Company Overview: Yojee Limited (Yojee), formerly Southern Crown Resources Limited, is engaged in developing a sharing economy-based logistics technology through the creation of the Yojee delivery network and blockchain technology platform. The Company is engaged in the development of a logistics technology platform to enable mass participation in a sharing economy network to help both carrier and sender. The Company's collaborative economy technology platform focuses to provide on-demand movement of goods and services. The Company's platform aggregates and optimizes logistics businesses. Yojee implements real-time tracking and a blockchain technology payment system. Yojee will connect and enable logistics providers with limited geographical capability. Yojee will also help e-commerce companies. The Company focuses on developing a logistics software to serve small and medium businesses. The Company focuses on the Asia-Pacific region.
 

YOJ Details

Significant Rise in FY19 Revenues: Yojee Limited (ASX: YOJ) is focused on developing a sharing-economy based logistics technology via the creation of Yojee delivery network and secure blockchain technology platform. The industries which use the software of Yojee software primarily include bike courier, global freight forwarder, banking, etc. The market capitalisation of the company stood at ~A$43.32 Mn as on 20 December 2019. YOJ reported a compounded annual growth rate of 94.29% in revenues during the span of FY15-FY19, and thus, it can be said that the company has decent capabilities to garner revenues which could help it in gaining traction among the market participants. During the same period, in its total assets, the company witnessed a CAGR of 45.31%. YOJ is expecting a positive upcoming year with robust growth, addition of new accounts and revenue growth.

The company has successfully completed its fund-raising amounting to $3.5 million through a share placement to institutional and sophisticated investors via an issue of 70 million shares at $0.05 per share. Also, the company has commenced its share purchase plan (SPP) for raising an amount of up to $2 million for general working capital. YOJ’s SPP would enable all eligible shareholders of the company to purchase up to $30,000 worth of shares in the company at an offer price of $0.05 per share. The SPP offer of the company has been opened on 19 December 2019, and it would be closing in January 2020. The company would be utilising the proceeds from its capital raising towards further building out the Asia Pacific and international marketplaces. Further, the funds would be used for expanding its sales presence to capitalise on opportunities as well as fast track customer adoption & transaction volumes and for administration and general working capital purposes. At the end of FY19, the company reported revenue amounting to A$1.37 million, reflecting a rise of 99% on YoY basis. As per the 2019 annual report, software revenue of the company is primarily generated by the provisioning of software subscription and related services including, but not limited to, Yojee SaaS software, PCS, set-up services as well as software customisation.


Financial Performance (Source: Company Reports)

Top 10 Shareholders: The following table provides a broader overview of the top 10 shareholders in Yojee Limited:

Top 10 Shareholders (Source: Thomson Reuters)

Decent Growth in Margins. Current ratio of the company stood at 5.35x in FY19 as compared to the industry median of 1.75x. This reflects that the company is in a decent position to address its short-term obligation as compared to the broader industry. An Asset to equity ratio of the company stood at 1.08x in FY19 against the industry median of 1.52x. During FY15-FY19, the company reported a respectable improvement in its EBITDA, operating and net margin.


Key Metrics (Source: Thomson Reuters)

Performance in Q1 FY20: Yojee Limited has ended Q1 FY 2020 with more than A$1,200,000 in contracted revenue from existing agreements, which are recognisable over the upcoming 24 months. The company has continued to validate the capability of its 2.0 technology infrastructure with the growth of new key customer and transaction numbers during the quarter ended 30^th September 2019, apart from the deployment of its software to the existing customers and growing its sales pipeline of global key accounts. The cash receipts of the company stood at A$156,000, which reflects a decline as compared to the prior quarter. This decrease was primarily because of timing issues, which pushed payments into December quarter. The reduction in cash receipts was also due to the transitioning to improved monthly recurring revenue over the projects and a reduction in required software customisation because of the maturity of the platform.

