Boku — Currency moves mask underlying growth

Boku (AIM: BOKU)

Currency in GBP

Last close As at 02/02/2023

GBP1.48

−3.50 (−2.31%)

Market capitalisation

GBP439m

Research: TMT

Boku — Currency moves mask underlying growth

While currency headwinds reduced growth on a reported basis in H122, Boku expects to report constant currency growth of 14% for total payment volume (TPV) and 7% for Payment revenue. Local payment methods (LPMs) are seeing rapid adoption and are making up a growing proportion of volumes (up 11x y-o-y) and monthly active users (MAUs – up 8x y-o-y). On revised forecasts which reflect the stronger dollar, the stock trades at a large discount to peers. We expect this gap to close as LPMs start to make a material contribution to revenue growth.

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

Boku

Currency moves mask underlying growth

H122 trading update

Software and comp services

27 July 2022

Price

88.5p

Market cap

£265m

$1.20:£1

Net cash ($m) at end H122

67.8

Shares in issue

299.0m

Free float

93%

Code

BOKU

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(17.7)

(28.6)

(53.2)

Rel (local)

(18.9)

(27.4)

(53.3)

52-week high/low

208p

98p

Business description

Boku operates a billing platform that connects merchants with mobile network operators and alternative payment methods in more than 90 countries. It has c 350 employees, with its main offices in the US, UK, Estonia, Germany and India.

Next events

H122 results

September 2022

Analyst

Katherine Thompson

+44 (0)20 3077 5730

Boku is a research client of Edison Investment Research Limited

While currency headwinds reduced growth on a reported basis in H122, Boku expects to report constant currency growth of 14% for total payment volume (TPV) and 7% for Payment revenue. Local payment methods (LPMs) are seeing rapid adoption and are making up a growing proportion of volumes (up 11x y-o-y) and monthly active users (MAUs – up 8x y-o-y). On revised forecasts which reflect the stronger dollar, the stock trades at a large discount to peers. We expect this gap to close as LPMs start to make a material contribution to revenue growth.

Year
end

Revenue ($m)

EBITDA*
($m)

Diluted EPS*
(c)

DPS
(c)

P/E
(x)

EV/EBITDA
(x)

12/20

56.4

15.3

3.2

0.0

33.1

15.5

12/21

69.2

20.0

3.9

0.0

27.5

11.8

12/22e

62.5

19.7

4.0

0.0

26.8

12.0

12/23e

69.6

22.7

4.4

0.0

24.0

10.4

Note: *EBITDA and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. FY20/21 include Identity business (sold in Q122).

Stronger dollar creates currency headwinds

Boku expects to report H122 revenue of at least $30.3m, down 1% versus H121 Payments revenue, but 7% higher on a constant currency basis. The dollar has strengthened significantly against the main currencies in which Boku generates revenue, providing a significant headwind in H122 and we also expect in H222. We also note that Boku benefited from a COVID boost in Q121. While natural hedging partially mitigated the top-line drop through to profitability, H122 EBITDA of $9.5m (H121: $11.1m) includes a $2m negative currency impact. We have revised our forecasts to reflect the stronger dollar in FY22, resulting in a 7.5% cut to revenue and a 10.5% cut to EBITDA, although the effect is much lower at the normalised operating profit and EPS level, down 2.3% and 2.4% respectively.

Rapid adoption of local payment methods

Local payment methods (eWallets and real-time payments) are growing contributors to volumes (up 11x y-o-y) and MAUs (up 8x y-o-y), making up 4.5% of MAUs in June and 10.8% of new users in H122. These methods give merchants access to customers in regions where Boku’s direct carrier billing may not be available or where these alternative methods of payment are more popular. These payment methods have the added benefit of widening the addressable market of goods that can be paid for beyond digital content.

