boku 2

Payments demand drives strong finish to FY20

Boku 12 January 2021 Update
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Boku

Payments demand drives strong finish to FY20

FY20 trading update

Software & comp services

12 January 2021

Price

157p

Market cap

£452m

$1.35:£1

Net cash ($m) at end H120

60.4

Shares in issue

287.6m

Free float

89%

Code

BOKU

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

14.6

53.2

61.9

Rel (local)

9.9

34.9

77.4

52-week high/low

157p

49p

Business description

Boku operates a billing and identity verification platform that connects merchants with mobile network operators in more than 50 countries. It has c 300 employees, with its main offices in the US, UK, Estonia, Germany and India.

Next events

FY20 results

March 2021

Analyst

Katherine Thompson

+44 (0)20 3077 5730

Boku is a research client of Edison Investment Research Limited

Boku continued to see strong demand after its early December trading update, finishing the year with revenue and EBITDA ahead of consensus expectations. The Payments business was the driver of revenue upside, and lower costs in both businesses contributed further to EBITDA upside. We have revised our forecasts to reflect the strong H220 performance, upgrading FY20 normalised EPS by 15.5%. We maintain our FY21/22 forecasts as we expect the company to revert to pre-COVID-19 spending behaviour when lockdown restrictions are removed.

Year
end

Revenue ($m)

EBITDA*
($m)

Diluted EPS*
($)

DPS
($)

P/E
(x)

EV/EBITDA
(x)

12/18

35.3

6.3

0.016

0.0

136.6

88.4

12/19

50.1

7.4**

0.012

0.0

176.3

75.6

12/20e

56.3

15.0

0.029

0.0

73.3

37.4

12/21e

66.4

17.7

0.032

0.0

67.3

31.6

12/22e

77.7

21.1

0.040

0.0

52.9

26.5

Note: *EBITDA and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Excludes one-off revenue recognition.

H220 ahead of expectations

Strong demand in the Payments business continued to the end of the year, driving upside to our revenue and EBITDA forecasts. The Identity business generated revenue in line with our forecast, but lower operating expenditure resulted in a smaller than expected EBITDA loss. Boku now expects to report group revenue of at least $56.3m and EBITDA of at least $15.0m for FY20, well ahead of consensus forecasts ($55.3m and $13.0m respectively).

Upgrading FY20 estimates

We have revised our forecasts to reflect stronger revenues in the Payments business and lower costs in both businesses for FY20. Boku noted that it had 11 wallets live with 11 merchants in seven countries and, while this has not yet made a material contribution to revenues, volumes are growing strongly from a small base and this product will be the focus of investment in FY21. With good progress made in expanding the supply base, the Identity business is now focused on rolling out new contract wins from FY20. We maintain our FY21 and FY22 forecasts, assuming costs will start to go up as lockdown restrictions are removed.

Valuation: Factoring in wallet potential

The stock has gained 28% since we last wrote and is now trading at the top end of its peer group on an EV/EBITDA and P/E basis. In our view, this reflects strong payments volume growth from both new and existing merchant connections, a good performance from the recently acquired Fortumo business and anticipation of the potential upside from the wallet business.

H220 performance ahead of expectations

Boku provided a trading update in early December, at which point we upgraded our EBITDA forecasts to reflect lower costs as a result of COVID-19 restrictions. As the busy December trading period was yet to come, we did not materially upgrade revenue forecasts at that time. This update confirms trading remained strong to the end of December and gives more detail on revenue upside and further EBITDA upside by division.

The table below summarises the differences between the results the company expects to report for FY20 and our forecasts. The main upside to revenue came from better-than-expected revenues in the Boku payments business, helped by higher than forecast total processed value, as well as upside to the Fortumo business. While we estimate the Payments take rate for FY20 declined compared to FY19 (from 0.88% to 0.75%), we estimate the H2 take rate increased to 0.77% from 0.71% in H1. The company noted that the addition of Fortumo’s settlement business combined with a higher proportion of settlements business for the Boku payments business drove the half-on-half increase.

