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#Broker/Analyst Views
stale
Last edited 3 years ago

March 2021:  Euroz Hartleys: Yojee (YOJ): Speculative Buy: Dec’Q Update

Analyst: Seth Lizee - Associate Research Analyst, +61 8 9488 1414

Target Price: $0.50/sh, Recommendation: Speculative Buy

Dec’Q Update

Investment case

YOJ recently provided an update on its December quarter. We remain pleased with the company’s progress on rollouts in addition to receiving its first expansion order from an existing client during the Q. Revenue and volumes growth (%QoQ) were broadly flat as a result of recent rollouts occurring in the final weeks of the Q, in addition to unprecedented weather events and COVID-19 lockdowns occurring in the Philippines which was the only live enterprise country during the Q. Notwithstanding, going forward we look towards significant transaction volume growth in coming quarters from recent and coming rollouts. In parallel, YOJ continues to provide commentary on a strong pipeline of additional opportunities to expand existing agreements (as has recently occurred last month) and sign potentially new ones all together. The business remains well funded for growth, boasting a solid balance sheet.

The Global logistics industry accounts for +US$9 trillion annually, parcel movements alone are forecasted to surpass 100 billion this year and double to 200 billion by 2025. Industry wide changes are creating new demands and issues driving rapid increases in digitisation. YOJs comprehensive cloud based logistics SaaS platform is well placed to solve these issues. YOJs recent agreements show growing demand for the platform, securing agreements with three major global logistics companies who have $100 billion in combined revenues. The YOJ investment case is predicated on the rollout of its logistics platform with Geodis, Kuehne+Nagel, and Maersk’s in parallel to signing new SaaS agreements, thereby growing revenue scale through rapidly increasing market share.

We Maintain our Speculative Buy recommendation and $0.50/sh. Price Target.

Key points

  • The company continued to make strong operational progress during the Q
    • 3 Enterprise countries went live into billing phase during the Q (single client), transactional billing to commence post Q end
    • YOJ received expansion order for Indonesia during Q
  • A further 4 Enterprise countries (2 clients) are moving close to ‘Go-live’
  • YOJ finished the Q with a total of 8 signed enterprise clients, 4 of which are live and transacting
  • 1.25m ‘planned deliveries’ during the Q
    • Recent ‘Go-lives’ only occurred in the final weeks of the Q, hence as anticipated a bulk of volumes are likely to have originated from the Philippines
    • YOJ further notes volumes during the Q were impacted by unprecedented weather events and COVID-19 related lockdowns during the period, especially within the Philippines
    • YOJ however notes it is expected that online business will offer promotions and aggressively market into early CY’21 to make up for the lower than anticipated volumes
  • Financial Highlights:
    • $235k cash receipts
    • $204k revenue
  • YOJ finished the Dec’Q with $21.1m cash providing the company a strong run-way for growth
  • We maintain our Speculative Buy recommendation with a $0.50/sh. Price Target.

Yojee Ltd - Year End: 30 June

  • Share Price: 0.15 A$/sh (0.135 on 01-Apr-2021)
  • Price Target: 0.50 A$/sh
  • Valuation: 0.50 A$/sh
  • Shares on issue: 1143m, diluted
  • Market Capitalisation: 171.5 A$m
  • Enterprise ValueL 147.4 A$m
  • Debt: 0.0 A$m
  • Unpaid cap: 3.0 A$m
  • Cash: 21.1 A$m
  • Turnover: 3 sh/day [assume they mean 3m ?]
  • 12 Mth Hi-Lo: 0.29-0.012 A$/sh

Click on the link above for the full report, or open the attachment below.

View Attachment

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#Bull Case
stale
Last edited 3 years ago

Yojee signs another global top 10 logistic group:

 

Yojee Signs 4th Global Top 10 Logistics Group

HIGHLIGHTS

? Yojee signs CEVA Logistics in Singapore on a multiyear agreement

? The first logistics hub deployment in Singapore is expected to be live in August

? Supports the provision and usage of Yojee’s software and network capabilities nationwide

Yojee announced that it has signed agreements with CEVA Logistics Singapore Pte Ltd, to deliver its solutions, in Singapore. The agreements support the provision for, and usage of, Yojee's leading network capabilities for domestic logistics nationwide. Implementation of Yojee’s solutions is planned to commence in August. The agreements are for an initial term of 2 years. Yojee's charges are broadly in line with the fee structure presented in the Investor Presentation dated 8 July 2021. CEVA Logistics, a world leader in third-party logistics, provides and operates transportation and supply-chain solutions for large- or medium-size national and global companies. CEVA Logistics offers a broad range of services in both Contract Logistics and Freight Management thanks to its approximately 78,000 employees and 1,000 facilities in more than 160 countries. CEVA Logistics is part of the CMA CGM Group, a world leader in shipping.

The more logistics groups Yojee adds, the stronger their network effect becomes. I belive this is strengthened even furter given it is focused on the Asian region where road-rail-ship freight is more difficult to track and trace. 

