$17LIVE (VT1.SG)$$17LIVE W281207 (VT2W.SG)$ PhillipCapital i...

PhillipCapital initaited a 'buy' on 17LIVE with DCF-backed tp of 2.30 (WACC: 14.1%, g:1%).

They expect earnings growth in FY24e to be driven by a jump in virtual live streamers, expansion in live commerce revenue and aggressive streamlining of R&D and other expenses. Monthly Active Users (MAU) will begin its recovery with a growth rate of around 10% in FY24e from new content offerings in SE Asia, product enhancements and reinvestment into marketing.

With a net cash balance of US$102.7mn as of Dec 23, inorganic growth via acquisitions can add more streamers with their accompanying users onto the platform. This network effect will further elevate the appeal of the platform to other streamers and users.

17LIVE is further monetising its core user base and streamlining operating expenses. After declining for three years, we expect revenue to stabilize this year, and return to full-year growth in FY25e. The major drivers will be new content, live commerce sales and subscriptions, further cost reductions and inorganic growth.