Tiny Phone Retailer Story-I Surges 42% Thanks to New iPhone (ASX:SRY)

When it comes to micro-cap stocks, you can find some really niche businesses.

Take Story-I Ltd [ASX:SRY] for instance. A stock that carries a market cap just shy of $10 million, and operates primarily out of Indonesia. SRY runs a small chain of mobile phone stores that sell devices and accessories.

This niche is simple, easy to digest, but also extremely hard to break into. After all, the barriers to entry for a small retail outlet can be challenging. And yet, despite its tiny scale, this company has made its way onto the ASX.

And more importantly, as an official Apple phone re-seller, it’s doing pretty well for itself, with the SRY share price soaring by 42.28% at time of writing.

The iPhone bump

As Story-I announced today, the businesses did very well in Q2 (October–December) of FY21. This was largely due to the release of the iPhone 12 Max and iPhone 12 Mini in Indonesia on 18 December.

All in all, thanks to these phones — and a handful of other Apple products — Story-I was able to clock up $11.9 million worth of revenues. A 98.3% increase in sales compared to the prior quarter.

Needless to say, that’s a huge uptick for this up-and-coming retailer. It highlights not only the kind of growth it may be able to capture, but also the rise of the Southeast Asia (SEA) region as a whole.

Granted, executive director Michael Chan is still remaining level-headed. He said that while these figures are promising, the threat of COVID-19 is still a very real issue:

While we remain cautious of the impact of future outbreaks of Covid-19 on our business we are encouraged by a number of factors.

The improvement in sales in November and December has been very promising and the uptick in sales have carried over into January.

Another reason to be optimistic is that Indonesia has started the mass vaccination programme for Covid-19 last week after approval from the drug agency BPOM. This is a positive step for the economy and we look forward to better trading conditions ahead.

This is an exciting development for this novel retailer, especially if demand for Apple products continues to grow in the region.

What’s next for Story-I?

For now, the focus for Story-I is much the same: Looking for as many ways as possible to grow its bottom line.

One of its newer goals is to leverage the education sector by creating an ‘EduClub’ for students and teachers to purchase Apple devices online for their learning needs. The company also intends to provide special deals and exclusive offers to drive sales.

Whether these initiatives will net the desired results remains to be seen.

Broadly speaking, though, Story-I is a stock worth keeping an eye on. Not just because it may be able to ride the Apple boom to higher highs, but because SEA as a whole is on the up.

Few companies on the ASX can boast this kind of direct and exclusive exposure to the region. And while SRY’s business is certainly a niche offering, it could be indicative of a wider trend.

It’s a trend that we here at Money Morning have discussed in detail, especially as tensions between China and Western nations — including Australia — have come under strain. This has opened up a window of opportunity for SEA economies, both as trading partners and producers.

So, for more analysis and news on this investor avenue, check out our daily e-letter, where we bring you stories, just like this one, that you won’t hear about anywhere else.

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Ryan Clarkson-Ledward,
For Money Morning

Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

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