Our latest Investing Matters Podcast episode with QuotedData's Edward Marten has just been released. Listen here.
Agreed - sorry if it wasn't clear below the valuation was of 'investments excluding royalties' [i.e. the KML project].
You could either value KML at cost (~£3m), implied value at last capital raise (~£5m - May 2019 valuation), value based on recent transaction (i.e. the MOD/Tshukudu transaction at ~£2100/km2 which would give a value of ~£9m), a convoluted DCF based on expected volumes/prices etc. etc.
I don't think cost is the most reasonable basis to value it on.
My main point was that KML is a key unknown and a key driver in potential valuation upside from here.
Excluded KML as view it as essentially the 'royalty' - including the KML 2% royalty and the uncapped US$2M royalty.
Agree the uncapped 2% NSR is the key value driver. Which we don't have a market value on.. yet...
I get a value of £23m of investments excluding royalties. This being £22.2m of public equities (including GGL), £0.5m of private investments (at cost, largely Pan Asia Metals; Thailand and Logrosan written off), £0m of options (all out of money?).
The remainder of the value could be attributed to:
- Net debt (incl cash) (was ~-£0.5m at 31 Dec 2019 (cash, bank debt etc)).
- Value of royalties (..... key question - Simon Thompson (IC) has a valuation based on MOD transaction).
Bonitas Research published a short report on PETS this morning. They have put a target of -75% on the share price due to undisclosed loans held in JVs and manipulation of profit.
Full report available here: https://www.bonitasresearch.com/company/pets-home-group-london-pets/
Bonitas was founded by one of the founders of Glaucus Research (see 'The China Hustle' on Netflix). Has had a lot of success in Australia with Blue Sky Funds (insolvent), Quintis (insolvent). Has a strong track record in Asia as well with Best World Intl (suspended on HKX).
Do your own research - but management should respond in the coming days.
DYOR.
Sorry Sonic80, didn't see your update post just arrive. I am in 100% agreement that management statistics will be much better and more reliable than what I (or anyone else) can find online independently.
My intention with the online statistics was to be used to understand how the brands are tracking ahead of any announcements and ultimately give a view to valuation of the business. For instance we could look at the VTRND brand; revenue is driven by advertising which is a function of engagement rate, driven by number of followers (public info), look at engagement rate (public info estimates) and monetisation rate (can use market estimates). Then look across the platforms the brand operates (FaceBook, Instagram [monetisation to come], TikTok [monetisation to come]) to understand the revenue potential of VTRND.
Thanks - appreciate the constructive discussion.
The 0.25% I quoted below for 2019 is across all FaceBook properties and is NOT representative of BBSN properties.
The 0.44% engagement rate for Hook Group Instagram cannot be compared to FaceBook engagement rates as is a different platform. You can verify these numbers online: https://kicksta.co/instagram-engagement-calculator and google search to find what a 'good' engagement rate is.
The RNS is very useful in understanding the great growth BBSN has seen recently. Monetisation is a function of engagement rates (engagement / total views) [see more here = https://sproutsocial.com/glossary/engagement-rate/). Most web advertising is based on engagement (ie clicks) - such as Google AdWords, FaceBook Advertising etc.
The RNS does show that views are increasing (i.e "the number of video views over 1 minute increased by 351%") and engagement is increasing (i.e. "engagement including viewers reacting, commenting on or sharing content increased by 136%."). However it does suggest that engagement rate (engagement/total views) is growing, but perhaps not in the direction as one would expect from headline stats.
Am very impressed by the business and the growth this year, just trying to understand, where the business could go (to the moon?)!
Has anyone looked into the underlying quality of The Hook audience? Lower engagement = Low monetisation
For instance on their Instagram profile:
0.44% engagement rate (this is poor - potentially bot/fake followers?)
Declining number of followers (virtually no net-add days in last six months).
You can confirm this with any social media analytics tool - IGBlade, HypeAuditor etc. Both of these have free trials.
And then in terms of their existing brands (i.e VTRND, Yellow Teeth etc), does anyone have a view of their leading brands?
I ran a quick report (using socialinsider.io) on these two facebook pages:
- VTRND: Engagement rate per post of 0.003% for last month (this is low and trending lower by 5% pcp).
- Canvas: Engagement rate per post of 0.055% for last month (this is low and trending lower by 9% pcp).
Engagement rates for Facebook videos were about 0.25% in early 2019 (see socialmediatoday.com)
If you are to browse the FaceBook pages of these brands you can see these engagement figures do not appear unreasonable.
Am I missing something? Still digesting the RNS today.