December 8, 2022

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Mondee: Upcoming Key Participant In The Journey Know-how Business (NASDAQ:MOND)

Mondee: Upcoming Key Participant In The Journey Know-how Business (NASDAQ:MOND)

Mondee: Upcoming Key Participant In The Journey Know-how Business (NASDAQ:MOND)

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Description

I imagine Mondee Holdings, Inc. (NASDAQ:MOND) is value $9.43, representing ~24% upside from the date of writing (Oct 19, 2022). With a portfolio of leisure and journey manufacturers which can be well-known all around the world, MOND is an organization that operates in journey know-how and {the marketplace}. The corporate stands out from the competitors due to its cutting-edge technological platform, which facilitates quicker transactions, is definitely accessible on cell gadgets, and makes use of cutting-edge advertising and Fintech instruments.

Firm overview

MOND is a journey know-how firm and market with a portfolio of worldwide acknowledged leisure and company journey manufacturers. It gives state-of-the-art applied sciences, working programs, and providers seamlessly enabling journey transactions. These technology-led platforms can entry international journey stock and in depth negotiated journey content material. Mixed with MOND’s distribution community, these platforms create a contemporary journey market.

Assisted and affiliated shopper journey is ripe for disruption

Earlier than the COVID-19 pandemic, journey and tourism have been essentially the most vital and fastest-growing international financial sectors. In response to MOND’s S-1, in 2019, these sectors represented roughly 10% of the worldwide GDP. World journey spending equaled $1.9 trillion, and the increment within the annual charge was 6% previous to the coronavirus pandemic.

Assisted and Affiliated Shopper Journey contains stock offered to vacationers by associates and curators reminiscent of journey brokers, TMCs, firms, name facilities, associations, and different membership organizations. With the assistance of third events, finish customers acquire entry to airline and lodge reservations, automobile reservations, and different lodging which were configured for particular journey or expertise necessities and best-value costs. MOND reviews that the Assisted and Affiliated Shopper Journey vertical accounted for $1 trillion in income in 2019. It focuses on this phase of the journey reserving market, which is proliferating. In response to MOND’s S-1 submitting, the worldwide journey market is predicted to develop by 9% CAGR from 2021 to 2025, whereas in the identical interval, the journey company market is predicted to develop by 11%.

Lots of the conventional stakeholders offering Assisted and Affiliated Shopper Journey are nonetheless depending on legacy distribution networks and archaic working programs and depend on standard reserving strategies, failing to align with trendy customers’ reserving preferences and way of life necessities. They typically lack the transaction platforms and working programs with present shopper engagement applied sciences and transaction providers, thereby underserving the rising shopper cohorts.

I imagine these stakeholders don’t fulfill vital segments of the quickly rising gig economic system journey market, together with SMEs, thus creating vital white area market alternatives. Within the Assisted and Affiliated Shopper Journey phase, MOND’s platforms supply full options and a contemporary market for each leisure and enterprise vacationers.

MOND’s journey ecosystem disrupts incumbent platforms by modernizing an business nonetheless reliant on legacy know-how infrastructure. The corporate’s know-how platform will increase the effectivity of transactions, gives nice cell accessibility, and incorporates trendy advertising and Fintech instruments. For instance, TripPro is the highest answer for the gig economic system within the journey providers market. It provides gig staff the instruments they should construct a profitable work-from-anywhere journey enterprise or group.

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2Q22 earnings presentation

MOND’s platform gives entry to a variety of content material and fares

MOND’s distribution community connects over 50,000 journey associates and brokers to over 500 airways and over a million lodge and various hospitality lodging. This distribution community permits it to broadly present segment-targeted vacationers’ entry to its World Content material Hub (GUB) stock. The user-friendly TripPro, Rocketrip, TripPlanet, and UnPub platforms are then used to assist vacationers in goal markets use GCH stock.

Administration intends to broaden its in depth flight content material to distinguish itself from rivals by working with all airways that must fill planes rapidly because the COVID-19 pandemic wanes. Most airways lowered flights and capability to partially offset the numerous discount in passenger visitors, speedy lower in load elements, and steep improve in losses. Because the journey market restoration progresses and these airways reopen their routes and re-establish capability, they may want further assist to fill seats and improve load elements.

Other than flight content material, lodge bookings are a latest addition to the MOND platform and presently account for lower than 10% of its bookings. Lodge bookings are an space the place MOND plans to focus its efforts, as the corporate will give attention to constructing relationships with different lodges and different various lodging suppliers. MOND believes its UnPub subscription-based product will enchantment to hoteliers hoping to fill last-minute lodge stock. The corporate plans to make use of its energy in airfare content material to spice up lodge bookings by providing lodge bookings as an add-on or as a part of a bundle with largely air transactions.

