BNN Technology Share Discussion Threads

[nurdin] 07/4/2017 13:11

astra...the commissions are paid by XNA/Xinhuatong, this being the fees charged by BNN for the use of their platform, as far as I understand it.

[topazfrenzy] 07/4/2017 13:08

Bottom line this company is not worth £168M, its market cap as I type.

It's worth under £50M at this stage IMO, if that, and that's taking into account the £28M cash, burning away at £3M per month!!

[astralvision] 07/4/2017 13:04

My number crunching indicates if BN get 1% of the petrol market, that is £2.85bn.
If they earn £50m that is a commission rate of 1.75%.

Who is actually paying that 1.75%, is it the petrol companies, the retailers, the petrol buyers? That is a high-ish sort of figure in a cut-throat business. Am-ex charge around those sort of levels to some retailers, and a lot of retailers won't use Amex for precisely those reasons!
In addition, the following will presumably want a cut and are not doing it for charity:

Xinhuatong
Xinhua
Local and national partners

So, to me, the figures don't make sense, perhaps a brokers note will add some clarity, but to suggest BNN can get £50m net to them on sales of £2.85bn petrol and there's still room to pay all the other guys is stretching belief somewhat.

[nurdin] 07/4/2017 13:04

The more important question ,which no one seems to have asked is,if BNN are targeting only 1 % of the market,who has the other 99% ? How strong is the competition? I havent heard of other players in the market apart from Alipay and a couple of others whose names I forget.Will they allow BNN to muscle in? Chinese can be ruthless when it comes to companies encroaching their territory!

[topazfrenzy] 07/4/2017 13:02

This dog is going to bite you in the bum, put it down now before it ruins you!

[astralvision] 07/4/2017 12:50

My understanding is the petrol pay initiative is also part of the Xinhua app. Given, on the face of it, the poor take up of the initial three services via Xinhua, is there any real reason to think the take up will be any better for petrol?
BNN/Xinhua will be competing against plenty of alternatives, after all, no-one is going without petrol right now in China for lack of a Xinhua app.

Unfortunately the analyst notes have gone down the path of take a massive market and then assume you only get a very small % of it. To be fair, not sure really what else you can do.

For example, from the original deal, Mirabaud reckoned the market for mobile top ups was £47bn and BNN would get 3% of it.
For Utility Payments £218bn, with a 5% share
traffic fines payments £11bn with a 16% share.

It seems pretty clear that the take up, least to date, is nowhere near those levels. I'm not bothered by that as such, but where is the growth to get anywhere close?

Now Mirabaud are suggesting that petrol could be worth £50m to BNN if they only get 1% of the market, the market being worth £285bn. Now I don't know the Chinese petrol market but try doing a few number crunching exercises on those figures and see what % commission you come out with. Seems high to me, and does BNN's take include or exclude what they have to pay to local partners and national partners?

The thing is no-one has a clue what the take up will be, but, to date, Mirabaud's guesses have been way too optimistic, so is there any reason to think they might have got it right with petrol?

[perfect choice] 07/4/2017 12:31

Been busy since posting this morning so only just catching up.

On that £50M ripplevale, I believe its based on a only a 1% market share and is net income to BNN. The commission rate will be notably higher as well, not the 0.2% in place for the mobile pay market. The pre-pay petrol card market in China was £285 billion in 2016 and growing. BNN now has deals in place to enable mobile petrol pre-pay for 80% of the petrol stations in China. This is recent information, not "old material".

Its all got to happen of course and doesn't start until H2. But this is precisely what investors want to see and makes confidence in future revenue growth much more of a certainty, rather than "market % assumptions" sometimes in analysts reports. This is also just one "add-on" deal to the base mobile pay GTR business. There are others being worked on to add further "extra revenue value".

This is why I am more relaxed on cash flow. But we could really do with a new analyst report and expect that after the annual results. Forward looking statements will be key in the annual report.

[newmanontheblock] 07/4/2017 12:17

Nurdin. I am down on paper a lot! But I have yet to lose a penny as I have not sold. Only time will tell. GLA.

[nurdin] 07/4/2017 12:07

Excellent post there astralvision.

