Xurpas Stock Market Report by UTrade Unicapital Securities

A year after Xurpas (X) debuted on the Philippine Stock Market, the company has grown strong and continued to expand with more investments and acquisitions. The only consumer technology company listed in the PSE has come a long way from its humble beginnings, acquiring eight companies since it listed. Just this October, SGV Foundation awarded Xurpas CEO Nix Nolledo as Entrepreneur of the Year for 2015.

Here are 5 Notes From Unicapital’s Stock Report on Xurpas:

1H 2015 net income growth slowed further to 10.3%; 2Q earnings was flat but top-line growth accelerated. Revenues for 1H 2015 amounted to Php312.0m, a 64.5% growth from previous year’s Php189.6m while net income growth further slowed down to 10%, from Php104.8m to Php115.6m due to higher expenses as a result of its expansion and acquisitions. As a result, net income margin dropped to 37% compared to previous year’s 55%. However, we note that X’s top-line growth accelerated in 2Q to 75.8%, much faster than 1Q 2015’s 52.4% revenue growth, bringing 1H revenue growth to 64.5%.

Invests Php44.6m for a 4.5% ownership of Quick.ly. Xurpas recently bought a 4.5% stake in an American startup named Quick.ly, Inc. which amounts to US$1m or about Php44.6m. Quick.ly was recently founded in 2015 and is an operating company of Idealab. It specializes in making internet searching easier. This forms part of X’s strategy to expand in companies with innovative products.

Foray into e-commerce yet to be seen. Xurpas’ 51% acquisition in HR- tech firm Storm Flex Systems marks its venture into e-commerce. Results from this investment are yet to be seen but growth potential is high once the platform begins to gain traction due to its easily scalable nature. As of 2014, Storm has 15,000 clients and has earned Php45m in revenues. Currently, it is serving 30,000 heads.

Recent acquisition of Yondu, Inc. to boost mobile content business. X bought a 51% stake in Yondu, Inc., Globe Telecom’s subsidiary which develops and provides mobile content and business technology services, for Php900m. The acquisition will boost X’s existing businesses as it increases its foothold given Yondu’s client scope. X also plans Yondu to be a regional arm for digital content distribution and other technology-driven services. As of 2014, Yondu booked Php854m in revenues with a profit of Php251m.

Invests in Singapore-based Eiinsights Pte Ltd. X will purchase convertible promissory notes in Eiinsights for USD 500,000 which gives X the option to be paid the principal amount with a 3% annual interest or convert the note into equity at a 40% discount. Eiinsights caters to enterprise clients with its business analytics product offering.