Karachi, November 11, 2021 (PPI-OT): Blue Ex: The upcoming gem
Universal Network Systems Limited (Blue Ex) held a briefing session for investors yesterday to discuss its upcoming IPO along with the outlook of the company. We present key takeaways from the session.
Universal Network Systems Limited (Blue Ex), the issuer, is planning to issue 6.86mn shares (25% of post-issue capital) through a fixed price mechanism at Rs65/share. The company will be listed on PSX’s GEM board.
Blue Ex intends to raise Rs445.7mn through the offering to invest in in-house technology development and expand its infrastructure to maximize its footprint across the country. Currently the company is offering solutions based on its core capabilities in the Courier, Commission income, and Cargo segments.
The raised amount will be spent on the Development in Technology Segment (Rs95.76mn), Expansion of Out-Reach Network (Rs144.95mn), Expansion of E-Commerce Solutions (Rs165.00mn), and Working Capital (Rs40.00mn).
At present, the company is delivering in 35 Stations, 7 Substations, and 657 cities and small towns. The courier segment has a market share of ~6% and is the largest contributor to company profitability (96% of income earned in FY21).
Blue EX has a diversified client base including fashion houses like Gul Ahmed, Sapphire and Al Karam, FMCGs like Unilever, Nestle and Coca-Cola, Pharmaceutical companies and Auto Manufacturers. The company’s competitors in Courier services also include some very established brands like TCS (having the largest market share) DHL, M and P, Leopards, Trax etc.
The company’s expansion plan is focused on interconnectivity of an expanding network and machine learning based real-time data mining/analysis to cater to a monthly business demand of more than 350,000 consignments in the next 2 years’ time from the current average of ~230,000 consignments/month. Blue Ex plans to add 2-3 more warehouses and 7 executive retail express centers.
Recent E-commerce segment private deals in the region were also discussed which included Airlift (raised US$ 85mn), Cheetay (raised US$3.8mn), and Riders (US$2.3mn).
In the outgoing fiscal year FY21, the company posted sales of Rs1.54bn (up 28% compared to SPLY) whereas, it reported a Profit after tax of Rs33mn (16.5x YoY) translating to an EPS of Rs1.21 (based on post issue shares) owing to higher number of delivered parcels due to a surge in demand for last mile logistics due to the pandemic. The company foresees EPS of Rs2.86, Rs6.20, Rs8.71 for FY22, FY23 and FY24, respectively.