What is Fintech?
Fintech or financial technology as the name suggests describes new technologies that are used for improving and also automating the application of financial services. The fintech industry is an emerging industry which competes with the traditional financial techniques through the use of technology.
In today’s scenario, the application of fintech is widespread. Mobile banking through smartphones, use of data analytics to derive credit score, etc. are the examples of fintech making inroads and directly impacting the lives of the end users.
Let’s take a look at four fintech stocks listed on ASX.
Peppermint Innovation Limited
About Peppermint Innovation Limited:
Peppermint Innovation Limited (ASX: PIL) belongs to the IT sector, and it develops new and innovative mobile phone applications. The company focuses on the commercialization and further expansion of the Peppermint Platform, which is a mobile banking, payments and remittance technology which is designed for the usage of banks, mobile money operators, the credit card companies along with the microfinance institutions.
Recently on 17 May 2019, the company announced that its mobile App - developed for the Cooperative Health Management Federation (CHMF) was launched at the annual general assembly of CHMF. CHMF comprises of 116 member cooperatives and above 41,000 members across the Philippines and has access to an established network of 447 hospitals and clinics which includes diagnostic centres and dental clinics.
With the 1st phase of the Peppermint-developed mobile App, the 41.088k members of CHMF would be able to trace accredited medical centres. They can also make appointments as well as review all of their past medical insurance records online.
In the next phase of the CHMF mobile App, there would be an option of mobile wallet, QR code payments, member to member (M2M) payments and other transactional facilities.
In Q3 FY2019, the company reported 92% growth in the cash receipts with an expectation to see further growth as the business expands. More than 12,000 Filipinos got registered with Bizmoto during the period. The largest interbank network of local and offshore banks BancNet in the Philippines joined hands with Peppermint on the provision of mobile banking technology and services.
PIL used A$0.263 million in operating activities and A$0.004 million in investing activities. The net cash inflow through the financing activities was A$0.241 million.
The estimated cash outflow for Q4 FY2019 is A$0.632 million.
Stock Performance: The shares of PIL closed at A$0.012 (17 June 2019), down by 14.286%. PIL holds a market capitalization of A$13.83 million and approximately 987.58 million outstanding shares.
Raiz Invest Limited
About Raiz Invest Limited:
Raiz Invest Limited (ASX: RZI) is the largest mobile-first financial services platform in Australia. The company is focused to building the best possible product and comprises of an outstanding team of software engineers, designers, mathematicians, financial experts, as well as marketers.
On 6 June 2019, the company provided an update regarding the active (paying) customers and total funds under management for the month of May 2019 ending 31/05/2019.
During the month, the company witnessed an increase in the customer sign ups by 2.4% to 689,601 as compared to April 2019. Investment Accounts went up from 309,167 in April 2019 to 316,849 in May 2019. The number of active customers increased by 1.1% to 192,765. Total funds under management from the retail segment increased by 2.1% to $286.65 million and from the Superannuation segment by 6.4% to $44.53 million.
On 29 May 2019, the company announced that it entered into a joint venture agreement with a subsidiary company of a top Malaysian investment institution. The joint venture agreement was signed between Raiz Invest Limited and Jewel Digital Ventures Sdn Bhd (Jewel), the subsidiary of Permodalan Nasional Berhad (PNB). The joint venture between the Raiz and Jewel is in the ratio of 70:30 respectively. Under the joint venture, Raiz would be primarily providing the technology. On the other hand, Jewel would be supporting with the required capital once the conditions are fulfilled, which includes the granting of a licence in Malaysia. Raiz Malaysia would then be a fully merged entity into Raiz Invest Limited. Further, the joint venture also highlights how both the joint venture partner will enter into a partnership in other Southeast Asian countries as well.
In the 6 June ASX release the CEO of Raiz Invest, George Lucas stated that the growth in funds under management in May 2019 along with the joint venture with Jewel indicates that the business continues to develop as per the strategic vision of the company.
Stock Performance: RZI closed at A$0.465 (17 June 2019), up by 2.198% as compared to its previous closing price. RZI holds a market capitalization of A$30.13 million and approximately 66.23 million outstanding shares.
Money3 Corporation Limited
About Money3 Corporation Limited:
Money3 Corporation Limited (ASX: MNY) is a specialist non-bank credit provider in the automotive industry.
On 28 May 2019, the company released its UBS Emerging Companies Conference presentation on ASX in which it provided its 1H and 2H FY2019 highlights, its opportunities in Australia and New Zealand, and the company’s strategy and outlook.
In 1H FY2019, there was an increase in Gross Loan Book by 14.3% to $351.9 million. The revenue from its broker division increased by 12.2% to $40.4 million as compared to its previous corresponding period (pcp). The company reported an increase of 13.2% in the Group EBITDA to $31.1 million on pcp. There was an increase in Group NPAT by 13.3% to $17.5 million.
In 2H FY2019, the company announced the acquisition of Go Car Finance in NZ which added A$54.3 million to the Secured Automotive Loan Book. It also opened new opportunities in the new region where there is a wide scope of growth. The company had more than $100 million in the form of debt and cash available for accelerating the growth of the Automotive Loan Book. The Bad debts of the company were managed well and were in the target range of 5-6 percent of the gross loan book.
The company further highlighted that Australian automotive market generates $80 billion of annual vehicle sales, with up to $20 billion annual market for consumer vehicle financing, of which $6 billion is attributed to used vehicle financing. In this market, every one out of 550 registered vehicles in Australia were being financed by the company. As per the estimation of the company, it finances 3% of the used car market annually.
In New Zealand, the used car sector is growing. NZ has the fourth highest rate of vehicle ownership globally. The low-credit rating auto finance market is relatively untapped. Go Car Finance has strong brand recognition. Thus, it opens a growth opportunity for the company.
Strategy and Outlook:
- The focus of the management is mainly on the automotive industry to pursue strong growth as well as maintaining the exceptional quality of the loan book and at the same time boosting the exceptional cash collections capability of the company.
- The company intends to pay 10c of dividend through to FY2020.
- The company expects its normalized NPAT of $35 million.
Stock Performance: The shares of MNY closed at A$2.120 (17 June 2019), down by 0.935% as compared to previous closing price. MNY holds a market capitalization of A$389.75 million and approximately 182.12 million outstanding shares.
Change Financial Limited:
About Change Financial Limited:
Change Financial Limited (ASX: CCA) is a US-focused financial technology company that is engaged in developing innovative and scalable payments technology in order to provide solutions for businesses as well as financial institutions.
Recently on 16 May 2019, the Company was being queried by ASX regarding the change in the price of the securities of the company from a low of $0.04 on 10 May 2019 to an intraday high of $0.071 on 16 May 2019. Below is the list of queries along with the responses of the company.
- The first question raised by ASX to CCA was if the company was aware of any information regarding the change in the price of the securities that is not announced in the market. In response, CCA stated that it was not aware of any information that had not been announced to the market that could have a material impact on the price and volume of the securities of the company.
- ASX also wanted to confirm if the company was complying with the Listing Rules and particularly Listing Rule 3.1. CCA confirmed that it complies with all the listing rules and particularly 3.1.
Stock Performance: The shares of penny stock CCA closed at A$0.038 (17 June 2019), down by 11.626% as compared to its previous day’s price. CCA holds a market capitalization of A$4.25 million and approximately 98.84 million outstanding shares.
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