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Ann: 9 Spokes Video Interview-9SP.AX, page-11

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25/07/16

14:41

Post #: 18359705
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Originally posted by NightWatchman ↑

Foster note from this morning.

25 July 2016

9 Spokes (9SP, $0.13, Mkt Cap $52m) - The Global App Store for SMEs, Targeting the Holy Grail of "Big Data" Analytics – BUY – PT $0.47.

Event:

We initiate coverage on 9 Spokes International Ltd (9SP), with a BUY recommendation and price target of $0.47/share.

Investment Highlights:

9SP recently listed on the ASX via an IPO, raising $25m. The company recommends the world’s best cloud-based business software applications for SMEs and integrates them into a smart dashboard, revealing key information on the performance of SME operations.

An app store for global SMEs. The platform provides scalability, significant operating leverage and a quicker path to profitability, through multiple channels, globally.

With a c.20% revenue margin on apps, the platform enables an uplift to revenue for minimal (if any) incremental cost. Today, most SMEs utilise 3 cloud based apps, anticipated to increase to 7 in coming years.

9SP has signed major channel partners including Barclays, Deloitte and Suncorp (all live from Q316E with $325k in minimum monthly revenue). In Barclays alone, if a 20% margin on 7 cloud based apps were to be achieved for up to 420k SME clients, this would represent c.$210m revenue opportunity.

Big data analytics: 9SP provides a description of an SME on a “live” basis. Non-sensitive client data from the apps can be consolidated to form benchmarking data, displayed through widgets on the dashboard. Once a ‘tipping point’ is reached, 9SP has effectively built a ‘real time’ tool for an SME, with extremely localized or global data, based on characteristics, on a second-by-second basis (i.e. weather impacts on sales locally).

Recommendation:

We initiate on 9SP with a BUY recommendation and 12-month price target of $0.47/share. Our valuation is based on the low-end of the range for all contracts, except Barclays. With Barclays, we have modelled a 10% penetration of installed SME client base, utilizing 3 apps generating $0.30/per share. This valuation methodology is conservative given it does not assign any value to new contracts or its direct channel, 9spokes.com.

Well-funded post recent IPO: 9SP has a clear runway to attack the market opportunity with a net cash position of $25m & yet 30% cheaper due to market volatility. This creates an opportunity for savvy investors.

Catalysts for the share price include: Catalysts for the stock includes: 1) end-user customer adoption, 2) additional channels in existing jurisdictions; and 3) additional channels in new

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Nice one, have you got the rest to share?

And I thought I'd post this here for easier access for those that didn't bother past reading the ann.
9SP Price at posting: 13.0¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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Ann: 9 Spokes Video Interview-9SP.AX, page-11

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