Xplora Technologies: Expanding into the youth segment - ABG

Partners with HMD Global to launch youth phones
No capex or WC required, high service revenue potential
Could be upside to estimates if the partnership is a success


Low-risk and capital light model

Xplora has entered into a partnership with HMD Global (producer of Nokia phones) to launch a range of co-branded feature and smartphones designed for young users. The phones will be developed and produced by HMD, meaning there is no capex required for Xplora. In addition, HMD will also be responsible for inventory and distribution, i.e. there is no working capital required either. In our view, this is smart as it significantly reduces both the risk and capital required. In return, HMD will receive a share of all service revenues generated from the youth phones. Xplora's contribution will be to provide the phones with a pre-installed SIM card and its software/parental control app. The first products will be unveiled at MWC in March 2025, i.w. we think it is likely to begin to generate revenues from Q3'25.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/xplora_technologies/Equity-research/2024/10/xplora-technologies---expanding-into-the-youth-segment/