Change Financial Limited

CCA Details

Obtained PCI DSS Certification: Change Financial Limited (ASX: CCA) is developing a digital banking platform for peer-to-peer transfers and other day-to-day banking tools. It has a market capitalisation of ~A$ 12.36 Mn as on 30^th September 2019. CCA announced that it has successfully completed the build of its innovative payments and card issuing platform marking a key milestone for the company, and the stock skyrocketed by 332% on the announcement day, i.e., 30 September 2019, and made a another 52-week high of $0.545. As per the release, the company has received a PCI DSS certification, and Central Bank of Kansas City, which is US banking partner of the company, has formally registered CCA as a Mastercard payments processor. CCA is the first payment and card issuing platform completed in the last 5 years and second in the last 20 years, after Marqeta Inc.

The card issuing platform of the company has been designed and built as the new standard for innovative payments and card issuing. Its payments infrastructure enables the banks and the businesses to develop, customize, and roll out innovative payment solutions under their own brand. The company’s innovative payments and card issuing platform include features such as (1) Program Dashboard, (2) Data Insights Dashboard, (3) API Connectivity, (4) Dynamic Controls, (5) Banking as a Service, (6) Mastercard Processor.

In another update, the company announced that it has issued 19,105,122 convertible notes with a face value of $0.10 per note. The objective behind the issue of convertible notes is to repay all outstanding monies owed to 31 August 2019 under the debt facility provided by Altor Capital. The following picture provides an idea of the financial results for the year ended 30^th June 2019:


FY19 Income Statement (Source: Company Reports)

What to Expect:CCA aims to provide its potential institutional clients more innovative transaction processing than some of the incumbent providers. It is also targeting to leverage learning from its consumer business and would offer a turn-key mobile banking solution to those banks and institutions lacking technology capabilities and mobile strategies.

As per the release dated 30^th September 2019, the company stated that with the completion of Change payments and card issuing platform, it will start to migrate customers over from the ChimpChange program to the new brand and platform UpChange.It added that the planning for the migration has been happening over the past months and CCA has leveraged its experience from previous program migrations. It anticipates that the ChimpChange program would be formally terminated in Q1 CY20. It is working on numerous functionalities and initiatives that it would roll out after the launch of its platform with its first customer. It was also mentioned that onboarding of the first customer is expected to begin in the month of October 2019.

Stock Recommendation:The company has numerous contracts and agreements with several partners and providers including but not limited to CBKC (Central Bank of Kansas City), Mastercard, ATM networks, card fulfilment houses, chargeback and dispute service providers and data centres.

Coming to the stock’s performance, it produced returns of 115.52% and 155.10% in the time period of one month and three months, respectively. As per ASX, the stock of CCA made a 52-week high of $0.545 on 30 September 2019. Considering the aforesaid facts, we are of the view that majority of the positive factors have been discounted at the current juncture. Hence, we suggest investors to book profit and recommend a “Sell” rating on the stock at the current market price of A$0.540 per share (up 332% on 30^th September 2019).


CCA Daily Technical Chart (Source: Thomson Reuters)

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