Upgrading on guidance
YPB Group (YPB) combines patented anti-counterfeiting technology with security packaging solutions, consulting and forensic services to help businesses protect their brands from the risks of counterfeiting and product diversion. The company recently completed a A$4.54m share placement and provided guidance to the market for FY17 profit before tax of A$5m. We have incorporated this guidance and the effect of the share placement into our forecasts, resulting in a 24% upgrade to our FY17e PBT to A$5.4m. Our DCF valuation is A$0.43/share (A$0.44 previously) following the upgrade and after incorporating the additional 18.91m shares in issue.
10 Jun 16
Raises A$4.5m via an institutional placement
YPB Group (YPB) has completed an institutional placement of 18.75m shares at A$0.24/share raising A$4.5m. The placement was oversubscribed and brought six new institutions to the register. The company plans to use the net proceeds to accelerate conversion of its business opportunity pipeline into recurring revenues, expand into new markets and enhance its solutions suite through R&D investment. The placement follows an announcement by YPB last week that it expected to breakeven by Q117 and deliver a pre-tax profit of A$5m for FY17.
24 May 16
FY17 PBT guidance of A$5m
YPB Group (YPB) combines patented anti-counterfeiting technology with security packaging solutions, consulting and forensic services to help businesses protect their brands from the risk of counterfeiting and product diversion. YPB has announced that it expects to reach cash flow break-even by end Q117 and to deliver profit before tax of A$5m for the year ending 31 December 2017. This is the first time the company has given guidance for FY17 and follows a spate of successful contracts for the group, the latest being a memorandum of understanding to supply its technology to global packaging group Orora. YPB’s guidance is 16% ahead of Edison’s FY17 PBT forecast.
19 May 16
Connecting in the Americas
YPB Group has secured a three-year contract to provide its invisible supply chain authentication solution to a major US casual footwear brand, with its tracer technology set to be incorporated in 70% of the brand’s entire production. The contract, believed to be with Crocs, is the second major transaction secured by YPB in the Americas this quarter. It follows further support for YPB’s product in China with Beijing Sandun Card Technology choosing YPB’s anti-counterfeit technology for security passes for the People’s Procuratorate of Beijing Municipality. Our DCF valuation is A$0.44/share, having incorporated the recently completed A$7.8m capital raise.
30 Mar 16
Connecting to protect and detect
YPB Group has completed the acquisition of privately-held proximity marketing company nTouch for A$4.5m in shares at 35c/share. The acquisition extends its anti-counterfeiting expertise in B2C and positions it as one of the only companies globally to offer end-to-end counterfeit protection solutions. We have incorporated nTouch into our forecasts and included some recent contract wins. This has resulted in both an upgrade to our CY15e and CY16e forecasts and an increase in our DCF valuation to A$0.50/share from A$0.37/share previously.
12 Nov 15
Detecting and protecting its future
YPB Group (YPB) is in the early stages of commercialising its patented, non-destructible, anti-counterfeiting technology used for brand protection and product authentication. YPB raised A$3.7m at IPO (A$0.20 per share) and a further A$6.3m (A$0.30 per share) by way of placements. The company has three contracts expected to generate total revenue of CN¥318m (A$66m) over four and a half years. Our DCF valuation of A$0.37 per share assumes that the current contracts are rolled over. Further value should be created through contract wins (A$0.08 per share for every $10m of additional revenue) and profitable growth in operations.
15 Jul 15