these companies could get. Certainly the possibilities are mind boggling. Ultimately billions of dollars of turnover and hundreds of millions in profits. Its a gamble but current pe is totally meaningless. Similar to say Google in their early years.

[simonsaid1] 06/9/2018 11:13

Yes AMT I presume VAT too.

I don't think it's fair to say 20% 'doesn't make much difference'! It doesn't change whether Boku has larger revenue, but it's still the case that I believe TPV is a misleading metric that significantly exaggerates overall transaction volume (by 20% or so). To claim tax is revenue throughput is not very helpful, and Bango deliberately exclude it to make EUS a more honest metric.

As for EBITDA, the problem with it for businesses at the stage Bango and Boku are at is that it heavily depends on the way you amortise their expenditure. There is more than a bit of 'creative license' involved when you consider the expenditure goes back many years pre-profit. They've both heavily invested in prior years and are just now at inflection points into EBITDA profit (actual net loss but obviously temporarily by sheer volume).

There are also tax losses from prior years (in Bango's case a very significant figure) to be set against maiden profits which can be very helpful (by design).

Finally, considerations of cash positions are a bit distorted depending on time since IPO. In Boku's case this is very recent, hence their warchest is larger.

Really, fundamental analysis is limited in situations like this where current metrics only tell very partial accounts of the story, and the businesses are in an inflection point growth phase. The best measures will be ones that attempt to multi-factorally project forward, but the more you do that the more you are guessing!

For me Boku's PE ratio being over 200 is enough to keep me away at these valuations. Bango is at a current low and will likely itself stretch my tolerance for high PE again in the future, at which point I'll happily assess whether to switch or stay out of DCB altogether. It's a difficult exercise riding a new sector like this.

[amt] 05/9/2018 20:05

Interesting. Presumably that means Vat or equivalent. Ebitda is used a lot because it more closely reflects what's going on in the business. So if its Vat it could make 20% difference max which sounds a lot but in the scheme of things when BOKU is ten times or so greater than Bango doesn't make much difference. I would be interested about this opaque turnover figure. Not sure what is opaque about it so we need more details. I think it's the commission they take on transactions hence GP is in the 90s

[simonsaid1] 05/9/2018 12:35

Hi guys. I have been in contact with Bango and Boku's respective investor relations teams today and have found out something interesting.

Boku's TPV (Total Payment Volume) is a gross figure before transaction tax. Bango's EUS (End User Spend) is a net figure after tax. This means that comparing the 2 is not apples-to-apples.

There are other reporting differences. For instance Boku uses a rather opaque revenue figure which I'm seeking to understand. The earnings are also reported in EBITDA which lots of companies do now (Bango have done it too IIRC) and is not enormously helpful.

The other factor is we don't know their recoverable tax losses. Because Bango have been trading in the UK for longer, they have sizeable prior-year tax losses to offset against maiden profits. This is very meaningful in the first few years.

I am doing my best to 'sanitise' figures from both firms to understand the differences.

[amt] 04/9/2018 21:29

I think BOKU is very much on topic. The two companies are very similar and they are the only 2 companies in this field. The fact that BOKU is doing extraordinarily well and is a few years ahead of Bango gives hope that Bango can follow in its footsteps.
I expect Bango to follow a similar profile in the future.
If I was ramping I would have mentioned the Broker had raised its target from 1.80 to 2.45. So not going to mention that.

[nimrod22] 04/9/2018 17:24

274,188buys vs 55,889sells today, and no share price movement. Unless there's some undeclared sells then the share price is liable to jump a couple of % tomorrow.

[alangrifbang] 04/9/2018 14:35

Thank you Simon a very comprehensive report on boku,as you know it was a big regret that I didn't buy into boku,in the end it was to late,I hope BANGO issue these press reports soon which hopefully will keep the share price steady,usually when the results come out they look good but the price immediately drops,then we have to rely on your taking of the situation as to what it is really like,keep posting it's always interesting reading,

[simonsaid1] 04/9/2018 14:28

Amt - my post at least attempted to stay on topic. You are just ramping another stock now. There is a fine line.

Additionally the same can be said of Bango, which has passed its inflection point and has a stable cost base, meaning a higher conversion of revenue to profit.

[amt] 04/9/2018 14:15

BOKU will be in position now when income drops to bottom line so expect rapid rise in profits. I have penciled in 40m in a couple of years on sales of 130m.

[simonsaid1] 04/9/2018 12:38

So this is Boku's first ever positive EBITDA, and it's £1.95m on revenue of £13.18m, on Total Payment Volume (TPV) of £1.17b. TPV growth is 153% YOY. Another way to look at it is that EBITDA is about 0.16% of TPV (standard warning about EBITDA which can be a bit flattering, but I couldn't find any net/cash profit figures).

Obviously, Boku is a larger company, but if 'having the largest company' was the trick to investing, we'd all abandon AIM and be trading bluechips in the main market.

The most relevant metric will be one around growth and profit relative to revenue. This is hard to do as the 2 companies tend to use different financial measures, but we will have the full Bango figures for the same period in a couple of weeks, at which time we can make at least a passing attempt to compare growth and profitability relative to EUS/TPV at that time.

Having said that, given that both companies are reporting above-exponential growth, we must be careful to frame the argument as 'who is more outrageously successful', not 'who is failing', as both are doing extremely well and no doubt catching the attention of the Worldpays and PayPals of the world.

As a side note I see Boku's price rose rapidly on no news in the weeks ahead of the results, so could suggest a leak somewhere. As we all now expect from AIM, the market's reception to their positive RNS has been to drop the price.

Funny old world!

[amt] 04/9/2018 09:13

BOKU results out today. Turnover heading towards 40m usd for the year with EUS probably about 2.3m annualised in H2. It shows where Bango could be in a few years but they have a lot of catching up to do.