Ann: Investor Presentation - March 2023, page-76

Valuation
In our initiation report, published 24 January, we valued the company at
$41.8m base case and $63.1m bull case, equating to 5.8c per share and 8.8c
per share at the number of shares on issue at the time. Since our initiation
report, there have been several developments that require our model to be
updated. In particular:
- ChatGPT-driven conversational AI features have begun to be
developed to be added into the program. This will improve the
software efficiency, both on the end user side and will remove friction
related to onboarding of new users.
- There have been new sales and marketing initiatives including new
hires.
- Investor awareness of UNT and the conversational AI opportunity
generally has increased as evidenced by the 91% increase in UNT’s
market capitalisation from A$16.6m to A$31.7m at the market close
yesterday.
- The company’s shares on issue have increased as a result of the
capital raising.
Our new valuation of the company is $70.2m base case and $108.7m bull
case, equating to 8.2c per share and 12.7c per share respectively (Figure 4 on
page 10). We have reduced marketing costs as a share of revenue and have
upgraded our assumptions as to the total number of mass subscribers as well
as the growth in the average number of licenses. Our base and bull cases have
different growth assumptions. Our base case predicts 280 mass enterprise
Our new valuation of the
company is $70.2m base case
and $108.7m bull case,
equating to 8.2c per share
and 12.7c per share
respectively.
Unith Limited
Readers should be aware that Pitt Street Research Pty Ltd has been engaged and paid by the company covered in this report for ongoing
research coverage. Please refer to the final page of this report for the General Advice Warning, disclaimer, and full disclosures. 10
clients by FY28 with 3% growth in the average number of licenses and revenue
per license. Our bull case predicts 330 mass enterprise clients by FY28 with
4% growth in the average number of licenses and revenue per license. We
have reduced our WACC to 14%. We have reduced the equity risk premium
from 9% to 7%, given that part of our basis for using the former figure was a
lack of investor understanding about the sector. We have, however, increased
our risk free rate of return from 3.6% to 3.8% in line with the increase in the
Australian 10-year government bond.
Last month’s capital raising, increasing the company’s shares on issue by over
100m, has reduced the final share price from what it otherwise would be.
But for the capital raising, our implied price would be 9.8c in the base case and
15.1c in the bull case.