Three Fintech Stocks to Consider this Investing Season- KSL, MOE and AEF

  • Jul 26, 2019 AEST
  • Team Kalkine
Three Fintech Stocks to Consider this Investing Season- KSL, MOE and AEF

Financial Technology or Fintech is a wave of transformation in the financial industry, as technology takes a toll over every aspect of the business world. It refers to the amalgamation of financial services and products with technological advancements. The financial sector has been catalysed through technology with the availability of cheaper and faster services, efficiency and effectivity. Concepts of Robo-advisors, virtual payment options, blockchain and cryptocurrencies and digital wallets are part of this revolution.

In this article, we would look at the updates and stock performances that investors need to browse through, before they try their luck at the booming fintech stocks, that are listed and traded on the Australian Securities Exchange.

                                             Kina Securities Limited (ASX: KSL)

Company Profile: Aspiring to build the bank of the future by investing in technology to cater towards customer experience, Kina Securities Limited (ASX: KSL) is a Diversified financial services provider, providing digital banking solutions in Papua New Guinea (PNG). With headquarters in Sydney, KSL was listed on the ASX in 2015. The bank is tagged as the fastest growing bank in PNG region, voted the Most Innovative Business 2018 and is the only dual listed financial services company in PNG (on both ASX and POMSoX).

The KSL Landscape (Source: KSL’s Annual Report) 

Annual General Meeting: On 21 May 2019, KSL conducted its AGM, notifying that the full year dividend was A$9.0 cents per share or PGK22.1 toea per share. The significant acquisition of ANZ PNG’s Retail, Commercial and SME businesses, which is progressing well and is likely to complete in September 2019, along with the transfer of all retail branches, ATMs and EFTPOS terminals is expected to lift the company’s earnings and profitability and contribute towards better returns and liquidity.

On the financial end, the company’s NPAT stood at PGK 48.1 million for the December 2018, driven by the strong USD correspondent banking relationship. Customers were up by 25 per cent (21,000), deposits grew by 29 per cent (PGK 1.3 billion) and loans and advances were up by 20 per cent (PGK 851.7 million).

Fu Shan Investments (Hong Kong) Ltd, a major stakeholder of KSL, sold its stake of 34.94 per cent in June 2018, resolving the escrow shareholding, widening the investor base and easing liquidity. Besides this, KSL’s FX income grew by a whopping 373 per cent and the market share was up to 10 per cent for the full year.

Enhancement of technology: In 2018, KSL automated systems and processes to improve efficiency, apart from working towards the implementation of a brand new e-switching capability, which would aid in service scheme card issuing and acquiring, management of an extended ATM fleet and provide EFTPOS services.

Outlook: For 2019, GDP growth is expected to be good with the IMF forecasting a growth rate of 3.2 per cent, with increased forex flows and reserves. New resource projects are progressing to Final Investment Decisions with construction most likely to commence in 2020. A fall in broadband prices is anticipated with the increase in bandwidth of the international submarine fibre optic cable and a domestic cable.

Stock Performance: On 26 July 2019, KSL’s stock was at A$1.435 on ASX, up by 0.35 per cent. With a market capitalisation of A$234.51 million and ~163.99 million outstanding shares, the annual dividend yield of the stock is 5.35 per cent. In the last one, three and six months, KSL’s stock has generated returns of 5.15 per cent, 25.99 per cent and 38.16 per cent, respectively.

                                              Moelis Australia Limited (ASX: MOE)

Company Profile: A financial services group specialising in equities, corporate advisory and asset management, Moelis Australia Limited (ASX: MOE) was launched in 2009 as a JV with NYSE-listed Moelis & Company and has raised over $7 billion in equity capital markets. Presently, it has more than $3.7 billion in assets under management.

Annual General Meeting: On 2 May 2019, MOE conducted its AGM and stated that 2019 was the company’s tenth year of operations. In FY18, MOE added close to 40 full time employees across the group, while investing in proprietary technology platforms in its Asset Management business, which contributed EBITDA of $52.5 million in 2018, up by 48 per cent on pcp.

On the financial end, MOE’s revenue for 2018 stood at $136.3 million, up by 27 per cent on pcp and the EBITDA was $57.5 million, up by 38 per cent on pcp. The EBITDA margin grew to 42 per cent from 39 per cent and the NPAT was recorded at $39.3 million, up by 35 per cent. As a result of these financials, MOE paid a dividend to shareholders of 8 cents per share, up 14 per cent on pcp.

The revenue on the Corporate Advisory & Equities division was $51.5 million for 2018. Net assets were recorded at $241 million ($85 million of cash). Further, AUM was forecasted to be approximately $3.9 billion by 30 June 2019.

Also, MOE had presented its FY18 results in February this year. The below image provides the highlights from the same:

MOE’s FY18 Highlights (Source: MOE’s Report) 

Stock Performance: On 26 July 2019, MOE’s stock closed the market session, at A$3.85 on ASX, up by 3.495 per cent. With a market capitalisation of A$578.98 million and ~155.64 million outstanding shares, MOE’s stock has generated negative returns of 2.11 per cent, 14.68 per cent and 14.48 per cent in the last one, three and six months, respectively.

                                  Australian Ethical Investment Limited (ASX: AEF)

Company Profile: Agitating for a change, Australian Ethical Investment Limited (ASX: AEF) is an ethical investment group with its ethical charter guiding Australians in their investments since 1986 and providing wealth management products. AEF invests in companies which have a positive impact on people, animals and the planet as a whole. Listed on ASX in 2002, the company’s registered office is in Sydney.

Quarterly FUM: On 18 July 2019, AEF released its Quarterly FUM from 1 April to 30 June 2019, which was up by 9.2 per cent to $3.42 billion. The same as on 31 March 2019 was $3.13 billion. Over the year, FUM was up by 21 per cent to $3.42 billion, up from $2.82 billion as at 30 June 2018. Besides this, the superannuation membership increased by 4 per cent.

Quarterly Flow Analysis (Source: AEF’s Report) 

Stock Performance: On 26 July 2019, AEF’s stock last traded at A$2.05 on ASX, down by 0.966 per cent from its prior close. With a market capitalisation of A$232.03 million and ~112.09 million outstanding shares, AEF’s stock has generated a YTD return of 17.61 percent.


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