Foster Stockbroking was Sole Lead Manager to the TBH initial public offering in December 2015 which raised A$6.0M. Foster Stockbroking received fees for this service.
Strong growth in all key metrics for month of April
Active users at end of April were 5,271, up from 4,247 at the end of the third quarter (March). This equates to 24% month on month growth.
Growth in active users appears to accelerating on the back of the various marketing initiatives that the Company has entered into, in particular the partnership with Fairfax regional newspapers, Australian Community Media (ACM). Our understanding is that the ACM marketing is still only in its early stages, with the digital component only kicking off in mid April.
We believe TBH also stands to organically grow market share through its unique product offering. As such we are positive on prospects for continued strong growth in active users.
Total revenue across the three revenues streams (wagering, tournaments and content) was $457k for the month, equating to annualized revenue run rate of circa $5.5m.
As we have indicated before, we believe TBH should comfortably achieve its initial target of 10,000 users by the end of 2016, which would give the Company an annualized revenue run rate of over $12m.
Wagering win rate back to target level in April
Wagering & Tournament turnover (the gross betting amount) was $3.4m for the month of April, now north of $40m on an annualized basis.
As expected, the win rate on wagering returned to the target level of circa 10% for the month, resulting in wagering and tournament revenue of $329K.
Overall, we believe TBH is well on track to reach cash break even before the end of 2016, given its exceptional user growth.
One of the most compelling stocks in the Tech space
The TBH investment case is very compelling given strong revenue and user growth on the back of its unique tournament products and integrated wagering, tournament and content offering. We see a clear, and short, path to break even. Additionally, the launch of GameBetta mid 2016 will allow TBH into the global high-growth market of eSports, providing further upside.
We reiterate our Buy recommendation for TBH and our A$0.45 price target.
TBH Price at posting:
19.5¢ Sentiment: Buy Disclosure: Held
