It's a solid result - revenue, visitors, transactions, repeat and new buyers are up. It's about scale and market share (look at ebay, alibaba and VIPSHOP history)
Management team is clever....Whilst $5.2 million one off supplier payment creates short term cash-flow pain (unexpected), but in light of low share price and growth phase it's a good approach.
We need to understand what it gives to IBY:
1) Lower cost in future through better business terms. If the business growing at the current rate each quarter, say 5-10% reduction in unit cost will provide significant savings over a long term (it's about sustainable business model and cost advantage as the business is scaling up)
2) New products (as they offer more products, they get more revenue and create competition between vendors)
I think the new technology platform will be the game changer...they will be able to manage inventories/demand across multiple countries much better (drive down costs through consolidated inventory management), better management of customer lifecycle and data analytics (this is how google, ebay became so successful).
We should see solid results from next quarter and the stock will re-rated.
JT
E88 Price at posting:
19.0¢ Sentiment: Buy Disclosure: Held