Valuation: Large discount to peers

Down 46% year to date, Boku is trading on EV/EBITDA multiples of 12.0x FY22e and 10.4x FY23e, at a c 50% discount to the payment processing peer averages (which are down on average 24% year to date). Applying the average multiple for FY22e would imply a share price of 172.6p and 146.5p for FY23e. In our view, evidence that strong revenue growth can be sustained will be the main catalyst for the share price, with a growing contribution from local payment methods and new major merchants signing up key indicators.

H122 trading update

Exhibit 1: Summary of H122 trading update metrics

H122

H121*

Growth y-o-y

Growth constant currency

Total payment volume (TPV)

$4.4bn

$4.0bn

10%

14%

Revenue

At least $30.3m

$30.7m

-1%

7%

EBITDA

$9.5m

$11.1m

-14%

4%

Monthly active users (MAU)

46.3m

37.9m

22%

N/A

New users

28.8m

N/A

Local payment methods (LPM):

MAUs

>2.1m

0.23m

800%

New users

3.1m

0.44m

600%

LPM MAU/total MAU

4.5%

0.6%

LPM new users/total new users

10.8%

N/A

Take rate

0.69%

0.77%

Source: Boku, Edison Investment Research *Payments business only (Identity business sold in Q122)

Currency moves mask underlying performance

Boku expects to report revenue of at least $30.3m for H122, 1% lower than Payments revenue reported in H121. While Boku reports in US dollars, the vast majority of its revenues are generated in other currencies. Asian currencies (most significantly Japanese yen, Taiwanese dollar and Korean won) make up more than half of revenues, followed by euro (c 15%) and sterling (c 7%). In H122, the US dollar strengthened by roughly 10% against these currencies and for H222, the effect is likely to be even more pronounced. The company has calculated that on a constant currency basis, revenue was 7% higher year-on-year. We note that H121 was always going to be a tough comparison period as the company benefited from a boost in Q121 due to another COVID lockdown.

TPV for H122 was $4.4bn, representing 10% growth on a reported basis and 14% on a constant currency basis. We estimate that the take rate declined from 0.77% in H121 to 0.69% in H122 due to to the mix of settlement versus transaction volumes.

Boku expects to report H122 EBITDA of $9.5m compared to $11.1m for Payments in H121. While there is some natural hedging for costs in the UK and Europe, a material proportion of costs are generated in the US and India, resulting in a currency headwind of $2m in the period.

As a reminder, the Identity business was sold in March 2022 for total proceeds of $32.3m ($26.2m cash upfront and $6.1m cash deferred for up to 18 months). The company expects to report a net profit on disposal of $24.0m ($26.8m profit on disposal less related costs of $2.8m). For H122, Boku expects to report group profit before tax (PBT) of $29.5m, which includes the $24.0m net profit on disposal of the Identity business.

At the end of H122, Boku had cash of $67.8m and had repaid all debt. This compares to net cash of $48.8m at the end of FY21 and $40.2m at the end of H121. Average daily cash during June 2022 was $63.3m compared to $50.8m in December 2021 and $38.0m in June 2021.

Local payment methods show strong growth

Newer LPMs such as eWallets and real-time payments continue to make up a growing proportion of total payment volumes, MAUs and new users. Volumes from these payment methods increased 11 times year-on-year, MAUs eight times and new users six times compared to H121. LPM users made up 4.5% of MAUs in June 2022 compared to 0.6% in June 2021 and made up 10.8% of new users in H122. Stripping out LPM users, underlying MAUs increased 17% y-o-y.

Changes to forecasts

We have revised our forecasts to take account of the trading update and the effect of currency. With the lower share price year to date, we reduce our share-based payments estimates. We have also reduced our depreciation and amortisation forecasts to reflect the disposal of the Identity business.

While our FY22 forecast implies 2.5% revenue growth in H222 on a reported basis, we estimate this is closer to 17% growth on a constant currency basis. While a large proportion of the revenue reduction drops through to EBITDA, our normalised operating profit and EPS forecasts are less affected, as we have reduced our depreciation and amortisation forecasts.

