You Thought That XOX Isn’t a Fundamentally Strong Stock?
Think Again…
You Thought That its Recent Business Developments Don’t Mean Much?
Think Again…
About XOX
XOX is the Largest mobile network virtual operator (MNVO) in Malaysia. Therefore, it does not own any infrastructure such as a radio spectrum but rides on the network platform of Celcom Axiata Bhd.
Key Distinct Feature of XOX mobile plan.
1) It enables ALL unused data to be carried forward
Historical Facts and Figures
June 2014, XOX = 246,000 subscribers
January 2017, XOX = 1,700,000 subscribers
%Increase in Subscribers = +691%
FY2014 Revenue = RM56.796 Million
FY2017 Revenue = RM191.604 Million
%Increase in Revenue = +337.35%
Growth Prospects
Beneficiary of Digital Free Trade Zone (DFTZ). Development of MPEX system that enables every XOX user to be an e commerce merchant. This enables interconnected ability with both local and international payment gateways. Therefore, XOX will be a huge beneficiary of the rising growth of e commerce.
Collaboration with PT Inovasi Telematika Nusantara and Pengurus Besar Nahdlatul Ulama (PBNU), for the development of a mobile application using its Voopee solution for 10 years. NU mobile application will offer SIM-less mobile services and a platform to engage various other services like government, banking, education and e-wallet for PBNU users. This will be promoted into Indonesia’s market and to be served as the platform to provide information, e-services and e-commerce platform.
PBNU is the largest independent Islamic organisation in the world with 94 million members.
Regional Expansion plans of Voopee which was funded by Macquarie, share issuance and private placements which raised millions.
Regional expansion to include Singapore, the Philippines and Thailand over the next three years by deploying its Voopee solution.
Malaysia And Existing Business
Development of the MPEX system would allow XOX users to take part in the digital economy.
XOX targets 2 million users for its core business.
XOX will transform into a multi-media platform company where sales of content such as music, concerts, live event feeds will eventually replace sales of SIM cards and airtime
Malaysia’s e-wallet system is expected to launch in 2018.
Leading in terms of innovation, even against the major telco players.
Barring any unforeseen circumstances, which include competitive pressure and uncertain economic environment, the Board of Directors is of the view that the Group expects to post positive results for the quarters ahead.
Indonesia’s Unbanked Population
According to the International Finance Corporation, (2016) only 20%-25% of Indonesia’s 255 million population have a bank account.
That means about 191- 204 million people in Indonesia are Unbanked.
However, an estimated 85% of the total population owns a mobile phone
There is even 325 million mobile phone subscriptions registered in Indonesia.
Micro Businesses contributes up to 90% of Indonesia’s workforce and most of them are UNBANKED.
This means that digital financial solutions can reach a much larger segment of the population if delivered through mobile devices.
How Big and Influential Is PBNU?
It recently launched a mutual fund worth a Trillion IDR in 2016. ( *XOX is Shariah Compliant )
It owns thousands of schools, offices, hospitals, branches etc etc.
Its exact assets and valuations are huge.
What does all of this mean for XOX and you?
Indonesia
XOX Media said NU Mobile is aimed at providing a secure, convenient and fast option to serve more Indonesians, especially the UNBANKED population. Through PBNU and its 94 million members, XOX and its partners could potentially be creating the largest financial electronic platform in Indonesia.
The launch of the NU Mobile application comes at a time when the Indonesian mobile payment market is expected to record a CAGR of 72.3% during 2017-2021. (TheEdge, 2017)
McKinsey reported that the digital economy is expected to contribute USD$150BILLION annually to the Indonesia economy by 2025.
Digital market = USD $150 billion
Indonesia’s Population (2017) = 260 million
PBNU Members = 94 million
Estimated Potential Market Share = 94 million / 260 million = 36.15% = USD$54.225 Billion
Obviously, things can’t turn out as estimated and therefore, Greentrade$ conservatively forecasts that XOX and its partners are capable enough to capture just 10% of the total estimates which is worth USD$5.422Billion.
“XOX has invested in increasing the usage and capability of the Voopee solution. We are delighted that through this collaboration with PT Inovasi and Nahdlatul Ulama, our technology can help more people partake in the digital economy,” said Datuk Eddie Chai. (TheEdge, Nov 20, 2017)
Comparisons And Valuations Of E Wallets And E Payments In Indonesia
April 2017, Grab acquires E payment startup, Kudo for USD 100 million
May 2017, Tencent invested USD1.2billion in Go Pay for development of E Payments
August 2017, Tokopedia recently raised USD 1.1 billion to expand the functionality of its E- wallet beyond its own platform.
E Payments in Indonesia is growing at a phenomenal rate and now, we have the direct opportunity to invest in it.
Technical Analysis
Technically, XOX has been on consolidation for 2 years. Therefore, it has been supported at the 0.10- 0.12 level despite weak market conditions. A significant breakout from that range with strong volume would unlock the true value of XOX. It seems like the Christmas Tree has been set up and the shares trading at 0.11 are the presents.
Summary
Risk To Reward Ratio is amazing.
Ambitious strategies and strong partnerships would mean exciting prospects ahead.
Digital innovations in the ASEAN region have huge potentials.
Recent business developments prove that XOX is aggressively capturing meaningful opportunities.
In 2015, XOX surged to 0.70 for no fundamental reasons.
You Thought That Was High?
Think Again…
Trade at your own risk.
The Author of this article WILL NOT be held responsible for any losses or decisions made.
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