Q2’22 Earnings Summary $77.8M revenue Search revenue $33.7M , +13% YoY Advertising revenue $43.1M , +49% YoY 85% GM ( ~10% lower than last year due to higher pass through ad revenue) AEBITDA $16.6M - 21% Margins 28% YoY reduction is Marketing and Distribution Expenses
how do you rate the repurchase of Qifei/Zhou Hongyi shares?
On the one hand, it's good that Opera can buy back a large amount of shares at once. On the other hand, the currently SP is below the $5.50 paid for it.
Self-deal for the old business colleague or a strategic step to create long-term value for the remaining shareholders?
Unfortunately, this also reduces the margin of safety, since the cash holdings are greatly reduced.
I also think your valuation of Opay is too optimistic. The approximately 130 million refer to the last round of financing. Since then interest rates have risen massively and the macroeconomic environment has also deteriorated.
I guess the value is more like 70-80 million.
If you now deduct the 128 million for Qifei and the approx. 40 million for the remaining share buyback from the 187 cash, Opera still has net 19 million cash (plus the remaining payments from starX and nanobank) plus 80 million from opay, so a total of around 100 million.
At the current valuation of 470 million, it may appear that Opera is cheap (EV/S multiple just over 1 with annual revenue of 320 million). However, the fast-growing advertising division in particular could run into problems if we see a stronger recession.
It would then also be questionable whether Opera could increase the net margin in such an environment. I guess not, at least not for the next 12-18 months.
The optically low price can therefore be a sign of pessimism from the investors.
I would take this seriously if the economy smear off.
Hey Bryce,
how do you rate the repurchase of Qifei/Zhou Hongyi shares?
On the one hand, it's good that Opera can buy back a large amount of shares at once. On the other hand, the currently SP is below the $5.50 paid for it.
Self-deal for the old business colleague or a strategic step to create long-term value for the remaining shareholders?
Unfortunately, this also reduces the margin of safety, since the cash holdings are greatly reduced.
I also think your valuation of Opay is too optimistic. The approximately 130 million refer to the last round of financing. Since then interest rates have risen massively and the macroeconomic environment has also deteriorated.
I guess the value is more like 70-80 million.
If you now deduct the 128 million for Qifei and the approx. 40 million for the remaining share buyback from the 187 cash, Opera still has net 19 million cash (plus the remaining payments from starX and nanobank) plus 80 million from opay, so a total of around 100 million.
At the current valuation of 470 million, it may appear that Opera is cheap (EV/S multiple just over 1 with annual revenue of 320 million). However, the fast-growing advertising division in particular could run into problems if we see a stronger recession.
It would then also be questionable whether Opera could increase the net margin in such an environment. I guess not, at least not for the next 12-18 months.
The optically low price can therefore be a sign of pessimism from the investors.
I would take this seriously if the economy smear off.