At the EBITDA level, higher revenues for Boku payments combined with lower opex in H2 (c $14.65m versus our $14.90m forecast) resulting in Boku payments EBITDA 5% ahead of our forecast. Costs in the Identity business were also lower than expected (c $2.53m vs our $3.13m forecast) resulting in a smaller EBITDA loss than expected.

The company anticipates making a goodwill impairment for the Identity business, reflecting slower growth than anticipated at the date of acquisition.

Exhibit 1: FY20 actuals per trading statement versus estimates

$m

FY20e

FY20a

diff

Revenue

Payments

50.3

≥51.1

2%

Boku

46.1

≥46.7

1%

Fortumo

4.2

≥4.4

5%

Identity

5.2

≥5.2

0%

Group revenue

55.4

≥56.3

2%

EBITDA

Payments

18.0

≥18.8

4%

Boku

16.4

≥17.3

5%

Fortumo

1.5

≥1.5

0%

Identity

(4.4)

≥(3.8)

-14%

Group EBITDA

13.5

≥15.0

11%

TPV

6.6

6.9

4%

Take rate

0.77%

0.75%

-0.02%

Source: Boku, Edison Investment Research. Note: TPV, total processed value.

Active user growth accelerated in H220

The company noted that monthly active users (MAUs) increased from 17.8m at the end of FY19 and 20.3m at the end of H120 to 28.8m at the end of the year (+42% h-o-h). The end FY20 total includes 4.6m for the Fortumo business (acquired 1 July), which implies the Boku payments business saw MAUs increase by 3.9m over H220 (+19% h-o-h), compared to a 2.5m increase in H120 (+14% h-o-h).

We believe this confirms that users who signed up during the various lockdowns around the world are continuing to use Boku’s payment services. We note that Apple reported very strong sales through its App Store in December, with customers spending $1.8bn on/in apps during the week from Christmas Eve to New Year’s Eve (+27% y-o-y) and a single-day spending record of $540m on New Year’s Day (+40% y-o-y). Third-party app analytics companies estimate consumer spending through the App Store increased c 30% in 2020.

Year-end cash balance reflects timing issues

The company reported gross cash of $62.7m at year-end (up from $35.6m at the end of 2019) and noted that it had paid down $7.6m of the $10m RCF it took out to partially fund the Fortumo acquisition. While net cash was not disclosed, on the basis of the gross cash balance we estimate it is likely to be $50–51m compared to our forecast of $18.7m. This reflects the timing of receipts and payments to and from carriers and merchants. The company noted that the average daily cash balance in December was $46.7m compared to $22.4m in December 2019.

Changes to forecasts

We have revised our forecasts to reflect the stronger than expected performance in H220, upgrading EPS by 15.5%. For FY21 and FY22, we have maintained our forecasts. FY20 benefited from a reduced cost base due to COVID-19 restrictions but we would expect spending to revert to more normal levels in FY21 and note the company referenced investing in the platform to maximise the wallet opportunity.

Exhibit 2: Changes to forecasts

$m

FY20e

FY21e

FY22e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Payment revenues

50.3

51.1

1.6%

17.5%

59.5

59.5

0.0%

16.5%

65.7

65.7

0.0%

10.3%

Adjusted Payment revenues

50.3

51.1

1.6%

27.1%

Identity revenues

5.2

5.2

0.8%

-22.1%

6.9

6.9

0.0%

32.7%

12.0

12.0

0.0%

73.9%

Total revenues

55.4

56.3

1.6%

12.3%

66.4

66.4

0.0%

18.0%

77.7

77.7

0.0%

16.9%

Total adjusted revenues

55.4

56.3

1.6%

20.1%

Gross profit

50.0

50.8

1.6%

14.0%

59.1

59.2

0.0%

16.4%

67.2

67.2

0.0%

13.5%

Gross margin

90.3%

90.3%

0.0%

1.4%

89.1%

89.1%

0.0%

-1.2%

86.5%

86.5%

0.0%

-2.6%

Payment EBITDA

17.9

18.8

4.5%

17.7%

21.3

21.3

0.0%

13.7%

23.3

23.3

0.0%

9.3%

Adjusted Payment EBITDA

17.9

18.8

4.5%

47.8%

Identity EBITDA

(4.4)

