Afterpay Touch Group Limited

APT Details

Conversion of 2.4 million options to ordinary shares:Afterpay Touch Group Limited (ASX: APT) is a fin-tech payments company based in Australia. APT recently issued 2.4 million shares at a price of A$0.20 per share upon the exercise of 2.4 million options earlier issued to the senior executives.

In its recent announcement, the company declared that its underlying sale for 1H19 was above $2.2 billion with a rise of 140% over pcp. It has further, progressed formal documentation with two major US banks for a total facility size of up to $300 million which is expected to be completed in 2H19.


FY18 financial highlights (Source: Company Reports)

Over the past three years, the top line of the company has grown at a CAGR of 745.58%. During FY18, the company reported negative margins along with negative ROE. The company has favourable debt structure with debt/equity ratio of 0.88x. Further, it reported a current ratio of 6.56x, above the industry median of 2.37x.

Over the last one-year period, APT has generated a positive return of 103.76%. Today, the stock was marginally up by 0.064% as compared to the previous close, currently trading at the price of level $15.720. The Relative Strength Index along with the Bollinger bands indicates a bearish signal. With the growing top line, favourable debt as well as liquidity position along with a new facility in the pipeline, we have a ‘wait and watch’ view on the stock at the current market price of $15.720.


APT Daily Chart (Source: Thomson Reuters)
 

Splitit Payments Ltd

SPT Details

Improving financials:Splitit Payments Ltd (ASX: SPT) is a fin-tech payments company based in Israel. It offers interest-free instalment payment solutions. It got listed on ASX on 29 Jan 2019. The company issued 60 million shares at a price of $0.20 per share which were oversubscribed.

For Q4 CY18, it reported an increase of 117% in total active merchants (175), an increase of 293% in total number of unique shoppers (30,000), 269% increase in quarterly underlying merchant transaction ($8.618 million) and 241% increase in quarterly merchant fees ($124,000) as compared to Q4 CY17.


Q4 CY18 highlights (Source: Company Reports)

After got listing on ASX, the company now has approx. 269.656 million shares, ~39.344 million options and 18 million performance rights outstanding.

It reported pro-forma net assets of $9.977 million for 1H18. The top line of the company had grown by 203.56% in 1H18. It reported an unaudited net loss of $1.24 million in 1H18 which improved from the net loss of $1.962 million in 1H17.
The market cap of SPT is about $102.47 million. It was listed at $0.32 at a premium of 60%, and today, the stock was up by 69.737%, currently trading at $0.645. With the growing top line and improving margins and recent listing on ASX, we have a watch view on the stock at the current market price of $0.645, and we suggest to investors that they should wait for a few more trading sessions to get the better outlook of the company.


SPT Daily Chart (Source: Financial Times)

Zip Co Limited

Z1P Details

New project to launch in Feb end:Zip Co Limited (ASX: Z1P) is a fin-tech payments company based in New South Wales, Australia. It provides retail finance solutions to small and medium enterprises. The company announced its 2Q19 updates today with a surge in revenue by 28% on a q-o-q basis. The record transaction volume went up by 117% on a y-o-y basis with an increase in customer numbers by 20% as compared to Q1 FY19.


1H19 financial highlights (Source: Company Reports)

The company commenced a pilot project in December 2018 which is expected to launch by February 2019 end. The company expects to announce a new funding structure by Q4 FY19 which will provide greater scale at a lower cost.
Over the past five years, the top line of the company has grown at a CAGR of 150.75%. During FY18, the company reported negative margins along with negative ROE. It reported a higher buyback yield of 6.6% as compared to the industry median of 1.2%indicatingthe stock to be attractively priced.

During the past six months, Z1P has generated a positive yield of 23.28% and is trading at $1.135 with a dip of 2.575% today. On the technical analysis front, the stock price is currently trading above the Simple Moving Average line of the Bollinger band. With the improving financials, stock being attractively priced and new funding structure to be announced soon, we, therefore, maintain our “Hold” recommendation on the stock at the current market price of $1.135.


Z1P Daily Chart (Source: Thomson Reuters)
 

EML Payments Limited

EML Details

The Launch of payment cards in New Jersey:EML Payments Limited (ASX: EML) is a fin-tech company based in Australia. The company offers innovative financial technology for pay-outs, gifts, incentives or rewards, and supplier payments. It has recently launched a branded payment card system in New Jersey with PointsBet USA Inc. On 4 July 2018, the company acquired 74.86% interest in Perfectcard DAC (Perfectcard) which is expected to generate EBTDA of $400k – $600k in the FY 2019.


FY18 Highlights (Source: Annual Report)

Over the past 5 years, the top line of the company has grown at a CAGR of 92.43%. Although the margins of the company have improved but are still below the industry medians. During FY18, the company reported an EBITDA and Net margin of 20.7% and 3.1% respectively as compared to the industry median of 28.0% and 11.2% respectively.

Over the last one-year period, the stock has generated a negative yield of 26.80%. Today, the stock was up by 0.704% as compared to the previous close, currently trading at the price of level $1.430. The Relative Strength Index along with the Bollinger bands also reflects a neutral position. With improving margins and higher growth potential through the acquisition ofPerfectcardalong with the launch of payment card in New Jersey, we maintain our ‘speculative buy’ on the stock at the current market price of $1.430.


EML Daily Chart (Source: Thomson Reuters)
 

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