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Boku — Fully focused on payments

Boku (AIM: BOKU)

Currency in GBP

Last close As at 22/09/2023

GBP1.46

▲ −1.00 (−0.68%)

Market capitalisation

GBP434m

More on this equity

Research: TMT

Boku — Fully focused on payments

Boku expects to report FY21 results in line with our expectations despite currency headwinds, with revenue growth of 22% and EBITDA growth of 31% y-o-y. The company has also agreed to sell its loss-making Identity business for $32.3m in cash to focus on the opportunity in its Payments business. The disposal boosts Boku’s profitability, improves the visibility of the high-margin Payments business and provides cash that can be used to invest in its mobile first (M1ST) payments network.

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

Boku

Fully focused on payments

Trading update

Software & comp services

19 January 2022

Price

168.5p

Market cap

£499m

$1.36:£1

Net cash ($m) at end FY21

54.3

Shares in issue

295.9m

Free float

93%

Code

BOKU

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

1.5

(9.2)

12.7

Rel (local)

(1.6)

(12.4)

0.4

52-week high/low

208p

140p

Business description

Boku operates a billing platform that connects merchants with mobile network operators in more than 80 countries. It has c 300 employees, with its main offices in the US, UK, Estonia, Germany and India.

Next events

FY21 results

March 2022

Analyst

Katherine Thompson

+44 (0)20 3077 5730

Boku is a research client of Edison Investment Research Limited

Boku expects to report FY21 results in line with our expectations despite currency headwinds, with revenue growth of 22% and EBITDA growth of 31% y-o-y. The company has also agreed to sell its loss-making Identity business for $32.3m in cash to focus on the opportunity in its Payments business. The disposal boosts Boku’s profitability, improves the visibility of the high-margin Payments business and provides cash that can be used to invest in its mobile first (M1ST) payments network.

Year
end

Revenue ($m)

EBITDA*
($m)

Diluted EPS*
(c)

DPS
(c)

P/E
(x)

EV/EBITDA
(x)

12/19

50.1

7.4**

1.2

0.0

190.6

79.9

12/20

56.4

15.3

3.2

0.0

71.5

38.7

12/21e

69.0

20.0

3.9

0.0

58.8

29.6

12/22e

69.0

23.5

4.3

0.0

52.9

25.2

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

FY21 traded in line with forecasts

Boku expects to report FY21 total payment volume (TPV) of $8.2bn (+18% y-o-y), revenue of c $69m (+22% y-o-y; Payments $61.9m, Identity $7.1m) and EBITDA of c $20.0m (+31% y-o-y; Payments $22.9m, Identity -$2.9m), in line with our forecasts. Real-time payment and eWallet transactions increased more than fivefold y-o-y, highlighting the potential for these payment methods to fuel revenue growth in the medium term. Management noted that gaming customers did not exhibit typical seasonality in FY21, with much higher demand in H121 versus prior years due to widespread lockdowns in Q121, resulting in flatter sequential growth in H221 than in prior years. Management expects to return to more normal revenue seasonality in FY22.

A pure-play payments business post Identity sale

Boku has agreed to sell its Identity business to Twilio for cash proceeds of $32.3m, leaving the company as a pure-play payments business. We have revised our forecasts to reflect the Identity business disposal and have assumed that the company uses some of the proceeds to ramp up investment in the Payments business. While FY22 revenue is cut by 13%, EBITDA increases by 7%, EBITDA margin increases from 28% to 34% and normalised diluted EPS increases by 11%.

Disposal simplifies valuation approach

Using FY22 forecasts to reflect the disposal of the Identity business, Boku is trading on an EV/EBITDA multiple of 25.2x, at a 15% discount compared to the payments sector average of 29.8x. Applying the average multiple would imply a share price of 195.7p. We note that payments companies specialising in simplifying complex payment transactions, such as cross-border transactions or local payment methods, command even higher valuations than the likes of Adyen (59x CY22 EBITDA) and Block (57x).

