Yojee Ltd (ASX:YOJ) is a logistics software company that claims to utilise blockchain technology and artificial intelligence.
Shareholders have been on a wild ride in recent times with the share price increasing from $0.03 in 2015 to a 52-week high of $0.29c in January 2018.
The exponential growth is largely due to the potential of blockchain technology made relevant by the recent bitcoin boom.
Despite all of the excitement surrounding this stock, the last six months have seen Yojee lose more than half of its market capital with a current share price of $0.14.
Yojee is in its nascent stages as a company with a fairly lacklustre financial history. It has failed to record a profit since listing and has only received $400,000 in sales in the first 9 months of the 2018 financial year.
Currently, Yojee has a market capital of $111 million and negative earnings per share. With net assets only worth around $7.3 million, the market is expecting big things from the small logistics software company.
Earnings projections are fairly uncertain, which means the value of Yojee is underpinned by the probability of signing new agreements and the assumed scalability within this high growth sector.
The adoption of blockchain technology and artificial intelligence is setting the stage for a logistics market boom. Currently worth $8 trillion, some "experts" are estimating the industry to be worth $15.5 trillion by 2023.
The industry is heavily diversified with the top four players controlling less than 15% of the market. As such, Yojee is not looking to partner-up with the Amazons of the world, rather:
"The Yojee Platform supports the small and medium players, the mums and dads and the aspiring entrepreneurs in competing against the global giants".
Being able to utilise economies of scale benefits when you are a small company is a must in this developing world. If Yojee can demonstrate the value of taking part in their collaborative network, the potential for growth is big.
Ultimately, like all investment decisions, the quality of management is paramount. Assuming the product Yojee offers is up to standard, the determining factor becomes the ability to communicate its value to potential customers.
Foolish takeaway
Clearly, Yojee is a high-risk speculative bet and with the amount of growth factored into the current price, I would much rather wait for it to get some runs on the board before I decide to invest. In saying that, I will watch this company very closely.
