SINGAPORE (Sept 6): Synagie is the provider of e-commerce services to more than 250 fast-moving consumer goods (FMCG) brands such as such as Kimberly-Clark.
Established in 2014, homegrown Synagie’s suite of services includes setting up a brand’s multi-channel online retail presence on popular marketplaces such as Lazada and Qoo10 and helping to manage its customers’ e-logistics and fulfilment processes.
See: Synagie Corp eyes net proceeds of $9.8 mil from Catalist IPO at 27 cents per share
In April, Synagie acquired Insurtech subsidiary 1Care Global to enter the third-party administrator (TPA) business. This is Synagie’s third business segment which would work in tandem with its e-commerce and e-logistics segments.
1Care Global, which is profitable, could help Synagie expand into the computer, communication and consumer electronics (3C) segment, moving beyond its core BBB space and fits into its asset-light business model, which allows for rapid scalability.
Frost & Sullivan rates Synagie as one of the fastest-growing e-commerce startups in Southeast Asia, given its historical revenue CAGR of 551.8% over 2015-17.
In 2017, the online BBB industry accounted for 13.3% of the e-commerce gross merchandise volume (GMV) in Southeast Asia and is expected to grow by 25.2% CAGR over 2017-22, underpinned by mass-market brands adopting a direct-to-consumer digital strategy comprising online sales channels and high turnover rate for BBB products.
In a Wednesday CGS-CIMB Securities report, analyst Colin Tan says, “We think other revenue growth drivers may come from Synagie’s expansion into other product categories beyond BBB and outside of Singapore.”
“Although the group is currently loss-making, we project Synagie to deliver 70.7% revenue CAGR over FY17-20 and achieve positive net profit in FY20, benefiting from economies of scale,” adds Tan.
Given that Synagie is still in an early high-growth stage, Tan projects that it would achieve normalised EBITDA of $4.8 million by end FY23.
CGS-CIMB is recommending an “add” and a target price of 34 cents.
As at 2.11pm, shares in Synagie are trading at 22 cents or 5.3 times FY19 forward book value.
