50% user growth in less than 3 months, now up to 1.5 million users. Signing revenue generating contracts is a nice development as well at this stage in the company.
MySqaur was actually the first thing that drew me to YNB and I since found out about all the rest of their investments! MySquar is really interesting in my view as its the largest local-language social media website in one of the fast growing countries in south east asia. If the product can cement its place as the goto social media network in Myanmar things will get very interesting.
MySQUAR, the Myanmar-language social media and entertainment platform whose principal activity is to design, develop and commercialise Myanmar-focused internet-based mobile applications, this morning announced that it has today entered into a service agreement with MyPAY Limited, (‘MyPAY’), a provider of mobile payment transaction services.
The agreement with MyPAY is for the integration of MyPAY’s mobile payment services as a feature of MyCHAT, MySQUAR’s free to use, mobile messaging and social networking application. Under the 5-year agreement with MyPAY, MySQUAR will receive US$500,000 in software platform integration fees from MyPAY and then an ongoing 50 percent share of net fees collected from MyCHAT users who make transactions through the mobile payment features integrated in MyCHAT. The service agreement entered into by MySQUAR with MyPAY constitutes a related party transaction under the AIM Rules as Eric Schaer, Chief Executive Officer of MySQUAR, holds an indirect controlling interest in MyPAY.
Furtherto this, the Group announced that total user accounts as at 14 October 2015 surpassed 1,500,000, this represents an increase of approximately 50 percent in total user accounts since 30 June, as announced on 22 July 2015.
Our view: Back in July, MySQUAR confirmed that user numbers – the principal basis of valuation for any social media operator – were surging dramatically beyond expectations, with account breaching the 1.0m marker for the first time. This morning, the Group confirmed that by 14th October this figure had surpassed 1.5m, meaning total unique users had risen by 50% in less than three months.
Quite clearly, the compounding effect experienced by the most successful social media operators, as their sites start to gain national recognition and the branding wins ‘go-to’ status, appears to be being achieved. Indeed, this now makes Beaufort’s already substantially raised year-end 2015 target of 1.9m now appear quite prudent (see detailed projections detailed overleaf) and, realistically, suggests that the 4.0m figure (the level at which acquisitive US sector giants usually express an interest in international virgin territories), could well be surpassed early in 2017. Having now also added the mobile payment services, MyPay, to MyCHAT’s portfolio of features – a very natural ‘next step’ – the platform is increasingly able to satisfy all user requirements. Being integrated on a rev-share basis, as a trusted operator MySQUAR is capturing a potentially significant and growing, long-term monetisation opportunity.
As Myanmar’s unique, local language social media operator, MySQUAR appears to be more than delivering on its promises. This is something that is unlikely to have been missed by the numerous global operators determined to rapidly ensnare local players that have successfully participated in an online user ‘landgrab’. In this respect, MySQUAR now appears quite dramatically undervalued; Beaufort sets a price target of 21.0p/share and repeats its Speculative Buy recommendations.
Beaufort Securities acts as corporate broker to MySQUAR plc [Source: *.co.uk]
YNB Price at posting:
15.0¢ Sentiment: None Disclosure: Held
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