Also, the company has inked 14 new commercial customer SaaS agreement, which includes Giga Maritime Group, which happens to be a national bulk leader in Malaysia moving over 250,000 vehicles per annum up from 10 in the previous quarter. As per the key personnel of the company, September 2019 quarter has been a period where it executed against its objectives of increased key customer numbers, on-time and high-quality delivery to the global top 10 logistics client, Geodis, and rapid deployments to customers such as Giga Maritime Group. The company would continue to focus towards executing on its core MRR growth, delivery of strengthened financial results while, at the same time, increasing the connectivity and efficiency with the wider logistics ecosystem.

Cross-border Logistics Software Gaining Traction: The company, with the help of a release dated 9^th December 2019, notified the market that its unique and transformative cross-border software targeting the Asia Belt and Road initiative has been live, and the multiple logistics hubs in focus regions of Singapore, Malaysia and Thailand, have been laying foundation into rest of Asia.

The company added that Singapore, Malaysia and Thailand have addressable logistics market revenue amounting to A$1.2 billion annually, which is based on 2,000,000 registered trucks at USD$35 per vehicle per month. The company is well-placed with its platform software solution. Barriers to entry for the other in-region solution providers consist of their inability to support required data structures for the customs as well as waybill compliance, along with the inability to plan and track throughout multiple logistics hubs trips and carriers.

Yojee’s World Class Technology Capability: YOJ has been developing advanced capabilities around multi-level data management, which are capable of multi-leg and cross-border freight in September 2019 quarter. It was also mentioned that the technology allows efficient planning and interaction with order management, customs and warehouse systems, and significantly improved customer experience. Moreover, the technology reduces the existing practice of manual double entry processing and associated errors. Notably, the platform has been built around proprietary technology along with trade secrets. The platform of Yojee provides the benefits like 1) End to end tracking, 2) Multi-carrier visibility, 3) Multi-hub & cross-border connectivity, 4) Seamless first mile – long haul – last mile, 5) Customs system integrations, 4) Cost reductions in administration, and 5) Cost savings through enhanced planning and optimisation.

A Look at Send Yojee Business: Send Yojee happens to be a standalone business offering of the company in Singapore, which is primarily used as a technology test bed. During September 2019 quarter, this business offering has continued to entice clients who are looking for a viable solution to cater to increased freight network volumes. In Singapore, Send Yojee has reported 4,456 deliveries on the platform by YOJ and its downstream partners.

The business continues to partner with some of Singapore’s leading retailers through an Omni-Channel retail strategy. Data analytics and pricing algorithms have been used by the company to dramatically improve the profit margins per delivery as well as gross revenue, which are presenting the merits of a data lead logistics operation.

What to Expect: YOJ is serving clients in four key countries. The company’s discussion with potential clients is in progress in various other Southeast Asia nations. The company is also expecting an advanced sales pipeline throughout multiple global leaders. It was also mentioned that the launch of the omni-channel program with other clients has reached advanced stages. The company is targeting growth primarily via organic means, digital means, and by partnerships. The following picture gives a broader idea of the outlook of the company:


Outlook (Source: Company Reports)

The company recently wrapped up the capital raising, and there are expectations that the proceeds would be utilized towards further building out the Asia Pacific and international marketplaces. YOJ would also use the funds to improve its leadership in the smart technologies of the company like artificial intelligence as well as logistics network interconnectivity.


Key Valuation Metrics (Source: Thomson Reuters)

Stock Recommendation: As per ASX, the stock of YOJ is trading towards 52-week lower levels of $0.49, proffering a decent opportunity for accumulation. The financial year 2019 has proven to be a year of strong growth and innovation. During the year, the company has released its version two platform, which takes the company to the leading edge of the industry. The company currently possesses an agile, intelligent platform, which is fit for companies of all sizes. It continues to deploy towards technology and provide market-leading innovations throughout network and subcontractor management, artificial intelligence all the way through to the customer-led improvements. Hence, considering the above-stated facts and current trading levels, we give a “Speculative Buy” recommendation on the stock at the current price of A$0.054 per share (up 5.882% on 20 December 2019).

 
YOJ Daily Technical Chart (Source: Thomson Reuters)

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