SeeThruEquity Initiates Coverage on Apivio Systems, Inc. with a Price Target of CAD$1.25

NEW YORK, NY / ACCESSWIRE / June 1, 2016 / SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced it has initiated coverage of Apivio Systems, Inc. (TSXV: APV.V, “Apivio”) with a price target of CAD $1.25.

The report is available here: APV Initiation Report. SeeThruEquity is an approved equity research contributor on Thomson First Call, Capital IQ, FactSet, and Zack’s. The report will be available on these platforms. The firm also contributes its estimates to Thomson Estimates, the leading estimates platform on Wall Street.

Based in Vancouver, Canada, with a wholly-owned operating subsidiary in South Korea, Apivio provides innovative communications equipment and solutions for commercial VoIP markets. Led by its new Monet Series UT880 smart office handset and related premium cloud-based apps, Apivio’s solutions target the convergence of Android, Wi-Fi and VoIP technologies. Through its wholly-owned subsidiary, Moimstone Korea (“Apivio MK”), Apivio is already an emerging leader in the VoIP phone space – selling over 1 million units last year in one of the world’s leading enterprise telephony markets, while amassing an impressive tier one customer list that includes KT, LG U+, and SK Telecom, among others. In our view, Apivio represents a compelling opportunity in the tech / telecom space. The company has a defensible margin of safety from the cash flow of its Korean subsidiary which generated CAD $5.5mn of adjusted EBITDA in 2015 (adding back costs related to the North American business) – while also offering an attractive growth profile as a pure play in the large and growing global VoIP market.

Highlights from the report are as follows:

Apivio powered by strong results in South Korea

Apivio has generated healthy revenue and cash flow growth from its Apivio MK subsidiary, which has grown rapidly in South Korea over the last several years on the heels of its successful Dexter IP phone franchise. The company has sold over 5mn units in South Korea, including a company-record 1mn units in 2015, working with the top 3 leading VoIP carriers in the market – KT, LG U+ and SK Telecom. Apivio MK appears to be well-defended in its market position as the company has strengthened its tier one carrier relationships with advanced custom software, which increases stickiness with the carriers while enhancing features and performance. Apivio MK has been the primary revenue driver for Apivio over the last several years, as overall revenues have climbed from CAD $29.5mn in 2012 to just under CAD $60mn in 2015. Moreover, Apivio has generated positive adjusted EBITDA for eight consecutive quarters, and the subsidiary viewed in isolation generated adjusted EBITDA margins of 9.3% in 2015.

Attractive international growth opportunity with NEC

While we are impressed by the organic growth at its Apivio MK subsidiary, Apivio’s leadership has also articulated a shrewd strategy for driving future growth and expansion, which leverages the company’s technology leadership with a global go-to-market strategy targeting the enterprise space. The enterprise space is a natural fit for Apivio, given the fact that enterprise telephony is a massive global market undergoing a structural change from legacy PBX based systems to IP-based systems using smart VoIP and soft IP phones. This creates a significant opportunity for new entrants with proven VoIP technology like Apivio to enter the market, and the company is attacking it aggressively through a sales distribution partnership with technology industry behemoth NEC North America. Apivio shipped its first 10,000 units of its new Monet Series UT880 smart VoIP enterprise video phones to NEC North America in 2015, and has already announced a follow-on order. NEC is the exclusive global distributor for the UT880, an Android-based smart desk phone, with features that include a full suite of advanced telephony and networking capabilities, a high resolution video screen, and the companies recently launched a suite of enterprise apps for the UT880, which offers a chance for differentiation as well as an opportunity to create a high value user experienced that brings along with it a high-margin recurring revenue platform for Apivio.

Initiate coverage with a price target of CAD $1.25

Our analysis indicates a fair value estimate of CAD $1.25 per share for Apivio. We see the company as an undervalued technology company with an opportunity for robust growth if it is able to achieve its aim of penetrating the global enterprise VoIP market with NEC. If achieved, the price target of CAD $1.25 represents potential upside of 273% from the recent price of $0.34.

Please review important disclosures at www.seethruequity.com.

About Apivio Systems, Inc.

Apivio Systems Inc. (“Apivio” or the “Company”) (TSX VENTURE: APV) is a Canadian technology company principally engaged in the design, development, marketing, and sale of communications equipment and software. It has a wholly-owned Korean subsidiary with a history of supplying VoIP telephone equipment and other products to major Korean and international telecommunications carriers. For more information regarding Apivio, please refer to its respective public filings available at www.sedar.com.

About SeeThruEquity

SeeThruEquity is an equity research and corporate access firm focused on companies with less than $1 billion in market capitalization. The research is not paid for and is unbiased. The company does not conduct any investment banking or commission based business. SeeThruEquity is approved to contribute its research to Thomson One Analytics (First Call), Capital IQ, FactSet, Zacks, and distribute its research to its database of opt-in investors. The company also contributes its estimates to Thomson Estimates, the leading estimates platform on Wall Street.

For more information visit www.seethruequity.com.

Contact:

Ajay Tandon
SeeThruEquity
info@seethruequity.com

SOURCE: SeeThruEquity

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