CICC Initiates Yeahka at OUTPERFORM with HK$98.20
Key takeaways from the report include:
Core payment services: Yeahka concentrates on offering integrated QR code payment services for small and micro merchants: 1) QR code payment: CICC expects Yeahka to achieve rapid growth in the next 5 years; 2) QR code payment services feature high-frequency and wide consumer base; 3) Yeahka’s high revenue-sharing ratio for sales agents and its strategy that targets small and micro merchants will drive rapid growth in merchant volume.
Value-added businesses: Huge room for commercialization based on its “data + scenario + traffic” business model: 1) Marketing services: CICC expects high-frequency transactions (QR code payment) and dual expansion drivers (proprietary R&D + M&A) to be the key drivers for Yeahka’s revenue and profit growth; 2) Merchant SaaS products empower small and micro merchants to improve customer stickiness. CICC sees monetization potential in the long run; 3) Yeahka’s fintech services business is expected to achieve mild growth in the short-to-mid run.
Strong internet background enables Yeahka to provide targeted services; increasing R&D investment is expected to accelerate product upgrades: 1) Yeahka’s management team possesses extensive experience in the internet sector 2) Yeahka has a solid shareholder base, which includes internet giant Tencent; 3) Its strong R&D team is expected to boost product upgrades.
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