Research Coverage on BIG by Red Leaf Securities - Speculative Buy
Sydney, Dec 16, 2016 AEST (ABN Newswire) - Big Un Limited (
ASX:BIG) (BIG or the Company) is pleased to announce that Red Leaf Securities an Australian brokerage and research house has issued a Research Report on the Company.
The research report contains the commentary and views of the researcher based on information available in the public domain on the Company. The Company is not aware of any other recent research notes.
To view a copy of the report please click on "Red Leaf Research Report" at:
http://www.abnnewswire.net/lnk/XWIZ07H6
Big Un Limited (BIG) offers a compelling product offering at a fraction of the cost of traditional media advertising. BIG's core asset of Big Review TV, is an affordable products and services mobile marketing platform that allows SMEs to produce and edit digital videos and individual users to generate video content. It is essentially a video review platform providing online video reviews. For SMEs, Big Review TV assist with B2B marketing as a low cost video producer and online marketing service. For consumers, Big Review TV provides an ecosystem whereby individuals can search places and events and see video reviews made by other individuals who contribute video reviews via the "Big Review TV" video app. BIG estimates that via this method of advertising, its offering is at a compelling 25% of the expense incurred with traditional media (inclusive of advertising advisory).
We like BIG for the following reasons:
1) Significant growth in mobile advertising. The global advertising industry is currently a US$480.9 billion industry with internet advertising comprising ~US$170.1 billion of 35.5% of the industry. Whilst other advertising segments such as print (magazines and newspapers) are in structural decline, advertising via the internet is expected to grow to ~US$261.7 billion or 54.4% of the industry total by 2020.
2) First mover advantage and highly scalable product offering. With the business model proven in Australia, BIG is well positioned to scale its offering by replicating its model across other regions via leveraging its technology platform.
3) Significant demand for BIG's subscription based products. BIG's sales pipeline continues to grow strongly, with potential orders currently at ~20,000 and paying subscribers currently at ~2,200. Of the ~20,000 in the pipeline, BIG is currently experiencing ~30% conversion rate from customers in the pipeline to paying subscribers.
4) At the cusp of profitability... During FY 2016, BIG reported sales revenue of $2.36 million, or +257% over FY 2015 of $0.66 million driven by video content sales in Australian. BIG's membership grew by +125% to 18,000 members as of June 2016. In FY16, BIG showed a strong funding position and operational cash flow performance, with $3.8 million in cash as at 30 June 2016 and $4.07 million in cash receipts from customers, a 466% increase on FY 2015.
The Company is well positioned to continue to progress growth initiatives, in Australia and overseas, such as customer acquisition. With BIG's core platform technology underpinning Big Review TV now operational and its associated mobile application has been developed, BIG is well placed and at the cusp of profitability. We have assumed that the business will be cash generative from FY17 onwards (as guided by management) subject to further acquisitions and heightened efforts to increase subscribers.
- Valuation. BIG generates revenue by providing a video production and edition services to SMEs (vendors). Vendors subscribe to a 12-month membership. BIG's core platform technology underpinning Big Review TV is operational and its associated mobile application has been developed. We value BIG using a blended - DCF and sales comparable approach, which gives us an equity value of A$0.45 per share. We recommend BIG as a speculative BUY.
About Red Leaf Securities
Red Leaf Securities research identifies opportunities in the small to medium-cap companies whilst providing access to independent ETF and Listed Investment Company research.
To view the Research Report, please visit:
http://abnnewswire.net/lnk/H9INUE0P
About Big Un Ltd
Big Un Ltd (ASX:BIG) is the parent company of Big Review TV Ltd. Big Review TV are innovative disruptors in the online video space delivering subscription based video technology products and services. The Company has operations across Australia and in New Zealand, the United Kingdom and the United States, Hong Kong, Singapore and Vancouver and was listed on the ASX in December 2014.
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