Aim-traded Bango (BGO:125p), a provider of a state-of-the-art mobile payment platform enabling smartphone users to charge purchases made in app stores straight to their mobile phone account, has signed a significant, multi-year platform agreement with a major global telecoms provider.
This is quite some endorsement of Bango’s technology and it could be the first of many. That’s because demand for streaming services has surged during the global lockdown and major telecom operators are trying to capitalise on this trend by delivering a wide range of third-party products and services such as Netflix and Amazon Prime, and then market them effectively to their customers in a most efficient and cost effective way.
Under the three-year agreement, the telecoms provider will deliver a range of third-party products and services to its customers through the Bango Platform and will also benefit from Bango data insights to optimize the targeting of product offers. The award is worth at least £1.5m to Bango, and there is a further opportunity to earn additional revenues by upscaling the offering.
It’s not the only endorsement of Bango’s technology as South Korean big data business NHN Corp invested £6.5m last month into the UK company’s Audiens data platform business, and has purchased a 4.7 per cent shareholding in Bango, too. The aim is for Audiens to become a global data leader, through a technologically sophisticated, but easy-to-use customer data platform, which enables brands to plan, execute and analyse their online marketing activities. The investment also gives NHN a new channel to reach global customers beyond South Korea and enables Audiens to bring new products to market more quickly. It’s a win, win situation.
Bango’s shares have risen 81 per cent since I last suggested buying them, at 69p (‘Three buying opportunities’, 18 March 2020), and the latest awards add considerable substance to forecasts of a sustained move into profits this year, and beyond. I maintain my view that Bango could be making £10m of annualised cash profit on revenue of £20m within the next few years, a level of profitability that a market capitalisation of £93m simply fails to reflect. Ahead of further likely contract awards, I am upgrading my target price from 150p to 200p. Strong buy.
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