First Berlin Equity Research has initiated coverage on Beaconsmind AG (ISIN: CH0451123589). Analyst Christian Orquera’s rating is BUY with a price target of EUR 22.00.

Beaconsmind is a young technology company offering retail clients location-based marketing (LBM) solutions. The company’s product consists of intelligent beacons and an in-house developed software suite deployed at retailers‘ stores. The retailers can implement LBM campaigns, in which consumers receive advertising with highly relevant and personalised notifications on their mobile phones throughout their time at participating retail locations. Following COVID-19 retail shutdowns, experts agree the most successful reopening strategies are those that transform the customer’s shopping experience through the use of LBM. The beacon technology developed by Beaconsmind provides shoppers with customised buying opportunities and personalised recommendations, leading to ~15% higher revenues for retailers according to the company’s current track record. The company’s key client Adidas, which has a >16k store fleet worldwide, is rolling out the Beaconsmind solution. Besides substantial future revenue, this client validates the platform’s potential and may attract the attention of further prominent retail players as clients. The current pipeline includes five large candidates from three verticals, each of which owns between several hundred and four thousand stores and has the potential to add CHF 5-50m in revenue. On 21 November, Beaconsmind took a 51% controlling stake in the highly complementary German-based provider of corporate Wi-Fi and hotspot solutions FREDERIX GmbH for a price of €2.0m paid in shares. FREDERIX brought an attractive portfolio with a high cross-selling potential of 530 clients and ~10,400 points-of-sales, including the food retailers Lidl and Kaufland. We thus see attractive sales growth potential coming from Adidas, FREDERIX and the client pipeline. We anticipate substantial revenue growth acceleration over the next few years. We initiate coverage of Beaconsmind with a Buy rating and a €22 price target.