Disposal of Identity business

Boku has agreed to sell its Identity business to Twilio, a cloud communications platform, for $32.3m in cash. $26.1m will be received up front and the remaining $6.2m will be held back to cover indemnities and is payable in two tranches within a maximum of 18 months. This leaves Boku as a pure-play payments business and the company plans to focus its resources on exploiting opportunities in the payments market, in particular expanding its mobile first (M1ST) network of local payment methods, including direct carrier billing, eWallets and real-time payments.

The company intends to use the proceeds to pay down remaining debt (we estimate this stood at c $8m at the end of FY21), to invest in the M1ST network and for general working capital.

Boku originally acquired the business at the start of 2019 for $25.1m, recording goodwill of $23.6m at the time. With the growth of the business taking longer than originally anticipated, the company wrote down goodwill by $20.8m in FY20. We estimate that this will result in a one-off gain on sale of c $28m.

Trading update

Boku has also provided an update on trading in FY21. The table below summarises the expected outturn for the year compared to our prior forecasts. Results for the Identity business are substantially in line with our estimates. Payments revenue is also in line while Payments EBITDA is 2% ahead of our forecast. The company noted that without currency headwinds (specifically the strength of the dollar versus the yen), Payments revenue and EBITDA would have been $2.3m higher in FY21 and TPV $360m higher, implying underlying Payments revenue growth of 25%, an underlying EBITDA margin of 39.3% and underlying TPV growth of 23%.

Exhibit 1: FY21 trading highlights

FY21 expected

Growth y-o-y

FY21e

Payments revenue

$61.9m

21%

$61.9m

Identity revenue (implied)

$7.1m

37%

$7.0m

Group revenue

$69.0m

22%

$68.9m

Payments EBITDA

$22.9m

21%

$22.5

Identity EBITDA

-$2.9m

-26%

-$2.9m

Group EBITDA

$20.0m

31%

$19.6m

Monthly active users

32.3m

13%

N/A

TPV

$8.2bn

18%

$8.2bn

Cash at end FY21

$62.4m

27%

$62.1m

Average daily cash Dec 2021

$50.5m

8%

N/A

Source: Boku, Edison Investment Research

During FY21 the Payments business saw launches for Google, Netflix, DAZN, Spotify, Epic Games, Facebook, Amazon, Riot Games and Tinder across direct carrier billing, eWallets and real-time payments. The number of end user accounts that can be accessed via the M1ST network now exceeds seven billion, of which 42% are eWallet or real-time payment accounts. Monthly active users for real-time payments and eWallets increased nine-fold to more than 1.1m.

Changes to forecasts

We have revised our forecasts to reflect the trading update and the disposal of the Identity business. We have assumed an increase in operating expenses for the Payments business in FY22 and FY23 as a proportion of the proceeds are reinvested in the business.

Exhibit 2: Changes to estimates

$'m

FY21e

FY21e

FY22e

FY22e

FY23e

FY23e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Payment revenues

61.9

61.9

0.0%

20.8%

69.0

69.0

0.0%

11.5%

76.1

76.1

0.0%

10.3%

Identity revenues

7.0

7.1

1.4%

37.7%

10.0

0.0

-100.0%

-100.0%

13.0

0.0

-100.0%

N/A

Total revenues

68.9

69.0

0.1%

22.3%

79.0

69.0

-12.7%

0.0%

89.1

76.1

-14.6%

10.3%

Gross profit

62.8

62.9

0.1%

22.1%

71.0

66.5

-6.3%

5.8%

79.2

73.4

-7.4%

10.3%

Gross margin

91.2%

91.1%

-0.1%

-0.2%

89.9%

96.4%

6.5%

5.3%

88.9%

96.4%

7.5%

0.0%

Payment EBITDA

22.5

22.9

1.6%

19.3%

24.5

23.5

-4.0%

2.7%

28.3

27.7

-2.1%

17.8%

Identity EBITDA

(2.9)

(2.9)

-1.5%

-26.0%

(2.5)

0.0

-100.0%

-100.0%

(1.6)

