MyDeal: Nov GTV +192%

About the author:

Author name:

By Josephine (Jo) Little

Job title:

Senior Analyst

Date posted:

04 December 2020, 4:00 PM

Sectors Covered:

Consumer Discretionary (Retail)

• The recent strength of MyDeal's (ASX:MYD) GTV (gross transaction value) growth momentum continued, with Nov GTV +192%.
• Active customers reached 780k (+236% yoy; +100k vs 1Q21) while 53% of all November transactions were from repeat customers (49% at 1Q21-end).
• The marketplace take-rate is in line with the FY20 average and private label sales reached A$1.2m in November alone (A$14m run-rate).
• While Nov/Dec are the seasonally strongest months for MYD, we see this update as lending upside to our current forecasts.
• We recently initiated on MYD with an Add rating and updated price target (login to view updated price target). These are unchanged with this report.

Strong GTV momentum continues

MYD has provided a strong trading update for Oct/Nov with GTV at A$48m for the two months (A$18m/A$30m in Oct/Nov).

Nov GTV of A$30m represented 192% growth. If we annualise the first five months, this implies ~A$240-250m of GTV vs our current forecast of A$226m.

Active customer numbers continue to grow, with the company now at 779k active customers (+16% on 1Q21 and +236% yoy).

The number of orders from new customers rose by 27%. MYD also saw growth in its repeat customer metrics, with 53% of all November transactions recorded from repeat customers (vs 49.7% in 1Q21).

Private label tracking ahead; early days

Private label sales levels are tracking ahead of our expectations, with A$1.2m of sales in November (A$14m annualised run-rate).

The group has around 200 SKUs on offer for Duke Living currently (A$2m) and this will ramp up over the course of the next 12 months.

We understand that the marketplace take-rate is consistent with FY20 (in line with our assumptions) while private label GMs are in the target range of 30-40%.

The launch of iOS and Android apps are on track for 2H21 release (mobile comprises 70% of traffic). The loyalty program is also on track for rollout next year.

Upside to our GTV forecasts

We have left our recently set forecasts unchanged at this stage, but acknowledge this update lends upside to our forecasts.

Given the strong seasonality of Nov/Dec, we are keen to see the performance of early 2H21 before shifting any assumptions.

MYD achieved A$105m of GTV in the first 5 months. November (A$30m) is the strongest seasonal month for the group. If we assume December GTV of A$25m, it equates to 1H21 GTV of A$130m.

At this stage we think the group is on track for FY12 GTV of cA$240- 250m, vs our forecast of A$226m.

MYD will continue to invest heavily in customer acquisition/marketing to grow market share and management indicated this step up is in line with previous indications (>10% of GTV).

Add maintained

Another strong update from MYD which is tracking ahead of our forecasts and all key metrics pointing in the right direction.

We think the private label and app launches can move the dial in terms of GTV/revenue growth, conversion/repeat order rates and brand awareness in coming periods. Add maintained; (login to view updated price target).

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