IKT og Tech

Braastad
03.02.2021 kl 16:40 818

Sjefstrateg Peter Hermanrud i Spb1 Markets tar inn Xplora i sin anbefalte portefølje for Februar;

We rate Xplora Buy and operate with a NOK60 target price. Xplora trades at 13x 2022 P/E

1. Xplora is one of the leading smartwatch providers for kids with a Nespresso like business model.
» Watches and the inherent MVNO* subscriptions, with ~30% gross margin, represent the installed base (i.e. the Nespresso machine),
whereas the potential kicker lies in the recurring nature of the platform revenues at 60-70% gross margin (i.e. the coffee capsules).

2. We model EPS of NOK1 in 2021 and NOK2.9 in 2022.
» Indeed, with a growing installed base (sold 216k watches in 2020, up ~200% YoY), scalable value chain with significant roll-out potential
in Deutche Telecom’s existing geographical footprint (only in 4 out of 12 markets currently)and favorable revenue mix (higher share of
services revenues with 5% current), Xplora is set for years with steep growth and operationalscalability.

3. Keep in mind the seasonality, 1Q represent roughly 10% of full year revenues.
» In 2020, 24m units out of 216m, or roughly 10% was sold in 1Q. In the 4Q20 trading update, Xplora announced that it had firm orders for
delivery in 1Q21 of 51k smartwatches. This represent 112% YoY growth in # of units sold. Assuming same seasonality as last year with
1Q21 accounting for some 10% of total unit sales, we have support for our 500k units sales estimate for 2021.

4. We rate Xplora Buy with a NOK60 target price
» The Device segment account for NOK27 (12x 2022 EV/EBIT), the Services segment NOK31 (20x 2022 EV/EBIT) and net cash of NOK3.
Xplora trades at 13x our 2022e EPS.

5. Assuming mgmt. guidance, Xplora is worth north of NOK100 per share.
» Xplora trades at 2022 P/E of 13x on EBITDA estimates that are ~40% below current mgmt. guidance. We need more proof in the pudding
in order to give full credibility in the mgmt. outlook case, but if we were to model with that scenario, we see values north of NOK100.

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