HONG KONG, Mar 11, 2021 - (ACN Newswire) - Chinese investment bank China Securities initiates coverage on YEAHKA LIMITED
(9923) with a BUY rating.
In the initiation research report headlined "A Technology-enabled, Industry-leading Mobile Payment Company", China
Securities equity research analyst Ran Zhao is bullish on Yeahka's addressable market, recognizing the Company's core
competitiveness as "product + channel + ecosystem".
Key takeaways from the research report include:
Competitive landscape: Market concentration likely to increase
- UnionPay, Lakala and Yeahka are the leading players among third-party non-financial payment service providers. While
Yeahka is slightly behind the two peers in terms of transaction volume, it has a larger number of transaction counts.
China Securities' research estimates the market share of these three leading players in China is no more than 30%.
Entry barriers: Limited number of payment licenses
- There are only 31 non-financial payment service providers with national payment licenses in China up to date, of which
16 own a mobile payment license. It is expected that the PBOC will not issue additional payment licenses with ongoing
heightened regulatory scrutiny.
Industry outlook: RMB 10 billion+ market ahead
- Increasing penetration of integrated QR code payments could boost one-stop mobile payment services. According to
statistics from iResearch and other third-party sources, integrated QR code payment transactions currently accounted for
approximately 30% of offline QR code payment transactions, with an average annual transaction volume of more than RMB
200 trillion. Assuming an average payment take rate is 1.5%o, and the market penetration increases 10%, the incremental
market size will be RMB 30 billion.
- Yeahka's technology-enabled business will benefit from the increasing penetration of SaaS. According to China
Securities' conservative estimates, assuming 50% of the 60 million Chinese merchants nationwide purchased SaaS products
or services at an annual subscription rate of RMB 1,000, the market size will be RMB 30 billion.
Core competitiveness: product + channel + ecosystem
- Product: as an independent third-party service provider, Yeahka offers SaaS products to help merchants connect with
diversified payment, marketing and financial platforms, giving alternative option rather than having to pick between two
- Disctribuiton channel: Yeahka's distribution network spans 8000 partners and more than 300 cities in China. Its
payment services served around 4.7 million merchant customers and 491.9 million consumers as of June 30, 2020.
- Ecosystem: Yeahka's SaaS products developed for merchants include a suite of one-stop payment services, shop operation
services and marketing services. The number of technology-enabled service customers reached 585,000 in the first half of