IOUpay Limited (ASX: IOU)

IOU works in providing financial technology and digital commerce software solutions. With the use of mobile technology, it provides mobile banking, digital payments and digital services to the banks in Malaysia, and telecommunications and corporates in Malaysia and Indonesia. It also operates with telecommunication network providers to give mobile over-the-top (OTT) services. Its market capitalization stood at AUD 99.25 million as of 13^th January 2022.

Operational Updates: As per the 1^st December 2021 update, after satisfying the one remaining Condition Precedent (CP), the company has now satisfied all the conditions related to first tranche of third-party consent from one of its banking partners “I-Destinasi Sdn Bhd (IDSB). The balance 50% of the investment of ~RM 63 million in Second Tranche is due within the next six months.

Financial Top & Bottom Line: As per its quarterly report (1QFY22) released on 29^th October 2021, the company reported the sales receipts from customers as ~AUD 1.96 million in 1QFY22, with a total cash outflow from operating activities as ~AUD 7.71 million. Out of ~2,588 merchants signed, ~2,311 merchants onboarded contributing an increase of ~182% in 1QFY22 from 4QFY21. On the other hand, out of ~16,999 consumer downloads it recorded an increase of ~968% in its consumer activated accounts to ~4,806 in total accounts activated. A total of ~AUD 6.57 million of Total Transaction Value (TTV), along with ~AUD 0.49 million Net Transaction Revenue was witnessed during the quarter. For its FY21, a total revenue of ~AUD 7.19 million was recorded with a total loss of ~AUD 4.79 million. Its closing cash balance for the first quarter was ~AUD 39.52 million at the end of 30^th September 2021 as compared to ~AUD 51.41 million at the end of 30^th June 2021.

Technical Analysis:  IOU prices broke the downward sloping trend line by upside and the prices are sustaining above the same from past one week. Prices are now trading near to its 21-period SMA on a monthly chart and the prices might cross it in the coming period. RSI (14-period) is hovering at ~40.388 on a monthly chart that seems supportive for the stock. Immediate support level is ~AUD 0.155 while immediate resistance level is ~AUD 0.220.

With a view of growing numbers in its 1QFY22 results, current trading levels and its technical analysis, the investors with a high-risk appetite might consider a ‘Speculative Buy’ position, incorporating the support and resistance as one of the tools while analysing the investment opportunity. The stock was analysed as per the current price of AUD 0.180, as of 13^th January 2022, 12:20 PM (GMT+10), Sydney, Eastern Australia. However, the risk levels are extremely high considering the volume of customers and merchants in punts in coming future.

Weekly Daily Technical Chart – IOU

Source: REFINITIV 

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest. 

The Green colour line reflects the 21-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period, then it shows prices are currently trading in a bullish trend, (Vice – Versa).

The Blue colour line reflects the 50-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 50-period, then it shows prices are currently trading in a bullish trend, (Vice – Versa).

The Yellow colour line represents the Trendline.

The Purple colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

Disclosure: IOUpay Limited (Company) is a client of Kalkine Media Pty Ltd (Kalkine Media), an affiliate of Kalkine. However, under no circumstances have Kalkine or its related entities been, directly or indirectly influenced in making any related insights concerning Company as contained in this report, and no form of compensation is or will be received by Kalkine, Kalkine Media or Kalkine’s other related entities for the publication of this report.

Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.

Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.

You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.

The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.

Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website unless those persons comply with certain safeguards, procedures, and disclosures.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.