Stocks’ Details

Kogan.com Limited (ASX: KGN)

Expansion into Whitegoods & Built-In Kitchen Appliance Markets - Kogan.com Limited has built a portfolio of retail and services businesses, and has now signed many supply and logistics agreements which allowed it to enter the Australian Whitegoods and Built-In Kitchen Appliance Market with its own range of Exclusive Brand price-competitive products. Details of the offering to consumers will be released closer to the release date, which is expected to be prior to end of the calendar year 2018. The Australian Whitegoods and Built-In Kitchen Appliance market lacks competitive tension which has resulted in a limited number of players enjoying inflated margins. One major factor contributing to this lack of competition is the additional complexity and logistical requirements arising from distributing bulky products. Due to the rapid growth of the Kogan.com business over the last 12 years, the Group is now in a position where its logistics and distribution footprint enables it to enter this market and provide Australians with unprecedented value on a range of the most popular Whitegoods and Built-In Kitchen Appliances like Fridges, Washing Machines, Dryers, Dishwashers, Ovens, Cooktops and Rangehoods.


1HFY18 Gross Profit Mix (Source: Company Reports)

It will be a great win for Australian consumers who don’t want to pay too much for essential household appliances. Recently, the Group signed agreements with Vodafone New Zealand Limited (Vodafone) that will see Kogan.com offering telecommunications services in New Zealand. In Australia, Kogan Mobile has been delivering on its promise to save Aussies more of their hard-earned money, and hundreds of thousands of customers have already migrated to Kogan Mobile in Australia over the past two years. Kogan Mobile has been an enormous hit with consumers in Australia, and Vodafone New Zealand is excited to be partnering with Kogan.com to deliver more choice to mobile customers in the New Zealand market. The stock was up by 116.63 per cent in last six months and was up by 17.68 per cent in last one month. The stock climbed up by 7.45 per cent as on 4 June 2018. We believe that the stock is “Expensive” at the current market price of $ 9.8while many catalysts now appear to be factored in the run-up.
 

Bubs Australia Limited (ASX: BUB)

Mega long-term supply agreement with a China-based company -Bubs Australia, a Company engaged in the business of inspiring new generations of happy, healthy consumers through its range of Australian made premium infant nutritional and goat dairy productsannounced that the Company has entered a Supply Agreement with New Times Asia with total sales commitment for purchase orders valued at $17 million in FY19 and increasing to $24 million in FY20, and $37 million in FY21. The agreement with New Times Asia will be a major step forward in its China expansion strategy and shows the investment it has been making and continues to make in building its China presence is bearing fruit. Based on its annualised run rate of Bubs and CapriLac combined trading, the committed FY19 offtake by New Times Asia will be at least double of its total company net sales revenue. New Times Asia is a professional service provider specialising in e-commerce sales and fulfilment in China servicing all major and second tier e-commerce platforms, and already represents many leading global brands, including numerous imported infant formula and milk powder brands.


Sales Performance Geographical and Product-wise (Source: Company Reports)

Product portfolios of both Bubs and CapriLac will be supplied to New Times Asia via the cross-border channel and sold on up to 20 e-commerce platforms, including major platforms already in partnership with Bubs Australia; JD.com, Kaola.com, VIP.com, and RED, as well as new vertical platforms, such as Suning (Red Baby), Jumei, Mia, BeiBei, Baby Tree (Meitun) and MamaGo. Services provided by New Times Asia will include sales, account management, operations, fulfilment, logistics, payment, cash flow management, customer service, digital content production, promotional and marketing activities, such as Key Opinion Leader and product review campaigns. Bubs and CapriLac are very strong and trusted Australian brands. The stock was up by 446.43 per cent in one year but started falling and slipped by 9.47 per cent in last three months. The stock witnessed a recovery of 2.68 per cent in last five days and jumped up by 7.19 per cent as on 04 June 2018. The stock looks “Expensive” at the current market price of $0.82 while there are regulatory risks and the impact of the supply agreement in China.
 

Yojee Limited (ASX: YOJ)

An innovative Framework Agreement for ongoing technology - Yojee Limited, a Company engaged in the development of a logistics technology platformentered into an Innovation Framework Agreement (via its wholly owned subsidiary, Yojee Solutions Pte Ltd) with UPS Asia Group Pte Ltd (UPS) (a subsidiary of United Parcel Service, Inc.) to provide a framework to facilitate an ongoing technology collaboration. The Agreement is for a term of 12 months and fees may be derived by Yojee on any collaborations between Yojee and UPS. Under the Agreement, specific projects may be identified and project terms, such as activities, timing, locations, and project costs, will be separately agreed between Yojee and UPS on a project by project basis. Following on from Yojee’s recent successful blockchain pilot collaboration, Yojee and UPS agreed to enter into the Agreement to facilitate a broader and longer term collaboration. The intention of this overarching agreement is to enable both parties to more efficiently work together to develop, or improve, services and products for the UPS operating environment, and identify further opportunities to collaborate in areas spanning technology, software, payments and blockchain. During the March 2018 quarter, YOJ signed the partnership with Sinotrans Integrated Logistics Australia (SILA), which is a part of the Sinotrans and CSC international network, China’s largest shipping and logistics company. As of now, it’s difficult to say whether this Agreement will lead to meaningful revenues or not. The stock was declining since the start of the year and was down by 54.41 per cent and by 13.89 per cent in last three months. As blockchain technology is at a growing stage and a lot of regulatory compliances are in progress, we give a “Speculative Buy” recommendation at the current market price of $0.155.

 
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