SINGAPORE (June 28): CGS-CIMB Securities is maintaining its “add” call on data analytics-driven e-commerce firm Y Ventures Group, with a target price of 62 cents.
This came on the back of the group yesterday announcing that it has entered into a three-year distributor agreement with Beast Kingdom Co. to act as the official online distributor for Disney products in Southeast Asia.
See: Y Ventures inks agreement to distribute official Disney products in Southeast Asia
Y Ventures will see its online stores stocked with official merchandise, including figurines, novelties and stationery from Disney, Marvel, Star Wards and Pixar.
The group aims to become the largest online retailer of official Disney products in the region.
Apart from this, the group will also be providing data analytics to augment product selection, optimise online marketing and ensure end-to-end delivery and after-sales support.
In a Wednesday report, analyst Colin Tan says, “The tie-up with a major Disney licensee is a testament to the fact that Y Venture’s data analytic capabilities can appeal to global consumer brands, and its ability to partner with them to expand sales of their merchandise across online marketplaces.”
Following this agreement, the group does not expect any significant deviation from its FY17 gross margin of about 41.6% from the future Disney merchandise across online marketplaces in the region.
“We estimate 40% gross margin for the group in our forecast period,” adds Tan.
Currently, the group is trading at 21.2 times FY19 earnings, representing about 57% discount to global peers’ average of 49.1 times.
As at 11.00am, shares in Y Ventures are trading 4 cents higher at 48 cents, with a FY19 dividend yield of 1.14%.