You can download Ralph Garcea’s 11-page Company Report by clicking on the following link: KUU FMG Research Jul 24 2019
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On July 24, 2019, Ralph Garcea of Focus Merchant Group (FMG), formerly the Tech Analyst at Echelon Wealth Partners, issued a research report on Kuuhubb Inc. (“Kuuhubb”; TSXV: KUU; OTCPK: BCDMF).
Headquartered in Helsinki, Finland, Kuuhuub is a mobile game development and publishing company that caters to the female demographic through games such as Recolor, the #3 coloring application on mobile.
Kuuhuub believes the female market is underserved in gaming, and that it can develop or find games to acquire that would be a quickly growing platform for this niche group.
Purpose of the Report: The purpose of Mr. Garcea’s report is to take a deep dive into the mobile app industry to understand the level of competition that is faced by the companies operating within the niche.
Upcoming Catalysts:
- Mr. Garcea believes FQ4/2019 (June) will mark the bottom in terms of quarterly revenue. With the steady release of new products, he sees a return to growth in FQ1/2020 (September) and then revenue increasing sequentially throughout F2020.
- The recent non-dilutive financing discussed in the report will provide increased marketing spend that should drive a return to growth for KUU.
Valuation:
- According to Mr. Garcea’s analysis, KUU is trading at a significant discount to its peers – both Global/Nordic gaming and global social apps.
- Global and Nordic gaming apps are trading at 2019 EV/Sales of 5.0x/3.0x – valuing KUU in the C$0.75-1.25 range.
- Comparable global social apps are trading on average (excl. FB) at a multiple of US$67/MAU – valuing KUU in the C$4-5 range.
KUU is currently trading at C$0.60 with a market cap of C$33.4 million.
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You can download Ralph Garcea’s 11-page Company Report by clicking on the following link: KUU FMG Research Jul 24 2019