0.0

-100.0%

N/A

Total EBITDA

19.6

20.0

2.1%

30.9%

22.0

23.5

6.9%

17.5%

26.7

27.7

3.5%

17.8%

Payment EBITDA margin

36.4%

37.0%

0.6%

-0.4%

35.5%

34.1%

-1.4%

-2.9%

37.2%

36.4%

-0.8%

2.3%

Identity EBITDA margin

-41.9%

-40.6%

1.2%

34.9%

-25.0%

N/A

N/A

N/A

-11.9%

N/A

N/A

N/A

EBITDA margin

28.4%

29.0%

1.9%

1.9%

27.8%

34.1%

22.4%

5.1%

30.0%

36.4%

21.2%

2.3%

Normalised operating profit

15.2

15.6

2.7%

34.5%

16.2

17.7

9.4%

14.0%

19.5

20.5

4.8%

15.5%

Normalised operating margin

22.0%

22.6%

0.6%

2.0%

20.5%

25.7%

5.2%

3.2%

21.9%

26.9%

5.0%

1.2%

Reported operating profit

5.1

5.5

8.0%

-133.0%

5.2

34.7

572.1%

528.9%

8.5

9.4

11.1%

-72.8%

Reported operating margin

7.4%

8.0%

0.6%

37.6%

6.5%

50.3%

43.7%

42.3%

9.5%

12.4%

2.9%

-37.9%

Normalised PBT

14.5

14.9

2.8%

35.3%

15.3

16.8

9.9%

13.3%

18.7

19.6

5.0%

16.7%

Reported PBT

4.4

4.8

9.3%

-127.8%

4.3

33.8

693.7%

602.5%

7.6

8.6

12.3%

-74.6%

Normalised net income

11.6

11.9

2.8%

35.3%

12.3

13.5

9.9%

13.3%

14.8

15.5

5.0%

15.2%

Reported net income

4.0

4.3

9.3%

-123.0%

3.6

32.9

809.9%

660.2%

6.5

7.3

12.3%

-77.8%

Normalised basic EPS ($)

0.040

0.041

3.1%

27.0%

0.041

0.045

10.5%

11.2%

0.049

0.052

5.6%

14.1%

Normalised diluted EPS ($)

0.038

0.039

3.1%

21.5%

0.039

0.043

10.5%

11.2%

0.047

0.049

5.6%

14.1%

Reported basic EPS ($)

0.014

0.015

9.6%

-121.6%

0.012

0.111

815.0%

645.7%

0.022

0.024

13.0%

-78.0%

Net debt/(cash)

(62.1)

(54.3)

-12.6%

10.7%

(80.7)

(93.8)

16.3%

72.8%

(103.3)

(121.3)

17.5%

29.3%

TPV ($bn)

8.19

8.19

0.0%

18.0%

9.30

9.30

0.0%

13.6%

10.38

10.38

0.0%

11.6%

Take rate

0.76%

0.76%

0.00%

0.01%

0.74%

0.74%

0.00%

-0.01%

0.73%

0.73%

0.00%

-0.01%

Source: Edison Investment Research

Valuation

To reflect the disposal of the Identity business, we consider the valuation of Boku on FY22 multiples (NY in the table below). On enterprise value (EV) multiples, the company is trading at a discount to the average of its payment processor peer group on FY22 forecasts. We note that the whole group is trading on lower multiples than when we last wrote in September 2021, with share prices for the group (excluding Boku) down on average 23% and Boku down 19%, while revenue estimates are broadly flat except in the case of Worldline (reflecting a disposal) and Block (reflecting revenue volatility arising from the Bitcoin-focused Cash App business). Valuing Boku on the group average EBITDA multiple for FY22 would result in a share price of 195.7p compared to the current 168.5p share price.