(3.8)

-13.9%

-28.0%

(3.6)

(3.6)

0.0%

-4.3%

(2.2)

(2.2)

0.0%

-39.6%

Total EBITDA

13.5

15.0

10.5%

40.3%

17.7

17.7

0.0%

18.3%

21.1

21.1

0.0%

19.4%

Payment EBITDA margin

35.7%

36.7%

1.0%

0.0%

35.9%

35.8%

0.0%

-0.9%

35.5%

35.5%

0.0%

-0.3%

Identity EBITDA margin

-85.7%

-73.2%

12.5%

6.0%

-52.8%

-52.8%

0.0%

20.4%

-18.3%

-18.3%

0.0%

34.4%

EBITDA margin

24.4%

26.6%

8.8%

5.3%

26.6%

26.6%

-0.1%

0.1%

27.2%

27.2%

0.0%

0.6%

Total adjusted EBITDA

13.5

15.0

10.5%

102.0%

Adjusted EBITDA margin

24.4%

26.6%

8.8%

10.8%

Normalised operating profit

10.0

11.4

14.3%

152.3%

13.5

13.5

-0.1%

18.5%

16.8

16.8

0.0%

24.1%

Normalised operating margin

18.0%

20.3%

2.3%

11.2%

20.4%

20.3%

0.0%

0.1%

21.6%

21.6%

0.0%

1.2%

Reported operating profit

0.5

2.0

267.7%

-321.4%

6.6

6.6

-0.1%

235.1%

10.9

10.9

0.1%

65.9%

Reported operating margin

1.0%

3.5%

2.5%

5.2%

9.9%

9.9%

0.0%

6.4%

14.0%

14.0%

0.0%

4.1%

Normalised PBT

9.2

10.6

15.5%

158.2%

12.3

12.2

-0.1%

15.5%

15.6

15.6

0.0%

27.2%

Reported PBT

(0.3)

1.2

-540.5%

N/A

5.3

5.3

-0.2%

355.9%

9.7

9.7

0.1%

83.2%

Normalised net income

7.3

8.5

15.5%

161.5%

9.8

9.8

-0.1%

15.5%

12.5

12.5

0.0%

27.2%

Reported net income

(0.3)

1.1

-455.6%

N/A

4.8

4.8

-0.2%

351.0%

8.2

8.2

0.1%

73.0%

Normalised basic EPS

0.027

0.031

15.5%

139.0%

0.034

0.034

-0.1%

8.4%

0.043

0.043

0.0%

27.2%

Normalised diluted EPS

0.025

0.029

15.5%

140.7%

0.032

0.032

-0.1%

8.9%

0.040

0.040

0.0%

27.2%

Reported basic EPS

(0.001)

0.004

-455.6%

N/A

0.017

0.017

-0.2%

323.3%

0.029

0.029

0.1%

73.0%

Net debt/(cash)

(18.7)

(50.4)

169.6%

54.4%

(35.7)

(42.7)

19.8%

-15.3%

(55.7)

(63.8)

14.5%

49.3%

TPV ($bn)

6.56

6.85

4.4%

35.6%

7.82

8.08

3.4%

16.3%

8.87

9.15

3.1%

13.1%

Take rate

0.77%

0.75%

-0.02%

-0.06%

0.76%

0.74%

-0.03%

-0.01%

0.74%

0.72%

-0.02%

-0.02%

Source: Edison Investment Research *Note adjusted revenue and EBITDA in FY19 excludes $3.3m of one-off revenue.


