FYI | May 24 2019
By Pitt Street Research
Health & Fitness vertical presents near-term growth opportunity
MyFiziq ltd ((MYQ)), a Perth-based technology and service company, offers a patented technology that allows users to track their body shape and dimensions while performing everyday activities.
The growing adoption of smartphone apps and mHealth across varied verticals is driving the use of this technology. Currently, MyFiziq targets four verticals. Health & fitness, as well as medical & insurance sectors, are key near-term opportunities. Corporate wellness and the apparel market are likely to create long-term growth opportunities.
By the end of 2018, two-thirds of adults across the globe are expected to own smartphones and are likely to account for 73% of internet consumption. This trend is expected to have a strong impact on the adoption of MyFiziq technology.
The growth potential of all the business segments that MyFiziq targets is immensely high. Moreover, the adoption of apps that allow tracking of body shapes and dimensions is on the rise across these segments. We believe that MyFiziq’s strategy to focus on these verticals is the best way to realise its potential.
Valuation range of $0.91–1.08 per share
We value the company using DCF approach between $0.91-1.08 per share based on base case and optimistic case assumptions, respectively. MyFiziq will derive revenue from Licencing & Development (L&D) fees and subscription revenue targeting B2B client channels.
We have followed a conservative approach in assuming number of B2B clients signed during the fiscal year and consumer base per B2B client, across four verticals.
There could be a potential upside in revenue subject to MyFiziq finalisation of the WeChat transaction currently underway and the immense potential of the China market, which is not accounted for in forecasts due to limited clarity on the deal progress.
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