BNN Technology Share Discussion Threads

[charlesdarcy] 21/12/2016 18:21

A small % on billions is still huge gross profit for BNN back here .

Let's hope they have the lid on keeping running costs down and getting a healthy net profit to the bottom line as this is what really boosts the hype around the further years potentials being seen to run a very tight ship .

That is what the large fund long term stake holders look for .

[ayesha4] 21/12/2016 18:08

This will be a massive business. Ive lost big time this week. The only position I have ... is here.

[the prophet] 21/12/2016 17:38

nurdin

that is absolutely true as BNN make very clear in the TU, as follows:

(1) Gross sales are the total transaction value of all payments/services that the Group processes in a period. We receive a small percentage commission from the transactions we process and this is what will be recorded in our disclosed revenues at year-end. We receive a modest commission on the B2B transactions, however strategically we aim to transfer customers from B2B to B2C customers in the future which will drive higher margins, and greater data acquisition, for the company.


A small % is absolutely fine when you are talking about the sort of markets BNN are operating in.

[nurdin] 21/12/2016 17:34

But lets not get blinded my these billion £ numbers.They will record only a fraction of that when they report their revenues,depending on the commission rates they achieve.

[the prophet] 21/12/2016 17:34

ayesha, cheers, now that makes more sense! Given the way things are moving, I think you could well be right, not unreasonable given the progress since the Mirabaud report was first written.
We are talking large numbers here and the odd '0' is easy to loose or gain!

[the prophet] 21/12/2016 17:32

Hi Nurdin

no, Mirabaud have made no allowance for the lottery restarting, their report is only forecasting on existing and legal lottery activities with minimal revenues for the legacy operation.
eg, The existing lottery revenues include the sports mobile lottery revenues.

There is a separate section in the report for the legacy on line lottery revenues, page 7.

it is easy to do, but do not mix up mobile and approved lottery activities, done with a variety of JV players, and the online lottery, which is the legacy suspended activity.

Hope that helps.

[ayesha4] 21/12/2016 17:25

So sorry - the aim is £20 billion transactional revenue for 2017.I dont think it is unreasonable.

[the prophet] 21/12/2016 17:25

PC

yes, you are correct re forecast GTR run rate of around £1bn per month.

MW's last but one piece suggested various possible outcomes re a new Mirabaud report, which is apprently due out soon. The suggestions were that 2016 losses would be much greater than forecast, which due to costs of start ups etc sounds very reasonable. Of more interest was the suggestion that 2017 profit forecasts could be beaten and 2018 could be trounced. Although it's fair to add in the rider that there are now more shares in issue since forecast was made and not to rely too heavilly on figures that are somewhat a stab in the dark, given the rapid way things are developing.

[nurdin] 21/12/2016 17:22

Hi TP....we may be talking at cross purposes here.Mirabaud show gross revenues of £13.3bn for 2017. Below that number in the table they give a breakdown of net revenues which shows contribution from the lottery activities to the tune of circa £26m.I can only guess that they expected the lottery business to restart in 2017 and have allowed for it in their numbers.

Anyway their forecast for 2017 for only the Xinhua News App is circa £59m as you have mentioned..I made a mistake of taking commission rate of 0.2% so thank you for pointing that out.

Reworking my numbers with correct rates, I come not too far from £13bn gross.

[perfect choice] 21/12/2016 16:57

So basically TP, Mirabuad were previously working in a GTR run rate of around £1000M per month. I'm interested in the assumed overall commission rate they state in their new report when issued, 0.46% sounds too low now with the new set of revenue generating services. The mix is important of course but I expect a higher figure than that, along with an uplifted GTR of course. Packaged their new report with Nasdaq listing, then you have a great catalyst for share growth in 2017.

One question I would appreciate knowing and answer if anybody knows, have BNN stated how often they will issue GTR data? Quarterly I guess but have they given any indication?

[charlesdarcy] 21/12/2016 16:52

Ayesha ;
What do you mean by 2B , ?

[the prophet] 21/12/2016 16:39

Hi Nurdin again

one further point, the Mirabaud note forecasts an overall commission rate of 0.46% on the forecast £12.869bn gtr.
It's all in the note, but the rate for traffic fine revenues is forecast to be higher than the 0.2% for mobile top ups and utility bill payments, thus raising the overall average.

I agree that the most useful figure is net revenues, but as Ayesha was quoting £2bn gtr, that just did not tally with the broker forecast, or indeed with the recent TU.
Also as BNN in the recent TU were quoting GTR, one has to use those figures to gauge some idea of where we are.