MOND may even prioritize including new classes of journey content material, reminiscent of cruises, dynamic packages, and leisure, organically and thru acquisitions. Journey associates provoke a majority of cruise bookings by offline channels and specialty distributors. It could possibly leverage its robust relationships with journey associates and its place with rising gig staff worldwide to broaden its cruise relationships and content material.

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2Q22 earnings presentation

Sturdy distribution capabilities

MOND at present maintains a distribution community that features over 50,000 journey associates and brokers, company enterprise prospects, and companions with direct channels to vacationers. Administration plans to take the next actions to strengthen its worldwide journey distribution community:

  1. The corporate plans to broaden its presence globally to turn into a number one working system for international journey lodging. As such, worldwide enlargement is a precedence in 2022 and shifting ahead.
  2. MOND is increasing with TripPro’s new “Journey Options in a Field” providing, reworking gig staff into Twenty first-century journey suppliers. The corporate expects this new pool of gig staff to exponentially improve the journey supplier market. These gig staff will depend on MOND’s platform to conduct this enterprise, strengthening the corporate’s aggressive benefit vis-à-vis legacy suppliers. I imagine the brand new gig journey economic system may even encourage journey suppliers who need to promote their journey content material by these new gig journey suppliers to make use of MOND’s market, which is able to strengthen its content material and distribution community.
  3. Develop SME Journey Market Share. Historically, solely giant enterprises have had entry to worth pricing, higher service, and reporting. Nonetheless, with TripPlanet, MOND plans to offer this mannequin effectively to SMEs, nonprofits, and different membership organizations. TripPlanet already brings a deep set of journey advantages, and the corporate plans to develop this enterprise by focusing on extra small companies and non-business organizations. MOND plans so as to add much more providers, reminiscent of new advantages for workers and members of those companies who need to journey for enjoyable.

M&A to additional enhance development

The corporate has a powerful observe report of efficiently integrating and enhancing its acquired companies. MOND plans to maintain searching for strategic alternatives that may enhance its platforms, broaden and deepen its content material, and enhance its infrastructure for distributing its content material.

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2Q22 earnings presentation

MOND plans to broaden its dynamic packaging capabilities with even better content material choices and is assessing acquisition candidates with this experience to boost these capabilities on its platform. The corporate has recognized alternatives to extend its worldwide footprint by buying distributors, aggregators, and platforms primarily based in Europe and different international markets. Particularly, MOND regarded for methods to broaden its number of lodges and different locations to remain, cruises, and excursions.

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2Q22 earnings presentation

Valuation

I imagine MOND is value USD $9.43 in FY23 representing a 24% upside from the date of writing.

This worth is derived from my mannequin primarily based on the next assumptions:

  1. Income development will observe administration’s FY22 and FY23 steerage, which is supported by natural development and M&A.
  2. I differ from the market and imagine that NOTE deserves to commerce at a a lot greater a number of than immediately once we examine it to different main gamers within the journey area, reminiscent of Reserving (BKNG) and Expedia (EXPE). I imagine MOND ought to commerce in a similar way to EXPE given the upper similarity within the enterprise mannequin. EXPE has traditionally traded at round 11x ahead EBITDA earlier than COVID occurred, and I anticipate MOND to finally commerce at related ranges when the world recovers utterly from COVID.

Valuation

GS Investing estimates

Guidance

MOND 424B3 submitting

Key Dangers

Competitors

The journey providers business is aggressive. MOND’s rivals could have entry to vital monetary assets, better identify recognition, and well-established consumer bases of their goal buyer segments. This might make it harder for MOND to draw new prospects. MOND competes for its personal share of the journey providers market in a number of market segments, with completely different enterprise fashions, know-how, and different abilities, and in several components of the world. This will likely make it tougher for MOND to search out new prospects.

Repeated lockdowns will harm MOND

These authorities mandates have had a big damaging affect on the journey business and most of the journey suppliers on which our enterprise depends, in addition to on our workforce, operations, and purchasers. Journey restrictions imposed by the European and U.S. governments are starting to be lifted, however there’s nonetheless quite a lot of uncertainty across the affect of the brand new variants of COVID-19. Issues have additionally been raised about how nicely present vaccines will work in opposition to these new variants and when they are going to be distributed and given world wide.

Levered steadiness sheet

If COVID or one other main lockdown occurs once more, MOND may face liquidity points given its excessive debt ranges. MOND would possibly want to lift further financing by fairness financing, which may dilute buyers.

Abstract

MOND is at present undervalued at its present share value as of this writing. MOND is a market and know-how provider for the tourism business, and its consumer checklist contains many well-known names. The corporate distinguishes itself from rivals with its cutting-edge technological platform, which permits for quicker transactions, is mobile-friendly, and employs cutting-edge advertising and Fintech applied sciences. I really feel that the present worth gives a wonderful alternative for buyers to earn average returns over the subsequent yr.