Exhibit 3: Peer valuation multiples

EV/Sales (x)

EV/EBITDA (x)

P/E (x)

FCF yield (x)

CY

NY

NY+1

CY

NY

NY+1

CY

NY

NY+1

CY

NY

NY+1

Boku

8.6

8.6

7.8

29.6

25.2

21.4

58.8

52.9

46.3

1.0%

2.2%

3.3%

Adyen

51.7

37.3

27.7

83.2

58.9

42.7

120.4

83.8

61.1

1.2%

1.6%

2.4%

Bango

9.3

7.4

N/A

30.3

22.0

N/A

51.2

37.7

N/A

0.0%

0.0%

N/A

Block

3.5

3.3

2.7

64.1

56.7

38.0

78.7

71.8

49.3

1.1%

1.5%

2.3%

dLocal

34.6

20.3

N/A

87.6

53.2

N/A

112.5

69.6

N/A

N/A

N/A

N/A

FIS

6.2

5.8

5.4

14.1

12.9

11.7

18.0

16.0

14.2

4.9%

6.4%

7.4%

Fiserv

6.0

5.6

5.3

14.6

13.1

12.0

19.6

16.9

14.7

5.3%

6.4%

7.0%

Global Payments

6.8

6.2

5.7

14.6

13.1

11.8

18.5

15.7

13.6

5.0%

N/A

N/A

PayPal

8.1

6.8

5.6

28.2

24.6

19.6

38.6

33.8

26.8

2.8%

3.3%

4.3%

Worldline

4.2

3.8

3.5

18.0

14.1

13.1

23.5

19.3

16.5

2.9%

3.9%

4.9%

Average Payment Processors

14.5

10.7

8.0

39.4

29.8

21.3

53.4

40.5

28.0

2.9%

3.3%

4.7%

Source: Edison Investment Research, Refinitiv (as at 17 January)

Exhibit 4: Financial summary

$'m

2017

2018

2019

2020

2021e

2022e

2023e

31-December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

24.4

35.3

50.1

56.4

69.0

69.0

76.1

Cost of Sales

(2.3)

(2.5)

(5.6)

(4.9)

(6.1)

(2.5)

(2.7)

Gross Profit

22.1

32.8

44.6

51.5

62.9

66.5

73.4

EBITDA

 

 

(2.3)

6.3

10.7

15.3

20.0

23.5

27.7

Normalised operating profit

 

 

(4.0)

4.8

4.5

11.6

15.6

17.7

20.5

Amortisation of acquired intangibles

(1.3)

(1.3)

(1.6)

(2.2)

(3.1)

(3.1)

(3.1)

Exceptionals

(2.2)

(1.4)

(0.3)

(21.1)

1.0

28.0

0.0

Share-based payments

(1.5)

(4.6)

(6.8)

(4.9)

(8.0)

(8.0)

(8.0)

Reported operating profit

(9.0)

(2.4)

(4.1)

(16.7)

5.5

34.7

9.4

Net Interest

(2.4)

(0.6)

(0.4)

(0.6)

(0.7)

(0.9)

(0.8)

Joint ventures & associates (post tax)

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

Profit Before Tax (norm)

 

 

(6.4)

4.3

4.1

11.0

14.9

16.8

19.6

Profit Before Tax (reported)

 

 

(28.5)

(3.0)

(1.3)

(17.3)

4.8

33.8

8.6

Reported tax

(0.1)

(1.3)

1.7

(1.5)

(0.5)

(0.9)

(1.3)

Profit After Tax (norm)

(4.8)

3.4

3.2

8.8

11.9

13.5

15.5

Profit After Tax (reported)

(28.7)

(4.3)

0.4

(18.8)

4.3

32.9

7.3

Minority interests

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

Net income (normalised)

(4.8)

3.4

3.2

8.8

11.9

13.5

15.5

Net income (reported)

(28.7)

(4.3)

0.4

(18.8)

4.3

32.9

7.3

Basic average number of shares outstanding (m)

150.3

217.1

246.8

273.8

291.7

297.4

300.4

EPS - basic normalised ($)

 

 

(0.03)

0.02

0.01

0.03

0.04

0.05

0.05

EPS - diluted normalised ($)

 

 

(0.03)

