WiseTech Global Ltd (ASX: WTC)

Innovative Investment and upgradation of the Guidance: The Group updated the FY18 Guidance of revenue growth of 37% to 43% and range of $210m to $220m, subject to currency movements. Almost 230 products were upgrades and $34.3 million of investment was made in 1HFY18. It made considerable development pipeline of initiatives, with focus on Universal engines, on Machine learning, natural language processing and on Productivity and visibility tools. Existing customer’s revenue grew by $13 million in 1H18 (vs 1H17) and provided 81% of organic revenue growth in 1H18. License transition from OTL got completed. Global rollouts were progressing well and the ones which got completed were moving to productivity gains. It has set mid and long-term targets across Asia, Europe and South America.


Revenue Growth Trend (Source: Company Reports)

Its’ seamless entry into new markets with industry experts, local leadership, quality customer base and local infrastructure and offices proved to be very positive and lead to a reduction in risk that is known as entry cost. It integrates product immediately and embeds new product over time by utilising Universal Customs Engine. 1H18 was dominated by acquisitions focusing on expanding TAM in the ocean, air, land transport, warehousing and data provision. Over 3,000 products were upgraded and added to the global platform over last 5 years. The Group has committed to an investment of more than $65 million in innovation and development in FY18.


FY18 Guidance vs FY17 (Source: Company Reports)

It expects an organic revenue growth for FY18 and a continuous expansion of its global business. It will continue to execute its potent growth strategy throughout FY18, driving innovation and global expansion and transforming its operations. It expects Revenue ($220 million) and EBITDA ($75 million) in FY18 up by 43 per cent and by 39 per cent respectively as compared to FY17. This guidance includes retention of existing customers with organic usage growth consistent with historical levels with new customer growth consistent with historical levels but does not include any potential acquisitions and changes in the mix of invoicing currencies. The stock price has been up in the last one year by 65.59 per cent followed by 35% fall in last three months. However, WTC rose by 5.3 per cent on 1 May 2018 after the enhancement of the guidance. The stock still looks “Expensive” at the current market price of $10.57, and can be watched for a dip in price going forward.

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