Exhibit 3: Financial summary

$m

2014

2015

2016

2017

2018

2019

2020e

2021e

2022e

31-December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

18.3

19.2

17.2

24.4

35.3

50.1

56.3

66.4

77.7

Cost of Sales

(4.1)

(4.0)

(3.2)

(2.3)

(2.5)

(5.6)

(5.5)

(7.3)

(10.5)

Gross Profit

14.2

15.2

14.0

22.1

32.8

44.6

50.8

59.2

67.2

EBITDA

 

 

(9.6)

(11.4)

(12.3)

(2.3)

6.3

10.7

15.0

17.7

21.1

Normalised operating profit

 

 

(9.8)

(12.4)

(13.8)

(4.0)

4.8

4.5

11.4

13.5

16.8

Amortisation of acquired intangibles

(0.8)

(1.9)

(1.7)

(1.3)

(1.3)

(1.6)

(1.7)

(1.5)

(0.4)

Exceptionals

(2.1)

(0.1)

(2.4)

(2.2)

(1.4)

(0.3)

(0.8)

0.0

0.0

Share-based payments

(1.7)

(1.8)

(2.1)

(1.5)

(4.6)

(6.8)

(7.0)

(5.5)

(5.5)

Reported operating profit

(14.4)

(16.2)

(19.9)

(9.0)

(2.4)

(4.1)

2.0

6.6

10.9

Net Interest

(0.6)

(0.4)

(1.2)

(2.4)

(0.6)

(0.4)

(0.8)

(1.3)

(1.2)

Joint ventures & associates (post tax)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

0.0

0.0

0.0

(17.1)

0.0

0.0

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

(10.4)

(12.8)

(15.0)

(6.4)

4.3

4.1

10.6

12.2

15.6

Profit Before Tax (reported)

 

 

(15.0)

(16.6)

(21.1)

(28.5)

(3.0)

(1.3)

1.2

5.3

9.7

Reported tax

(0.4)

(0.4)

0.5

(0.1)

(1.3)

1.7

(0.1)

(0.5)

(1.5)

Profit After Tax (norm)

(7.8)

(9.6)

(11.2)

(4.8)

3.4

3.2

8.5

9.8

12.5

Profit After Tax (reported)

(15.4)

(17.0)

(20.6)

(28.7)

(4.3)

0.4

1.1

4.8

8.2

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Discontinued operations

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

(7.8)

(9.6)

(11.2)

(4.8)

3.4

3.2

8.5

9.8

12.5

Net income (reported)

(15.4)

(17.0)

(20.6)

(28.7)

(4.3)

0.4

1.1

4.8

8.2

Basic ave.number of shares outstanding (m)

21.3

27.4

140.1

150.3

217.1

246.8

270.0

287.6

287.6

EPS - basic normalised ($)

 

 

(0.36)

(0.35)

(0.08)

(0.03)

0.02

0.01

0.03

0.03

0.04

EPS - diluted normalised ($)

 

 

(0.36)

(0.35)

(0.08)

(0.03)

0.02

0.01

0.03

0.03

0.04

EPS - basic reported ($)

 

 

(0.72)

(0.62)

(0.15)

(0.19)

(0.02)

0.00

0.00

0.02

0.03

Dividend ($)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

N/A

4.7

(10.4)

42.0

44.5

42.2

12.3

18.0

16.9

Gross Margin (%)

77.6

79.1

81.4

90.7

92.9

88.9

90.3

89.1

86.5

EBITDA Margin (%)

(52.5)

(59.2)

(71.4)

(9.5)

17.9

21.3

26.6

26.6

27.2

Normalised Operating Margin

(53.2)

(64.4)

(80.0)

(16.5)

13.7

9.0

20.3

20.3

21.6

BALANCE SHEET

Fixed Assets

 

 

32.7

30.8

26.8

26.9

23.0

52.2

95.6

93.8

92.0

Intangible Assets

32.5

30.1

25.7

25.8

22.5

46.8

91.2

89.8

89.5

Tangible Assets

0.2

0.7

0.5

0.4

0.3

3.5

2.1

1.1

0.1

Investments & other

0.0

0.0

0.6

0.7

0.3

1.8

2.4

2.9

2.4

Current Assets

 

 

