Redchip Aug 1

Initial AirPocket Marketing Campaign Underway; Reducing Price Target to A$0.20 on Likely Near-Term Stock Price Pressure
Aug 1st
AirPocket launched in June; initial marketing campaign with Telefónica has commenced; in final negotiations with multiple partners in the U.S. and Latin America. DCC’s money and value transfer app, AirPocket, was officially launched in June throughout Latin America with its partner Telefónica for mobile recharge transactions. This launch will involve a direct marketing campaign to 230 million Telefónica mobile devices. The launch has initially only been to a small number of devices as DCC sharpens its marketing message. DCC will update the market with key statistics in September 2016. We note that the initial reviews on AirPocket have been positive, with an overall rating of 4.5/5 stars (on 4 reviews) in the Google Play store. We expect more downloads and more reviews once a more extensive marketing campaign is launched.
DCC is also in final negotiations with global telecom and remittance companies for AirPocket for payments and fund transfers. Additional partnerships would likely accelerate the reach and usage of AirPocket.
Trading activity revenue of over $16 million in 4QFY16; increase of 185% QoQ. Trading activity revenue has now grown for five consecutive months. The revenue increase was primarily due to an increase in bitcoin demand, which has driven up bitcoin prices in recent months. The trading desk has been profitable, and cash flow from this business segment should provide funds to help with the initial launch of AirPocket.
Chairman Zhenya Tsvetnenko has resigned; DCC is currently conducting a search for a new Chairman. On July 25, 2016, DCC announced that Chairman Zhenya Tsvetnenko resigned from DCC’s board of directors to focus on personal interests. According to DCC, Mr. Tsvetnenko has not held any operational responsibilities over the past year and the events that caused Mr. Tsvetnenko’s resignation do not have anything to do with DigitalX and DigitalX’s operations. DCC also stated that key strategic partnerships and new partnerships that DCC have been pursuing are unaffected by Mr. Tsvetnenko’s resignation. DCC is currently searching for a new Chairman for the Company to help further its international growth with AirPocket.
Reducing target price from A$0.65 to A$0.20. DCC continues to make strong progress with the launch of AirPocket, and significant long-term potential exists in the $2.8 trillion mobile payments market and the $600 billion global money remittance market. However, we believe that the resignation of the Chairman will likely put pressure on the stock over the near-term. We believe that the stock could regain upward momentum if positive events are announced, such as a strong Chairman hiring, positive results from DCC’s marketing campaign with Telefónica (initial results expected in Sept 2016), or the announcement of new AirPocket partnerships. Positive events would cause us to reevaluate our target price.

Make of it what you will, Im well in'