28. January 2021 | 10:28 CET
Software AG, Upco International, Moderna - Here's the new WhatsApp!
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ISIN: CA9152971052 , DE000A2GS401 , US60770K1079
Significant increase in downloads
Upco Messenger, one of several tools from cloud-based mobile Company Upco International, has seen a very sharp increase in downloads in recent weeks. In particular, Upco's key growth markets in the Middle East and Asia contributed to unprecedented growth rates of about 15% weekly since the beginning of 2021. Upco offers state-of-the-art "end-to-end encryption" for Messenger, which prevents messages from being stored and read by people who are not the intended recipient. In addition, the Canadians do not sell analytics or data usage to third parties. It was one of the main criticisms of WhatsApp and its parent Facebook.
Through a radical reboot last year, the new management around the experienced CEO Andrea Pagani turned things around. The clear structuring into two business units was the key to sustainable success. The first unit is Wholesale Telecom, which corresponds to the classic telecommunications wholesale business. Here, better contract terms with international telecommunications providers for cross-border telephone traffic are achieved by pooling many smaller customers. Upco International coordinates Wholesale Telecom, but it will be operationally managed by earmarked companies that will be integrated into the group over time.
Into the future with blockchain
Wholesale Telecom is a natural fit for Upco International as a sales vehicle for its second division, Digital Services. This segment focuses on voice and data services as well as digital payments and money transfers. Voice and data services such as voice over IP and chats are handled through UpcoNet, while digital payments work through UpcoPay. Initially, UpcoPay will be innovative and highly secure as it is a blockchain-based direct payment method between individuals and merchants. Then, starting in 2021, Upco users in Europe will be able to use UpcoPay to send and receive money simply, securely, and without using a credit or debit card, but much more cheaply than competitors like Western Union or PayPal.
UpcoPay is set to launch across Europe with Finnish partner Enfuce. The Upco International share has made a fabulous comeback in recent weeks from EUR 0.03 to EUR 0.19 at its peak. However, the stock market value is still a manageable EUR 17.92 million. If the new management strategy works out, higher prices should be seen in the long term.
Above forecasts, weak outlook
Software AG performed slightly better than expected in terms of revenue and earnings in the final quarter. Total revenue fell by around 7% to EUR 237.8 million, while EBITDA declined by a good quarter to EUR 62.5 million. At the same time, the forecasts for the year as a whole, which had been raised in November, were exceeded in terms of incoming orders. However, the Company had to slow down somewhat on the outlook. Management expects further burdens on earnings due to the faster switch to subscription models. The EBITDA margin in 2021 is likely to be between 16 and 18 percent, which is below analysts' forecasts of just under 21 percent. In 2023, however, the Company is targeting a margin of 25 to 30 percent. Shares nevertheless rose 7.2%to EUR 36 despite the gloomy outlook.
On the verge of a breakthrough
It's getting exciting. In the coming days, pharmaceutical giant Johnson & Johnson expects to receive data from a phase 3 trial of a Covid-19 vaccine. Unlike its competitors, this vaccine enables only a single dose to be sufficient for full vaccine protection. Of course, this would be a clear competitive advantage against BioNTech, Moderna and AstraZeneca. If the results are successful, an application for emergency approval will be submitted in the USA as early as February.