WEYL: Zacks Initiation Report - Asian DIY App Maker Expanding Geographically
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Today we are initiating coverage of Weyland Tech Inc (WEYL). Weyland markets a “do-it-yourself” mobile app creation platform as SaaS in Singapore. It is rolling out its product to a number of geographies primarily in Asia (where there is less competition) through new joint ventures and marketing partnerships. The business was purchased on September 1, 2015 and the financials of the new company have been reported as of that date. Q1 2016 was the second full quarter of this new business and as such historical results should be ignored. The marketing expansion, with penetration of a huge new TAM, should afford the company high growth this year and going forward. The CreateApp platform is now offered in twelve languages: English, Chinese, Japanese, Korean, Bahasa Malay, Bahasa Indonesia, Thai, Hindi, Vietnamese, Spanish, French, and Italian.
The company has extremely high margins and cash flow due to its structure as a SaaS company that has primarily outsourced its marketing and sales, has its primary development behind it and has very low overhead.
The Company uplisted to the OTC Markets Group’s ‘OTCQB Market’ on June 13, 2016 which should improve the stock’s marketability, but currently float is under a million shares.
With expected revenues and EPS in 2016 of $13.2 million versus $2.5 million in 2015, and diluted EPS of $0.56 versus breakeven in 2015. We believe the stock is worth almost $9.00 per share based on a blend of an industry average EV to sales of 3.6X, PE to Growth rate of 1 and 30% growth and EV to EBITDA of ten times.