0.02

0.01

0.03

0.04

0.04

0.05

EPS - basic reported ($)

 

 

(0.19)

(0.02)

0.00

(0.07)

0.01

0.11

0.02

Dividend ($)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

42.0

44.5

42.2

12.5

22.3

(-0.0)

10.3

Gross Margin (%)

90.7

92.9

88.9

91.3

91.1

96.4

96.4

EBITDA Margin (%)

(9.5)

17.9

21.3

27.1

29.0

34.1

36.4

Normalised Operating Margin

(16.5)

13.7

9.0

20.5

22.6

25.7

26.9

BALANCE SHEET

Fixed Assets

 

 

26.9

23.0

52.2

69.8

69.1

62.6

58.4

Intangible Assets

25.8

22.5

46.8

65.6

65.4

59.6

56.8

Tangible Assets

0.4

0.3

3.5

3.8

2.8

1.8

0.8

Investments & other

0.7

0.3

1.8

0.5

1.0

1.1

0.9

Current Assets

 

 

79.3

84.0

89.2

155.2

201.6

260.0

300.6

Stocks

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Debtors

59.1

51.7

53.6

92.5

137.7

164.8

177.9

Cash & cash equivalents

18.7

31.1

34.7

61.3

62.4

93.8

121.3

Other

1.4

1.3

0.9

1.4

1.4

1.4

1.4

Current Liabilities

 

 

(78.0)

(79.6)

(81.8)

(139.7)

(176.0)

(193.6)

(214.8)

Creditors

(75.5)

(77.4)

(78.0)

(136.8)

(174.6)

(193.5)

(214.6)

Tax and social security

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)

(1.4)

0.0

0.0

Other

(0.0)

0.0

(1.7)

(1.4)

(0.0)

(0.1)

(0.2)

Long Term Liabilities

 

 

(0.2)

(0.8)

(2.6)

(13.6)

(9.5)

(2.8)

(2.8)

Long term borrowings

(0.0)

0.0

0.0

(10.8)

(6.7)

0.0

0.0

Other long term liabilities

(0.1)

(0.8)

(2.6)

(2.8)

(2.8)

(2.8)

(2.8)

Net Assets

 

 

28.0

26.6

57.0

71.8

85.2

126.1

141.4

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

28.0

26.6

57.0

71.8

85.2

126.1

141.4

CASH FLOW

Op Cash Flow before WC and tax

(2.3)

6.3

7.4

15.3

20.0

23.5

27.7

Working capital

1.0

7.2

3.0

20.1

(7.4)

(1.9)

1.8

Exceptional & other

(5.5)

0.2

(1.3)

(3.8)

1.0

0.0

0.0

Tax

0.0

(0.2)

(0.1)

(0.3)

(1.0)

(1.0)

(1.0)

Net operating cash flow

 

 

(6.8)

13.5

9.0

31.3

12.6

20.6

28.5

Capex

(0.3)

(0.3)

(2.1)

(3.4)

(5.7)

(5.8)

(5.8)

Acquisitions/disposals

0.0

(0.2)

(0.7)

(36.6)

0.0

26.1

6.2

Net interest

(0.9)

(0.6)

(0.4)

(1.0)

(0.6)

(0.8)

(0.8)

Equity financing

19.8

0.5

0.6

26.2

1.1

0.0

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

(1.1)

0.2

(1.5)

(2.6)

(2.1)

(0.6)

(0.6)

Net Cash Flow

10.6

13.1

4.857

13.8

5.3

39.5

27.5

Opening net debt/(cash)

 

 

9.9

(16.2)

(28.9)

(32.6)

(49.0)

(54.3)

(93.8)

FX

0.4

(0.5)

(1.1)

1.3

0.0

0.0

0.0

Other non-cash movements

15.1

(0.0)

(0.0)

1.2

0.0

0.0

0.0

Closing net debt/(cash)

 

 

(16.2)

(28.9)

(32.6)

(49.0)

(54.3)

(93.8)

(121.3)

Source: Boku, Edison Investment Research

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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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Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

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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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