Let us not forget that BNN have a strong institutional backing.They too must be smarting from this fiasco given that they subscribed heavily to BNNs several cash calls last year .I can only assume that they have taken a long term view and are not (probably)too fazed by this glitch early in BNNs development.But will they support another cash call?

I am convinced however that BNN will raise cash (and plenty of it),when they list on Nasdaq in Q3.The reason behind the delay to Q3 is now clear.They needed the time generate decent revenue numbers to justify their credential for a Nasdaq listing.

Will be interesting to see how the story pans out.

By the way I have lost £12k in hard cash and am down another £5k on my now much reduced ISA holding.Can anyone better that? lol

[bookbroker] 07/4/2017 11:29

I'd have said Darren Mercer is mostly likely part of that set darcy, he worked for Albert Sharp in Manchester, so knows a thing or two about markets and how they operate!

[charlesdarcy] 07/4/2017 11:24

Apart from book broker and the usual vermin Topaz .

Some excellent posts this morning from all , people really getting in deep on figures and footfall .

Well done , let's hope the board are reading this morning .

BNN must learn from the last few months of no news imo it has cost the share 35% value of today's price to long term shareholders .

I have seen a raid before in a share I was in which had all the hallmarks of a large group named by a well known broker as the Cheshire mafia who get mugs to write slander and lies about a stock and use funds from every off shore country you can think of .

Take note BNN more updates good or bad kill of the crooks who use AIM to rip stocks apart ... imo ...

[astralvision] 07/4/2017 11:16

Genises
I am well researched on BNN. I am aware there have been a number of 'one offs' such as payments to the various provinces for set up fees. There could be more set up fees as further deals get announced, we don't know yet.

re I've suggested cash burn is around £3m/month

For H1 2016 the cash flow out was £6.3m
From the RNS re cash position, we can deduce BNN burnt around £17m in H2 2016.

I accept there may or may not be one offs in those figures, but we simply do not know.
What we can say is that cash burn in H2 2016 was pushing £3m a month.
If you feel that figure is 'way out' then please enlighten me by way of any factual evidence.
At the very least the cash burn is high and growing. That is perfectly normal for a business at this stage in its development. I'm not concerned with the cash burn as such, the concern is no to low growth in take up reflected in the GTV figures over the last 5 months and, to date, no explanation for that.

I'm a holder and I'm not looking for a short term trade or quick turn, but don't see any point in not fully discussing what is going on here.

[cheshire pete] 07/4/2017 10:51

Newmanontheblock,
Agree, many of the comments here would appear to be from short term traders looking for a quick turn rather than longer term investors.

[genises] 07/4/2017 10:46

Astralvision
You need to do better research
Look back to the RNS and you will see a one off,which means as usual your cash burn is way out .
DYOR and do it properly

[bookbroker] 07/4/2017 10:36

Sell this dog!

[ripplevale] 07/4/2017 10:13

The average monthly figure in Q1 is £130-135m, virtually the same as in Nov and Dec £120-125m (you can work out these figures by subtracting October which we know from the derived Q4 figure). No data on the monthly uptake was provided. March could be lower as BNN like to inform you of good news but are quite partial (unless you are connected to some brokers in Manchester) on bad news.

If the footfall to the app (leaving aside the churn rate, return users etc) is not good then we have a problem. There are numerous other explanations for the figures but we need to hear them.

[wla2510] 07/4/2017 09:44

To Ripplevale, the figures are not disappointing except to those who got carrried away with £13bn GTV etc. The figures are going to support a 2017 profit of about £10m IMHO and that's not over egging it. Then there is the other revenues to kick in second half and in to 2018. If the lottery is back up and running BNN may well benefit too. In 2018 you can see profit of £25m p/e of 25 that's BNN worth £625m think there are 200m shares so you can work out the potential value of a share when 2018 profits can be estimated. IMHO DYOR

[and11] 07/4/2017 09:38

Ripplevale! Not quit shore how you can say the app has flatlined!!! I would suspect they are only just starting to roll out there advertising campaign into many of the provinces recently signed up! In addition mirabaud numbers were based on all provinces being in full flow with the full offering of products! At this Stage BNN have many products to be launched during 2017 with more to follow! As we all know this sector can bring huge numbers in very quickly... onwards we go! GL

[and11] 07/4/2017 09:29

Outright buy!!!

[bookbroker] 07/4/2017 09:16

Outright sell!