Peppermint Innovation Limited

PIL Details

Peppermint Innovation Limited (ASX: PIL) engages in developing and commercialization of mobile banking, payments, and remittance business with operations in the Philippines.

Subdued Operating Performance for the Year Ended 30 June 2021 (FY21)

• The revenue stood at $1.94 million in FY21, down 31% YoY and net loss stood at $2.83 million in FY21, increased by 67% YoY.
• Cash balance at the end of the period stood at $3.12 million. No dividends were recommended during the period.
• The company increased number of registered bizmoto agents to 55,218, bizmoGo riders to 636 and Merchants to 688.
• Raised $3,405,000 via capital raisings. Additionally raised $1,865,000 from shareholders exercising options.

Income Statement (Source: Company Reports)

Outlook: 

The company is focused on operational expansion by targeting a sales marketing campaign for bizmoto platform. Recently, launched bizmoProtect - a micro-insurance product with the partnership of Cebuana Lhuillier Insurance Solutions that could positively impact the company's financial performance. In addition, the company's bizmoPay service is expected to provide its 55,000+ registered bizmoto agents, network members and enterprise platform partners with a safe and seamless means of micro loans to grow their enterprises.

Key Risks: 

The company is prone to credit risks and has prudent credit policies in place to mitigate the risk. However, its activities may expose it to multiple financial risks in the future: market risk (including currency risk and fair value interest rate risk), credit risk, liquidity risk and cash flow interest rate risk.

Stock Recommendation: 

The company has delivered a 1-month and 6-month return of ~+33.33% and ~-33.33%, respectively. Moreover, the stock is trading lower than the average of the 52-week high price of $0.044 and the 52-week low price of $0.01. The company intends to continue to develop its four business divisions via organic growth and strategic acquisitions. However, looking at the dismal performance of FY21, investors should book profit in the stock.

Considering the facts above, current trading levels, and the critical risks associated with the business, we recommend a ‘Sell’ rating on the stock at the current market price of $0.019 (Time: 3:16 PM (GMT+10), Sydney, Australia) as of 26^th October 2021.

Technical Overview:

Daily Price Chart

Source: REFINITIV, Note: Purple color line reflects Relative Strength Index (14-Period) 

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 on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

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