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#Q2 Activity Report
stale
Last edited 2 years ago

Q2 Activity Report and 4C


?Hub Expansion Strategy on Track

Highlights:

  • Enterprise customers and hubs expand, validating Company’s strategy and exponential revenue growth capacity with revenue up 58% on prior quarter to AU$531k (up 160% same quarter prior year), Cash Receipts up 56% on prior quarter to $346k
  • Success with Container and Pallet hub strategy which results in higher revenue per transaction and expansion into Europe; key drivers in quarter where recurring type revenue being the main contributor to results
  • 11 live hubs (3 hubs going live late in reporting quarter not yet contributing meaningfully to revenue), further 3 under implementation plus advanced discussions for further hubs across all 4 enterprise clients
  • Strong cash runway (AU$15.4m) to support hub development, along with the promising ‘Smart Connected Warehouse’ product in beta phase places the Company in an exceptional position for further growth across coming quarters and in the longer term


Yojee noted Q2 FY2022 Revenue of AU$531k - implying a ARR of AU$2.12m. The Dec quarter represents a YoY growth of 160% and a 58% increase on the prior quarter (Q1 FY22). 14 Hubs are now live, which is 14% of their planned 126 hubs. Transactional volume was down from 680,000 'planned deliveries' in Q1 to 366,139, which they attribute to "movement types and patterns" - this is something I'd like to investigate more.

Overall reasonable announcement, nothing to blow your socks off; growth is large yes, but coming off a small base, this growth will 'slow' as more hubs are implemented so will be interesting to see how the market reacts to this, as I believe this is factored into thir current price. Hub implementation is something I'll keep an eye on in the lead up to their annual.

Full announcement here.

Disc: Held.

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#Strawman Meeting notes
stale
Added 2 years ago

Yojee has really flown under my radar, but having spoken with the MD I must confess my interest is piqued.

At first glance, you have a cash burning business, being sustained via repeat capital raises, using terms like AI and Blockchain and generating a measly $1-2m in revenue -- and trading on market at (at best) 30x sales! It also came about via a reverse listing after a gold prospecting company decided on a pivot... It also seems to share a few things in common with GetSwift.

So, yeah, a few red flags.

On closer inspection, though, that seems like a fairly unfair characterisation.

The logistics market is highly fragmented, especially outside of the US, with a lot of separate entities responsible for delivering your package from producer to your door. It's a very complex chain, and the well known names (Wisetech, DHL, SAP etc) tend to operate within specific areas. Yojee focuses at the intersection of enterprise forwarding, last mile delivery and 3rd party tracking. Here they are the only player of scale and are used by 4 of the 10 largest 3rd party logistics provides (soon to be 5 by the sounds of it)

The company is very much focused on the SE Asian market -- an area responsible for 50% of the world's logistics. In terms of their tech, they plan to broaden more into an IoT (internet of things) offering, but outside of that want to remain focused on their existing niche. They have no ambition to move into the US, with Ed saying they have the potential to be a multi-billion company even if they just win in this region.

They seem to have spent a good deal of time on refining the offering, and the focus going forward will be ramping up sales and marketing (likely a growth in headcount of 4-6 people). Implementation for their offering has been reduced to weeks, where it was previously months.

Ed talked a bit about network effects, which I think could be significant. The more operators using the platform, the more valuable it is -- especially as there are marketplace features (eg i could add my two truck delivery company to the platform). I think having some big name partners also helps a lot.

A key value prop is that it allows users to invoice and get paid sooner, as well as streamlining operations and improving efficiencies.

They have a very small base of revenue, but are regularly posting 100%+ rates of growth YoY at each quarter. I expect cash burn to remain around $5m or so per annum, especially with an increased S&M spend, but at least they have a decent cash balance and they should be able to avoid another raise for another couple years (excluding any major spend or acquisition).

Like I said, 30x sales is waaay up there. Especially in this market. But the company is still at the very start of ramping up and these metrics can be deceptive when you're growing from a tiny base.

Honestly, with a $60m market cap, as I said in the chat, a takeover doesn't seem off the cards. As Ed said, this seemed to be hinted in the AFR recently. (not that you'd invest on that basis!!!)

I don't have shares, and as a matter of principle I don't buy within a few weeks either side of a Strawman meeting, but i'll add it to my watchlist. If they can sustain high rates of sales growth, win some big contracts with significant players, manage costs and cash burn well, then it really does the potential to be a much larger business in the years ahead.

Keen to hear what others think.

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#ASX Announcements
stale
Added 2 years ago

Missed this last week.

Yojee signs two year contract with Hawk Logistics a Refrigeration haulage company delivering out of NSW, Brisbane and South Australia.

A 2-year agreement has been signed with Hawk providing access to Yojee’s Platform and includes a minimum monthly spend. In addition, a variable fee is charged based upon the number goods movements. Hawk can opt out in line with Yojees standard terms.

Yojee-Signs-Agreement-with-Hawk-Logistics-in-Australia.PDF

https://www.hawklogistics.com.au

Disc hold IRL and SM

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#Financials
stale
Last edited one year ago

My observations from the Sep 2022 4C.

  • Cash burn up to 2.7m over last four quarters of 1.7-2m. Main variation from the last few quarters is "admin/corporate costs" and "indirect taxes."
  • Sales and revenue growth steady, but not super impressive growth.
  • 8m cash in the bank, so 3-4 quarters left.


I'm watching the next 4C with keen interest. If the growth trajectory doesn't resume and the cash burn doesn't reduce, I'm out. Market not impressed so far.

Disc: Held.


d4d70b9fb29de89cba3c84ef198fb391650c54.png

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Valuation of $0.200
stale
Added 3 years ago
30% increase in revenue from ordinary activities, two quarters of consecutive increases. No debt and $18.4 million in cash in the bank. Stock carries risk, however, has a price target of upto $0.50 with brokers.
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