Exhibit 2: Changes to forecasts

$'m

FY22e

FY23e

FY24e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Payment revenues

67.5

62.5

-7.5%

0.7%

74.6

69.6

-6.7%

11.4%

81.5

76.9

-5.6%

10.5%

Identity revenues

0.0

0.0

N/A

-100.0%

0.0

0.0

N/A

N/A

0.0

0.0

N/A

N/A

Total revenues

67.5

62.5

-7.5%

-9.7%

74.6

69.6

-6.7%

11.4%

81.5

76.9

-5.6%

10.5%

Gross profit

65.1

60.3

-7.5%

-5.0%

71.9

67.1

-6.7%

11.4%

78.6

74.2

-5.6%

10.5%

Gross margin

96.4%

96.4%

0.0%

4.7%

96.4%

96.4%

0.0%

0.0%

96.4%

96.4%

0.0%

0.0%

Payment EBITDA

22.0

19.7

-10.5%

-14.0%

26.2

22.7

-13.4%

15.4%

29.5

26.4

-10.5%

16.1%

Identity EBITDA

0.0

0.0

N/A

N/A

0.0

0.0

N/A

N/A

0.0

0.0

NA

N/A

Total EBITDA

22.0

19.7

-10.5%

-1.6%

26.2

22.7

-13.4%

15.4%

29.5

26.4

-10.5%

16.1%

Payment EBITDA margin

32.6%

31.5%

-1.1%

-5.4%

35.2%

32.7%

-2.5%

1.1%

36.2%

34.3%

-1.9%

1.6%

Identity EBITDA margin

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

EBITDA margin

32.6%

31.5%

-3.3%

2.6%

35.2%

32.7%

-7.2%

1.1%

36.2%

34.3%

-5.2%

1.6%

Normalised operating profit

16.1

15.7

-2.3%

1.8%

18.6

17.7

-4.8%

12.9%

22.9

20.9

-8.7%

17.8%

Normalised operating margin

23.8%

25.1%

1.3%

2.8%

25.0%

25.5%

0.5%

0.3%

28.1%

27.2%

-0.9%

1.7%

Reported operating profit

5.2

9.7

86.7%

89.0%

7.7

9.9

28.3%

2.4%

12.0

13.1

9.1%

31.7%

Reported operating margin

7.7%

15.5%

7.8%

8.1%

10.4%

14.3%

3.9%

-1.3%

14.7%

17.0%

2.3%

2.7%

Normalised PBT

15.6

15.2

-2.4%

3.8%

18.2

17.4

-4.9%

14.0%

22.5

20.5

-8.8%

18.2%

Reported PBT

4.7

9.2

95.6%

110.3%

7.4

9.6

29.8%

3.6%

11.6

12.7

9.4%

33.0%

Normalised net income

12.5

12.2

-2.4%

3.8%

14.4

13.7

-4.9%

12.6%

17.8

16.2

-8.8%

18.2%

Reported net income*

31.0

30.8

-0.5%

392.0%

6.3

8.1

29.8%

-73.7%

9.9

10.8

9.4%

33.0%

Normalised basic EPS ($)

0.042

0.041

-2.4%

2.6%

0.048

0.046

-4.9%

11.5%

0.059

0.053

-8.8%

17.0%

Normalised diluted EPS ($)

0.041

0.040

-2.4%

2.6%

0.046

0.044

-4.9%

11.5%

0.057

0.052

-8.8%

17.0%

Reported basic EPS ($)

0.104

0.104

-0.5%

386.4%

0.021

0.027

29.8%

-73.7%

0.033

0.036

9.4%

31.7%

Net debt/(cash)

(88.3)

(82.3)

-6.7%

68.6%

(115.3)

(106.6)

-7.6%

29.5%

(139.7)

(127.9)

-8.5%

20.0%

TPV ($bn)

9.20

9.06

-1.5%

10.1%

10.30

10.12

-1.7%

11.7%

11.28

11.11

-1.6%

9.7%

Take rate

0.73%

0.69%

-0.04%

-0.06%

0.72%

0.69%

-0.04%

0.00%

0.72%

0.69%

-0.03%

0.00%

Source: Edison Investment Research. Note: *Reported net income in FY22 includes contribution from discontinued operations (Identity business sold in Q122).

