SHO 10.8% 4.1¢ sportshero limited

The next multibagger - a bright future for SHO in Indonesia

  1. 15 Posts.
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    Hello friends, today I'd like to share my details for a bull case for SportsHero. Here are the current details:

    Share Price: 0.035c
    Market Cap: ~$13 million
    CEO is a top 10 shareholder, with the top 20 holding 58% of shares.


    • Sports prediction/news/content/streaming/gamification app, very scalable, includes web platform and is cloud based.
    • Focus is Olahbola app in Indonesia which launched in July and has generated 1 million users as of October, with 500,000 within the first 60 days. They are aiming to reach 1.5 million users by December.
    • Exclusive multi-year partnership with Indonesian Football Federation.
    • Exclusive sponsorship rights in Indonesia with LaLiga, Spain's top football league.
    • USA market is valued due to its high population and economy, but Indonesia has the fourth highest population after USA's third with rapidly increasing digital uptake in Indonesia.
    • $9 million invested in R&D, so even if they continue to make 0 revenue, they can't drop much lower due to the value of the technology - sky is the limit.
    • Valued very low because they are yet to generate revenue with Olahbola, with the last quarterly reporting $0 but have an actual pipeline in place and are set to generate revenue in this quarter in December 2020, capitalising on their rapidly growing userbase and already secured commercial deals.
    • The share price used to be a lot higher because they were using their less developed product in a much more saturated markets where gambling was also already legalised, allowing them a lot less engagement. I class this Indonesia development as an entirely new business.
    • Brand collaboration with Nivea and Tokopedia - which is Indonesia's largest e-commerce platform, basically their Amazon.- 3 year revenue generating deal with MolaTV, which is basically Indonesia's Foxtel/TV network/Netflix which includes live sports.
    • Very very cheap valuation compared to any of its peers on the ASX, with what seems to be none/low competition in Indonesia.

    And that's not even including the following speculative juicy future potential prospects and catalysts:
    • Their platform is white-label, meaning it can be expanded to any other languages or sports, or other companies looking to make their own version of the platform, meaning they could start receiving SaaS revenue streams.
    • In 2012, Indonesia made changes to legislation in order to outlaw online gambling because of so much money being spent betting on the Euro 2012 football championship. Regardless, a report by PWC purports that the gambling industry in Asia will grow to $80 billion over the next few years, but cultural and religious barriers need to be overcome. The market is definitely there for it in Indonesia, but if SportsHero can soft loophole this or secure a licence if legislation changes, they would be very well positioned to take advantage of it. They already seem to be approaching skirting around the edges of this with users being able to compete in competitions to win prizes and participate in giveaways.

    Financial position:
    • Just completed ~$1.4mil heavily oversubscribed placement, with an instituional investor subscribing for an additional $450,000.
    • Up to $5 mil financing facilty over three years, so funding won't be an issue for a while.

    Happy to discuss any feedback on this DD or any information that might be wrong.
    Last edited by porkberry: 16/11/20
 
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