Vianet Share Discussion Threads

[galeforce1] 27/10/2019 08:55

jeffian - definitely flies below the radar.
But on Friday there was an interesting commentary about Vianet on Stockopedia's Small Cap Value Report, which I have copied below in case you haven't seen it.
It's very positive, although critical of the company's website which makes it difficult to understand what the company actually does. I agree with this. It took me a while to grasp that 'Smartzones' is the pub measuring business (which is non-growth) and 'Smart Machines' is the vending machine monitoring business (where there is 40% annual revenue growth and loads of potential).

Vianet (LON:VNET)
Share price: 137p (+3%)
No. of shares: 28.5 million
Market cap: £39 million
Trading Update (Tuesday)

This is a "provider of actionable data and business insight through devices connected to its Internet of Things ("IOT") platform".

This PLC has been around for a while - since 2006.

At its heart is the Brulines business, which records the volume of liquid that passes through beer lines.

Trading in H1 is in line with expectations.

CEO comment

The team has continued to make very good commercial progress, particularly with contract wins for our telemetry and payment solutions in the coffee vending and unattended retail vending market, with solid support from our Smart Zones business which is developing new revenue lines. Double digit growth in the period builds on our successful recent track record and further demonstrates that the strategy of leveraging the power of our cutting edge technology to bring game changing business insight to our customers has exciting prospects."

My view

I've just spent some time on the company's website and checking its most recent annual report. I'm very excited by what I've read.

See its investor relations website.

I wanted to remind myself which of its divisions did the beer monitoring, which I understood to be the activity responsible for most of its historical (and present?) profitability.

I was presented with two divisions: Smart Machines and Smart Zones.

Smart Machines:

5db30e6decc74VNET_20191025.PNG

Hmm. Where's the beer monitoring?

Maybe it's in Smart Zones:

5db30ebe8af40VNET_20191025_SM.PNG

Cloud-based, big data in the Internet of Things. Sounds like the perfect investment, doesn't it?

There is a reference to flow monitoring in the description of Smart Machines, so I guess this must be it.

Ah yes, iDraught:

5db30f5d361faVNET_20191025_id.PNG

Another investor keyword: "ecosytem".

So Vianet provides cloud-based, Big Data ecosystems in the Internet of Things.

That's almost everything that I'm looking for in an investment, but I also look for "software as a service".

Alas, I could find no reference to "Saas" on Vianet's website.

It took a little bit of digging but, thankfully, I was able to find a reference to SaaS on vianetplc.com.

Its "Statement of Compliance with the Corporate Governance Code", published last year, dutifully informs us that the company's Directors have the necessary "skills and experience, including in the areas of IOT, b2b, software as a service..."

Boom!

Vianet makes cloud-based, Big Data, software-as-a-service ecosystems in the Internet of Things.

If only it could apply itself to a hot sector like crypto or cannabis, then who could resist investing in it?



My actual view

Vianet looks fairly valued at 14x forward earnings: it has a stable beer monitoring business which is performing ok (even though pubs in general are doing poorly) and other activities which are growing more quickly from a low base.

"Smart Machines" (the growing part of the business) made PBT of nearly £1 million last year. Excluding the acquisition it made, profits in this division were £560k and revenue growth was 42%. Has potential.

[jeffian] 23/10/2019 16:38

I think it's the sort of company that flies beneath most investors' radar both because of size and the fact that it serves a rather 'niche' market. I was only aware of it because of my experience in the pub/brewery industry, otherwise I doubt it would have come to my attention at all.

[galeforce1] 23/10/2019 12:19

We seem to be in demand after the trading statement. But volume is still very low.

[its the oxman] 22/10/2019 08:35

New high come result hopefully.

[this_is_me] 22/10/2019 07:40

Recent impressive performance is continuing and prospects are certainly bright.

[cwa1] 07/10/2019 16:41

Hopefully that's it pulled off the bottom. Fingers crossed...

[zipstuck] 15/8/2019 08:31

I also think that in line means continuation of the slightly ahead announced in June.

Looks rock solid with good divi to continue IMHO

[zipstuck] 15/8/2019 08:06

Assume £2M ARR increase for next five years on these contracts.

[edpick] 15/8/2019 07:51

Aren't market expectations for FY revenue of £16.5m? So, given the contract wins, I would have expected an "ahead of expectations" update. Unless the new contracts only give partial benefit for this FY? Maybe they're just being ultra cautious with their guidance and are setting themselves up for further upgrades?

[this_is_me] 15/8/2019 07:20

It looks like Steve had to sell otherwise there would have been a conflict of interest after taking up his new appointment.

[zoolook] 09/8/2019 09:22

Had half an eye on this for years. Seems like they are at last at point of realising results of changing the mix of their business.

Is Lord Lee still a holder?

[jeffian] 08/8/2019 23:19

edpick,

If you edit your post and replace https: with it will form a link.

Steve Alton wasn't even a Main Board Director, so there's not much to be read into that as he is moving on to pastures new. 120,000 is a fair old chunk for an illiquid stock so I imagine it's just a case of market indigestion rather than a fundamental problem.

[its the oxman] 08/8/2019 16:06

Buying opportunity?

[edpick] 08/8/2019 15:54

Steve Alton... not listed as a Director in the annual report and he's on his way out anyway, so seems pretty logical to sell his shares hxxps://www.morningadvertiser.co.uk/Article/2019/06/18/Vianet-boss-leaves-to-become-BII-chief

[edpick] 07/8/2019 14:32

Yep, possibly. Oh well. 100p looks like the absolute floor in this share, absent a profit warning, and I intend to hold this for a few years.

[zipstuck] 07/8/2019 13:17

Looks like PDMR sale of 120000 last night

[zipstuck] 07/8/2019 10:54

FXXXING BREXIT

[edpick] 07/8/2019 10:07

Disappointing fall here since I bought in at 141p, a few days after the positive AGM statement.

A lot to like here... Smart Zones business holding up well and exciting growth at Smart Machines when you strip out the investment in the recurring revenue model. A good board, aligned with shareholder interests and a consistent 4%+ divi. I know jeffian mentioned EI group being bought out but there's been churn in that sector for years and Vianet always seem to weather it. Working with businesses such as Microsoft shows the quality of this business. Well undervalued imo, much more so than Arden's 185p target price.

[jeffian] 19/7/2019 18:23

Ei Group one of their biggest customers. Could be unsettled by the bid until it becomes clear whether Stonegate will continue to use beer monitoring equipment.

[cwa1] 18/7/2019 09:07

Had a small top up at 128p, now all I have to do is sit back and relax. Hopefully...

[its the oxman] 18/7/2019 08:29

Didn't think this would get sold back sub 130p.

[cwa1] 02/7/2019 15:39

A bit more like it :-)