CCBI Issued Updated Report on iClick (NASDAQ: ICLK)

Maintained Outperform and Raised Target Price from US$18.00 to US$22.60

CCBI issued an updated report on iClick Interactive Asia Group Limited (NASDAQ: ICLK) on 27 January 2021, reiterating its Outperform rating with a target price of US$22.60, which represents an upside of 56.5% from the closing price of US$14.44 as at 26 January 2021.

Yesterday, Baozun announced that it will make an equity investment into iClick (a consideration of US$50m) and that the two companies have entered into certain agreements to capitalize on private domain business opportunities within Tencent's ecosystem. Under the strategic cooperation framework, Baozun will provide online e-commerce operation and infrastructure services such as warehousing and customer services to brand partners, while iClick will provide SaaS-based IT and system solutions to help brand partners establish their e-commerce infrastructure within the Tencent ecosystem. Both parties will jointly develop a private domain traffic platform within Tencent's e-commerce ecosystem.

CCBI believes that iClick's SaaS-based enterprise solution in the fast lane. There is little overlap between the two companies in terms of brand partners. The cooperation with Baozun will not only enable iClick to expand its SaaS solution's KA base, but also offers it an opportunity to provide one-stop end-to-end solutions to its customers. Meanwhile, iClick and Baozun plans to launch more standardized services and products catered to the medium-size clients. Given the increasing client base and great business potential, CCBI expects the cooperation between these two companies to become a meaningful revenue driver in 2H21F and look for 153%/96% SaaS-based enterprise solution revenue growth for iClick in 2021F/22F.

As a result, CCBI reiterates Outperform rating and raises target price to US$22.60. It is based on SOTP valuation, with US$2.50 for marketing solutions based on 20x non-GAAP earnings and US$20.10 for enterprise solutions based on 15x price-to-sales.