W Corporation Ltd (SGX: AFC) was previously a firm with trading operations in silicon metal and LED related electronic products. But, big changes are underway with W Corp’s shareholders voting on 23 July 2014 to allow a Reverse Takeover transaction with YuuZoo Corporation to take place. Under the deal, mainboard-listed W Corp would issue 490.9 million new W Corp shares – valued collectively at S$490.9 million – to YuuZoo’s shareholders. In addition, W Corp had also completed a reverse stock-split early this month which saw 10 existing shares of W Corp consolidated into one new W Corp share. All these…
W Corporation Ltd (SGX: AFC) was previously a firm with trading operations in silicon metal and LED related electronic products. But, big changes are underway with W Corp’s shareholders voting on 23 July 2014 to allow a Reverse Takeover transaction with YuuZoo Corporation to take place.
Under the deal, mainboard-listed W Corp would issue 490.9 million new W Corp shares – valued collectively at S$490.9 million – to YuuZoo’s shareholders. In addition, W Corp had also completed a reverse stock-split early this month which saw 10 existing shares of W Corp consolidated into one new W Corp share. All these would ultimately see YuuZoo’s shareholders end up collectively controlling more than 80% of W Corp.
Who is YuuZoo?
YuuZoo was established in 2008 by current chairman and Chief Executive Thomas Zilliacus, who was formerly the regional director and president of Nokia. At present, the company is a Singapore-based e-commerce firm which builds mobile-optimized and device-agnostic targeted social e-commerce networks for businesses and consumers.
It has managed to build a network of over 42 million registered users in 164 countries through its Yuu-Branded Networks and Client Branded Networks. Through these networks, YuuZoo then helps its clients (which consist of different businesses) find ways to monetize the users who belong to the networks.
Put differently, YuuZoo helps businesses build their own social networks where they “own” the user, instead of relying on say, Facebook, for example. Following which, the businesses can then engage with the users in their own social network in novel ways which might hopefully lead to the generation of revenue.
Why the big hoo-ha?
In the USA, social-media companies have been generating lots of excitement amongst investors and that’s evident through the valuations of companies like Facebook and Twitter – the former carries a trailing price/earnings ratio of close to 80 while the latter has a market capitalization of US$27 billion despite not making a profit.
Now that Singapore’s share market is about to get its very own social media representative, it’s perhaps understandable that investors here might get excited as well. And speaking of excitement, there are two new developments announced by YuuZoo recently which does look promising and might excite investors about the future of the company.
Firstly, it has been selected by ‘The Redeemed Christian Church of God’, one of the world’s largest and fastest growing churches with over 50 million global followers, to build a targeted social network to help the church create a global cyber community.
If the church is successfully brought on board YuuZoo’s platforms, the company would see its total registered user increase to around 100 million globally. With that come the “potential to significantly increase the advertising and e-commerce revenue of YuuZoo.”
Secondly, YuuZoo will soon be launching its first major social e-commerce and sports lottery network which is linked to a top-rated prime-time football TV show in China. In this deal, YuuZoo will be partnering Xin Lei Network Technology Co Ltd and Great Sports Media Co Ltd. In particular, Great Sports Media’s TV network, which includes the football TV show, has a reach of more than 700 million viewers in China. That’s a huge audience for YuuZoo to tap into.
Thomas Zilliacus, Chairman and CEO of YuuZoo is upbeat about this development and commented:
“We are very excited to launch the first of many new social networks we plan to launch through our partnership with Great Sports Media and Xin Lei. China is the world’s largest market by number of consumers and the world’s largest e-commerce market with more than 1.8 trillion RMB in 2013 revenues. The partnership represents a significant opportunity for YuuZoo. We have every reason to believe that the combination of offline TV and online targeted social e-commerce will generate significant and material customer interest and revenues.
Our full focus is on offering Chinese consumers new and better solutions, by bringing in new features such as mobile-optimized social e-commerce, offering both local and global merchandise, and personalized hyper-targeted advertising that the consumer can control, combined with mobile loyalty cards. Great Sports Media is the ideal partner to market this to the Chinese consumers. We are confident that our partnership with Xin Lei and GSM will result in the emergence of a new leading social e-commerce market player in China.”
Although these developments do look rosy for the transformed W Corp, it should also be noted that it remains to be seen if YuuZoo can deliver on its prospects.
In 2012, YuuZoo’s earnings more than doubled from US$2.37 million to US$5.17 million. But that torrid pace of growth seemed to have slowed considerably with YuuZoo’s earnings increasing by only 10.4% to US$5.71 million in 2013.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor James Yeo doesn’t own shares in any companies mentioned.