Financial technology, or FinTech, has been revolutionising the traditional banking financial market. FinTech is making the financial markets more efficient and designs products according to the customer’s needs & the expected demand.
Fintech includes the technology disruptors like startups and new market entrants, along with the current firms and institutions that in order to grow and capture market share invests in modern technology. This will also help these companies to maintain their hold in the global financial system. Moreover, Australia is drawing massive FinTech investments and innovation from reputable entities and startups all over the world.
Moreover, Fintech companies all over the world are associating with one another to form the multi-national partnership, which are required for the sectors to expand & upgrade in the highly international ecosystem of financial services space.
Let’s take a look at a few stocks from fintech space to have a better understanding on them:
Afterpay Limited (ASX: APT)
Afterpay Limited (ASX: APT), formally called Afterpay Touch Group Limited, is an Australian leading financial technology company that offers an installment payment service & operates in the United States, United Kingdom, Australia and New Zealand. APT intended to defer the SPP in the profits of the stakeholders as Afterpay has to contemplate the final audit report and its recommendations.
Afterpay Australia Pty Ltd had earlier got the notice from AUSTRAC and the company had to appoint the auditor to do external audit according to AML/CTF compliance. The company had to raise around $30 million through SPP. The company had already raised funds through the $200 million private placement of 7,017,544 fully paid common shares at a price of $28.50 per share to US based technology investor Coatue Management.
On the other hand, the company in November had reported Underlying sales of $1 billion, which was the highest monthly performance since the company had started and led to the total underlying sales of $3.7 billion in the first five months of FY2020.
Further, the company had added 0.5 million new customers in November, which means the company has added more than 22,000 new customers per day on its platform in November.
As a result, the company’s active customers stood at more than 6.6 million at the end of November. The company has also reported 160% rise in the Underlying sales to over $160m on Black Friday and Cyber Monday (BFCM) of 2019 versus BFCM days in 2018.
Group Performance for The Month November 2019 (Source: Company’s Report)
On 13 February 2020, APT last traded at $38.560, slipping by 0.13 percent from its last close. Also, APT stock has risen 32.27% in three months as on February 12th, 2020.
EML Payments Ltd (ASX: EML)
Signed agreement with NSW Health:
EML Payments Ltd (ASX: EML), formerly known as Emerchants Limited, that provides payment card technology, mobile & virtual solutions of prepaid financial card products and services for gaming payouts, government disbursements, healthcare reimbursements etc.
The company has recently signed a deal along with an entity NSW Health, who will deliver branded General Purpose Reloadable card programs intended for employee Salary Packaging. The initial term of this agreement is for five years, however there is an option for it to get extended by a further two years. EML projected that NSW Health will be able to transition about 49k employees that will be taking part in salary packaging to an EML program.
Furthermore, EML is currently the biggest provider of payment solutions to the Salary Packaging space as it already is having more than 185k benefit accounts in the market. After signing the contract with NSW Health, EML can offer services to more than 300,000 benefit accounts by April 2022.Total annual GDV for the salary packaging vertical is anticipated to be about $2.3 billion once this transition, and the programs that are currently in transition, gets completed.
On 13 February 2020, EML last traded at $5.500, rising by 0.548 percent from its last close. Meanwhile, EML stock has risen 25.75% in three months as on February 12th, 2020.
Openpay Group Ltd (ASX: OPY)
Strong Performance in First Half 2020 & January, Outlook for FY 2020:
Openpay Group Ltd (ASX: OPY), offers Software-as-a-Service (SaaS) for online shopping of apparels, beauty, garden, home, automotive, health, etc.
On February 11th, 2020, the company for the first half 2020 has reported 73% growth in the revenue to $8.4 million on the prior corresponding period.
During the period, OPY has reported the operating expenses of $28.4 million, which also includes some amount of significant one-off cost that are IPO related expenses, consultant expenses and investments in its growth. The company has recently achieved a milestone after signing an agreement with major Australian retailer, Woolworths Group for its new business-to-business (B2B) platform, Openpay For Business.
The company has done significant investments in this portal to launch its B2B platform and in its corporate infrastructure in the UK. Moreover, the company for fiscal 2020, projects Earnings Before Tax to be in the range of ($35-40m).
Additionally, January 2020 been a strong month for growth, as the company posted 86% increase in the Total Transaction Value (TTV) for the month to $15.7m, and 58% rise in the revenue to $1.9m. The Company’s cash and liquidity stood at $46.3 million at the end of January 2020.
In addition, the company has not yet used its existing debt facility and secured the second facility of $25 million, which means the company has funding facility of total value of $75m to underpin the anticipated growth. The company is also having talks with multiple number of financiers for getting additional facilities that will help in offshore growth.
On 13 February 2020, OPY last traded at $1.395, rising up by 3.333 percent from its previous close. Also, OPY stock has risen 3.85% in one month as on February 12th, 2020.
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