HT8 - Primed For Growth, page-103

Excellent @Roarlenny. Good Evening Guys. Great session on the Q&A Call yesterday with Garrison and Alan. Some very promising and bullish commentary, and some very valuable learning for us all in the ecommerce retail world. Some key takeaways from the call, and also from recent announcement(s) and media/articles.

- EBay growth appears to be growing very strongly. Estimating about a 300% increase in the number of sales in the last 3-4mths. With the addition of higher value items, I wonder if the revenue increase is more than 300% on EBay alone in recent months. Garrison also made commentary on the fact that the company had appointed an EBay focused Resource to drive growth. eBay may very well grow to produce revenues similar to that of Amazon, which would raise company revenue by at least 50% one would think. (Revenue Growth)

- Amazon positioning continues to strengthen. I noted Garrison mentioning that Amazon approached HT8 to start the homewares vertical. This proves the partnership arrangement between the two companies. This proves that HT8 is able to source brands and products that prefer not to sell to Amazon direct. However, HT8 can do it. Very nimble indeed. I see revenue growth in this vertical also. A good example to use is Westfields want groceries in their malls. Who sources them? Coles. Without Coles, Westfields suffers a lot less shoppers who wont go and buy other goods from other retailers. New verticals such as homewares and gaming will create increased revenue. (Revenue Growth)

- Private labelling is a huge opportunity for the company. Garrison noted that products that they were able to private label would carry profit margins in the 40-50% range as it essentially cuts out the middle man. He mentioned they have started this, but at what capacity or at what stage, albeit feasibility or design, I am not sure, but it does point to significant revenue and profit growth if it comes to fruition. (Revenue & Profit Growth)

- Amazon Prime Sales record indicates that Amazon’s growth is undeniable, and HT8’s position as Number 1 seller on the platform secures HT8’s ability to take poll position from any consumer who wants to buy IT/CE products. Brilliant, as HT8 does not have to pay anything to feature in that top spot! No expensive billboard or bust stop advertising. Amazon spends on that, HT8 leverages off it. As Amazon continues to grow its market share (predicted to grow exponentially in the next 4 years), HT8 as it’s top seller is well positioned to also experience exponential growth. (Revenue Growth)

- New website is likely to attract more retail customers, alongside increase the spending habits of it’s established B2B customers. With an improved interface and UX, it appears as though the company should benefit from this. (Revenue Growth)

- Cashflow Positive strengthens the company’s balance sheet and with increased capital and cash reserves, the company can purchase more inventory, and in doing so can reduce the price it pays, meaning it can increase it’s profits. Besides the fact that this tactic increases profits, it also means that the company can save cash reserves and reduce the necessity to raise capital and hence reduce dilution in the number of shares that the company has on issue. (Revenue Growth & Profit Growth)

- Acquisitions, mergers, and expansion. The company gave some hints away here in it’s desire to expand. Whilst I do not think anything was said that indicated anything happen in the immediate near term, it appears that the company has had some level of discussion and engagement with potential targets. Achieving so would improve company revenues also. (Revenue Growth)

- The company continues to secure more warehouse space. I feel that this is a big clue of things to come. A lot of people seem to think that this business is mostly reliant on achieving it’s revenues on Amazon. For those that are not aware, products that are sold on Amazon are stored in Amazon dispatch facilities. That is, HT8 don’t have to pay for storage costs for products sold on Amazon. Besides the fact that this is highly cost effective and space effective, the company appears to be growing it’s revenues and sales on the it’s own and other ecommerce platforms, hence explaining why it continues to expand it’s warehouses. Simply put, more inventory means more revenue. (Revenue Growth).

I may share some more points on my analysis and comprehension of the company’s strategies and tactics another time. But for now, the narrative appears to point towards aggressive revenue growth. What is exciting is that ecommerce is at infancy stage in Australia. Let’s use the worlds largest company as an example in it’s most mature market. In USA, Amazon’s market share is 40% of all ecommerce. A very dominating position!

In Australia, Amazon accounts for about 3% of all ecommerce. In the last year, Amazon grew by about 60% in Australia year on year, and is predicted to reach 33% of all ecommerce sales within 10 years. My question is, if HT8 can retain it’s number 1 spot, will HT8’s revenues grow?

According to Statistica, the largest category within the next 5 years on Amazon will be electronics. HT8 looks very well positioned indeed.

Another thing to note, is that EBay accounts for about 22% of all ecommerce sales in Australia. Hence, we can see why HT8 is beginning to focus on the EBay channel. One could wonder if our EBay revenues will eclipse our Amazon revenues in the short to medium term? And then in the medium to longer term, Amazon sales to take the top spot given the strong investment and new warehouse centres they are building throughout the country?

I must say, a lot more is happening here than meets the eye. I retain my strong conviction here, and in fact, my conviction continues to strengthen as I realise the sheer force of the e-commerce sector in Australia, and the unique GROWTH STORY that HT8 appears to be so very well positioned for.

I know the daily movements can be frustrating, but if the company does execute and continue to play it’s cards well, we could very well be in for a great ride.

Meanwhile, not sure if company execs read this, but congratulations on your recent daily sales record! Keep up the good work, and nevermind the daily share price movements. The story has only just began. Hence, we call this the GROWTH STORY.

Goodnight. $tockfella.