[the prophet] 21/12/2016 16:33

Hi Nurdin

I think you have that wrong, the Mirabaud note was written almost a year after suspension of the on-line lottery,but there are other lottery interests, as follows:

RNS 22nd September

In addition, NewNet is making a cash and asset investment to acquire a 10% shareholding in its important trading partner Xinhuatong, the exclusive provider of mobile payments, information and other key services to the Xinhua News Mobile App owned by China's national news agency. NewNet will transfer its lottery assets into its Xinhuacai joint venture with Xinhuatong. DJI, as the technology platform provider to NewNet, is expected to benefit from enhanced revenues and profits as a result of NewNet's stronger partnership with Xinhuatong.

and from the interim results end of September:

'In March we announced our joint venture, Qingdao Baifa, would promote an approved mobile lottery offering by using our football club resources and unique game content. After a slow start early in the second quarter, the European Championships helped to improve daily game activity as the games are primarily focussed on football.

At the end of March, the Group, through its investment with the Heilongjiang Sports Bureau (HSB), Longti, secured an exclusive service agreement to promote sports lottery scratch card sales across Heilongjiang Province. Performance was broadly in line with expectations in the first half. The online booking platform is well positioned and ready for the forthcoming winter sports season (which begins in the autumn) and the scratch card business is generating gross sales in line with expectations.

Whilst no longer the primary focus for the Group, the land and digital lottery businesses generated GBP8.3m in gross sales, resulting in revenues of GBP0.5m in the first half of 2016.'


The Xinhua partnership is forecast to produce £12.869bn gross transactional revenues(gtr) in 2017 and thus accounts for 96% of the forecast gtr, the remainder being the lottery revenues that are still legal.

[snowyflake] 21/12/2016 16:14

The Prophet - I agree with you. The start point is transactional revenue. I do not mind relying on the Mirabaud figure although I suspect as the further deals are announced that figure will increase but let us not get carried away with ourselves

So taking the Mirabaud figure as transactions = £13.38 billion one then applies the % per transaction. The basic rate is tow tenths of one per cent per transaction.

I will leave it to someone else to do that calculation

But some of the transactions command a bigger % and so the gross income to BNN increases.

[nurdin] 21/12/2016 16:12

Hi TP.

That gross transactional revenues of £13.378bn includes contribution from the lottery operations which, as we know, are now no longer,from what I can see.

The most meaningful and useful figure from that report is the net revenues at £59m which relates only to the Xinhua News App. If grossed up with 0.2% commission, the gross revenues comes to £29.5bn or near $37bn.

( I will check again..that looks high to me)

[charlesdarcy] 21/12/2016 15:57

Ayesha4 ;

You are right I checked back and the figures are amazing .

Not sure why Nasdac is so complicated though for them to list as they must of jumped most of the hurdles now .

I know of a fund looking for a few i's to be dotted and they will enter the market but when a drop comes along they step further back they are long term holders .

I am very tempted to buy in during the Xmas period !!

[the prophet] 21/12/2016 15:53

ayesha4

Mirabaud note of April was forecasting 'gross transactional revenues' of £13.378bn in 2017, so you're £2bn looks very low to me and not too amazing?

Don't get me wrong, I think BNN are doing a great job, but not so sure re your £2bn.
From the recent TU, looking at the link for the graph, October gross was around £30m, November was £120m,and from all accounts the figure looks set to soar again in december. This is from a standing start, with not all provinces yet on stream and more contracts and deals to come.
it could well be the run rate is already pushing your £2bn, you sure you've got that figure right, as the message I'm getting is the Mirabaud gross transactional revenues forecast is likely to be increased, not divided by 6+?.....

[ayesha4] 21/12/2016 15:38

Yes it is.It is say look !Even if they achieve just that - its pretty amazing. Mirabaud will update their note in January after the next update. It will be pretty compelling.

[nurdin] 21/12/2016 15:30

No one is denying that.In fact your $2bn revenue looks very much on the low side imo

[ayesha4] 21/12/2016 15:28

They had a lottery business. Revenues went to almost zero.Look at the progress and the growth. Its nothing short of fantastic.

[nurdin] 21/12/2016 15:19

No need for that.It was a simple question and needed to be asked if you are going to band around numbers without an explanation.! I am quite chilled.

[ayesha4] 21/12/2016 15:06

They announced £120m as far as i know and they will have a minimum of £2b for 17 - believe me they will smash this - underpromise and over deliver. You guys need to take your beta blockers. Your angst is pointless. Chill and relax.

[newmanontheblock] 21/12/2016 15:03

Nurdin. Cannot be gross revenues as they have already announced £150m gross revenue this November. Hence £2bn gross revenue for 2017 would imply no growth versus current run rate.

[nurdin] 21/12/2016 14:57

I suspect it is gross revenues. If so very conservative!

[newmanontheblock] 21/12/2016 14:39

Ayesha4. Is that BNN revenue (commission)? Or revenue through portal and they will take a small % of that $2bn as their revenue? Guess you get my question?