Exhibit 3: Financial summary

$m

2017

2018

2019

2020

2021

2022e

2023e

2024e

31-December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue*

 

 

24.4

35.3

50.1

56.4

69.2

62.5

69.6

76.9

Cost of Sales

(2.3)

(2.5)

(5.6)

(4.9)

(5.7)

(2.2)

(2.5)

(2.7)

Gross Profit

22.1

32.8

44.6

51.5

63.4

60.3

67.1

74.2

EBITDA*

 

 

(2.3)

6.3

10.7

15.3

20.0

19.7

22.7

26.4

Normalised operating profit

 

 

(4.0)

4.8

4.5

11.6

15.4

15.7

17.7

20.9

Amortisation of acquired intangibles

(1.3)

(1.3)

(1.6)

(2.2)

(2.9)

(1.8)

(1.8)

(1.8)

Exceptionals

(2.2)

(1.4)

(0.3)

(21.1)

(0.0)

0.0

0.0

0.0

Share-based payments

(1.5)

(4.6)

(6.8)

(4.9)

(7.4)

(4.2)

(6.0)

(6.0)

Reported operating profit

(9.0)

(2.4)

(4.1)

(16.7)

5.1

9.7

9.9

13.1

Net Interest

(2.4)

(0.6)

(0.4)

(0.6)

(0.7)

(0.5)

(0.4)

(0.4)

Joint ventures & associates (post tax)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

(17.1)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

(6.4)

4.3

4.1

11.0

14.7

15.2

17.4

20.5

Profit Before Tax (reported)

 

 

(28.5)

(3.0)

(1.3)

(17.3)

4.4

9.2

9.6

12.7

Reported tax

(0.1)

(1.3)

1.7

(1.5)

1.9

(1.4)

(1.4)

(1.9)

Profit After Tax (norm)

(4.8)

3.4

3.2

8.8

11.7

12.2

13.7

16.2

Profit After Tax (reported)

(28.7)

(4.3)

0.4

(18.8)

6.3

7.8

8.1

10.8

Minority interests

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

23.0

0.0

0.0

Net income (normalised)

(4.8)

3.4

3.2

8.8

11.7

12.2

13.7

16.2

Net income (reported)

(28.7)

(4.3)

0.4

(18.8)

6.3

30.8

8.1

10.8

Basic average number of shares outstanding (m)

150.3

217.1

246.8

273.8

294.0

297.4

300.4

303.4

EPS - basic normalised ($)

 

 

(0.03)

0.02

0.01

0.03

0.04

0.04

0.05

0.05

EPS - diluted normalised ($)

 

 

(0.03)

0.02

0.01

0.03

0.04

0.04

0.04

0.05

EPS - basic reported ($)

 

 

(0.19)

(0.02)

0.00

(0.07)

0.02

0.10

0.03

0.04

Dividend ($)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

42.0

44.5

42.2

12.5

22.6

(9.7)

11.4

10.5

Gross Margin (%)

90.7

92.9

88.9

91.3

91.7

96.4

96.4

96.4

EBITDA Margin (%)

(9.5)

17.9

21.3

27.1

29.0

31.5

32.7

34.3

Normalised Operating Margin

(16.5)

13.7

9.0

20.5

22.3

25.1

25.5

27.2

BALANCE SHEET

Fixed Assets

 

 