72.5

53.0

48.9

79.3

84.0

89.2

130.8

146.1

179.7

Stocks

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Debtors

59.7

43.3

37.1

59.1

51.7

53.6

67.6

91.9

105.7

Cash & cash equivalents

12.0

9.0

11.3

18.7

31.1

34.7

62.3

53.4

73.2

Other

0.7

0.6

0.5

1.4

1.3

0.9

0.9

0.9

0.9

Current Liabilities

 

 

(69.6)

(65.5)

(61.0)

(78.0)

(79.6)

(81.8)

(125.2)

(129.7)

(149.0)

Creditors

(64.6)

(60.4)

(54.9)

(75.5)

(77.4)

(78.0)

(119.9)

(125.8)

(145.0)

Tax and social security

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Short term borrowings

(5.0)

(5.1)

(6.1)

(2.5)

(2.2)

(2.1)

(3.3)

(3.3)

(3.3)

Other

0.0

0.0

0.0

(0.0)

0.0

(1.7)

(1.9)

(0.5)

(0.6)

Long Term Liabilities

 

 

0.0

(0.3)

(15.2)

(0.2)

(0.8)

(2.6)

(9.8)

(8.5)

(7.3)

Long term borrowings

0.0

(0.2)

(15.1)

(0.0)

0.0

0.0

(8.6)

(7.3)

(6.1)

Other long term liabilities

0.0

(0.1)

(0.1)

(0.1)

(0.8)

(2.6)

(1.2)

(1.2)

(1.2)

Net Assets

 

 

35.5

18.0

(0.4)

28.0

26.6

57.0

91.4

101.7

115.4

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

35.5

18.0

(0.4)

28.0

26.6

57.0

91.4

101.7

115.4

CASH FLOW

Op Cash Flow before WC and tax

(9.6)

(11.4)

(12.3)

(2.3)

6.3

7.4

15.0

17.7

21.1

Working capital

9.3

11.6

(3.4)

1.0

7.2

3.0

27.9

(18.4)

5.4

Exceptional & other

(1.6)

1.1

4.2

(5.5)

0.2

(1.3)

(1.1)

0.0

0.0

Tax

(0.0)

(0.0)

(0.0)

0.0

(0.2)

(0.1)

(0.7)

(1.0)

(1.0)

Net operating cash flow

 

 

(1.9)

1.3

(11.5)

(6.8)

13.5

9.0

41.1

(1.7)

25.6

Capex

(1.1)

(3.6)

(1.5)

(0.3)

(0.3)

(2.1)

(2.5)

(2.7)

(2.8)

Acquisitions/disposals

5.9

0.3

0.0

0.0

(0.2)

(0.7)

(43.0)

0.0

0.0

Net interest

(0.3)

(0.3)

(0.3)

(0.9)

(0.6)

(0.4)

(0.6)

(1.2)

(1.1)

Equity financing

0.2

0.1

0.1

19.8

0.5

0.6

24.8

0.0

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

0.6

(0.0)

0.1

(1.1)

0.2

(1.5)

(1.9)

(2.1)

(0.6)

Net Cash Flow

3.3

(2.2)

(13.1)

10.6

13.1

4.857

17.8

(7.7)

21.0

Opening net debt/(cash)

 

 

(4.9)

(7.0)

(3.6)

9.9

(16.2)

(28.9)

(32.6)

(50.4)

(42.7)

FX

(1.2)

(0.8)

(0.4)

0.4

(0.5)

(1.1)

0.0

0.0

0.0

Other non-cash movements

0.0

(0.4)

(0.0)

15.1

(0.0)

(0.0)

0.0

0.0

0.0

Closing net debt/(cash)

 

 

(7.0)

(3.6)

9.9

(16.2)

(28.9)

(32.6)

(50.4)

(42.7)

(63.8)

Source: Boku, Edison Investment Research

General disclaimer and copyright

This report has been commissioned by Boku and prepared and issued by Edison, in consideration of a fee payable by Boku. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Boku and prepared and issued by Edison, in consideration of a fee payable by Boku. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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