26.9

23.0

52.2

69.8

71.9

66.6

65.2

63.4

Intangible Assets

25.8

22.5

46.8

65.6

63.1

59.0

58.7

58.4

Tangible Assets

0.4

0.3

3.5

3.8

5.7

4.9

4.2

3.6

Investments & other

0.7

0.3

1.8

0.5

3.1

2.7

2.3

1.4

Current Assets

 

 

79.3

84.0

89.2

155.2

145.0

181.9

209.9

237.7

Stocks

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Debtors

59.1

51.7

53.6

92.5

82.6

93.7

97.5

104.1

Cash & cash equivalents

18.7

31.1

34.7

61.3

56.7

82.3

106.6

127.9

Other

1.4

1.3

0.9

1.4

5.8

5.8

5.8

5.8

Current Liabilities

 

 

(78.0)

(79.6)

(81.8)

(139.7)

(122.1)

(125.3)

(137.8)

(147.0)

Creditors

(75.5)

(77.4)

(78.0)

(136.8)

(119.6)

(123.9)

(136.3)

(145.5)

Tax and social security

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Short term borrowings

(2.5)

(2.2)

(2.1)

(1.4)

(1.1)

0.0

0.0

0.0

Other

(0.0)

0.0

(1.7)

(1.4)

(1.3)

(1.4)

(1.5)

(1.6)

Long Term Liabilities

 

 

(0.2)

(0.8)

(2.6)

(13.6)

(12.3)

(5.7)

(5.7)

(5.7)

Long term borrowings

(0.0)

0.0

0.0

(10.8)

(6.7)

0.0

0.0

0.0

Other long-term liabilities

(0.1)

(0.8)

(2.6)

(2.8)

(5.7)

(5.7)

(5.7)

(5.7)

Net Assets

 

 

28.0

26.6

57.0

71.8

82.4

117.5

131.6

148.4

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

28.0

26.6

57.0

71.8

82.4

117.5

131.6

148.4

CASH FLOW

Op Cash Flow before WC and tax

(2.3)

6.3

7.4

15.3

20.0

19.7

22.7

26.4

Working capital

1.0

7.2

3.0

20.1

(7.1)

(0.8)

2.5

2.6

Exceptional & other

(5.5)

0.2

(1.3)

(3.8)

(0.6)

(4.0)

0.0

0.0

Tax

0.0

(0.2)

(0.1)

(0.3)

(0.4)

(1.0)

(1.0)

(1.0)

Net operating cash flow

 

 

(6.8)

13.5

9.0

31.3

11.9

13.9

24.3

28.0

Capex

(0.3)

(0.3)

(2.1)

(3.4)

(5.8)

(4.6)

(5.2)

(5.8)

Acquisitions/disposals

0.0

(0.2)

(0.7)

(36.6)

0.0

26.2

6.1

0.0

Net interest

(0.9)

(0.6)

(0.4)

(1.0)

(0.6)

(0.4)

(0.3)

(0.3)

Equity financing

19.8

0.5

0.6

26.2

1.1

0.0

0.0

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

(1.1)

0.2

(1.5)

(2.6)

(6.1)

(0.6)

(0.6)

(0.6)

Net Cash Flow

10.6

13.1

4.857

13.8

0.5

34.5

24.3

21.3

Opening net debt/(cash)

 

 

9.9

(16.2)

(28.9)

(32.6)

(49.0)

(48.8)

(82.3)

(106.6)

FX

0.4

(0.5)

(1.1)

1.3

(0.6)

0.0

0.0

0.0

Other non-cash movements

15.1

(0.0)

(0.0)

1.2

(0.1)

(1.0)

0.0

0.0

Closing net debt/(cash)

 

 

(16.2)

(28.9)

(32.6)

(49.0)

(48.8)

(82.3)

(106.6)

(127.9)

Source: Boku, Edison Investment Research *Note: In FY19-21 includes Identity business which was sold in Q122.

General disclaimer and copyright

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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.

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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 2022 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 £60,000 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 2022 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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