HMY - Harmoney Corp Limited

[Ferg]

The company just needs to deliver EARNINGS. So I hope management are sensible - don't chase unprofitable growth - and show and deliver what the platform can do.

My pick for positive NPAT is second half of FY23, assuming the required tailwinds eventuate.

[Muse]

My pick for positive NPAT is second half of FY23, assuming the required tailwinds eventuate.

According to management they’ve already achieved NPAT profitability

https://www.nzx.com/announcements/386137

You might take issue with cash npat? Its a fair question, though I did follow up on those adjustments in some detail a few pages ago

[Rawz]

$4... just imagine. The club would be popping the Champagne!! One day..

Yes cash npat achieved with a $550m loan book. HMY SP goes down 10% since announcement.

Plenti finally announce cash npat achieved with a $1.1b loan book. PLT SP goes up 10% since announcement.

Wrong.. just wrong.

Also Plenti say they will generate $97m revenue off its $1.1b book.
Harmoney will generate $100m revenue off its $650m book (rawz FY22 est).

Plenti valued at au$209m
Harmoney valued at au$161m

HMY clearly has the better business model and generates more.. its like 2+2= fish

[jimdog31]

$4... just imagine. The club would be popping the Champagne!! One day..

Yes cash npat achieved with a $550m loan book. HMY SP goes down 10% since announcement.

Plenti finally announce cash npat achieved with a $1.1b loan book. PLT SP goes up 10% since announcement.

Wrong.. just wrong.

Also Plenti say they will generate $97m revenue off its $1.1b book.
Harmoney will generate $100m revenue off its $650m book (rawz FY22 est).

Plenti valued at au$209m
Harmoney valued at au$161m

HMY clearly has the better business model and generates more.. its like 2+2= fish

I think Fiorland moose nailed it when he said its the sentiment thats causing the depression of HMY.

Insiders and instos arent selling that I can tell. Just retail that keeps the price down.

I have a massive overweight position in SKT (embarassingly so!) and this was purely based on reading the tea leaves that the business model had turned a corner but the sentiment at retail was overwhelmingly negative.

That has paid off so far, and has been driven by sophisticated investors recognising the same thing and mopping up retail at times.

I’m not going to go so far as saying harmoney is SKY but you can see some interesting correlations

content/finance aggregator
old model transitioning to a new
regulatory hurdles
poorly timed cap raise/IPO
entering new markets (broadband,streaming / aus)
New markets are entered utilising scale

It takes a while for the retail market to recognise that a model has transitioned to a more profitable/growth future.

Anybody reading the tea leaves from their announcements can see this model is transitioning/growing much faster than the market realises.

This depressed price is actually good news as far as I’m concerned!

I aim to build a similar sized overweight position in HMY over the next year or so.

Happy With VP spot 😂

[Rawz]

7 figure!?! Omg you might be taking that president position from FM at the next election lol

[jimdog31]

7 figure!?! Omg you might be taking that president position from FM at the next election lol

*dependent on what happens over at SKT and provided this stock stays <$2

[jimdog31]

7 figure!?! Omg you might be taking that president position from FM at the next election lol

A moose is a much better Masthead than a Jimdog

[Snoopy]

$4... just imagine. The club would be popping the Champagne!! One day..

Yes cash npat achieved with a $550m loan book. HMY SP goes down 10% since announcement.

Plenti finally announce cash npat achieved with a $1.1b loan book. PLT SP goes up 10% since announcement.

Wrong.. just wrong.

Also Plenti say they will generate $97m revenue off its $1.1b book.
Harmoney will generate $100m revenue off its $650m book (rawz FY22 est).

Plenti valued at au$209m
Harmoney valued at au$161m

HMY clearly has the better business model and generates more.. its like 2+2= fish

I have just inspected the 'Plenti' HY2022 presentation, and make the following observations:

1/ Plenti are heavily promoting motor vehicle finance. As Percy has told us, consumers need to keep up their motor vehicle payments above all others: No car, no job. A high quality place for a second tier financer to have their loan book.

2/ Plenti are tapping into government subsidies for renewable energy.

e.g. Continued delivery of the both the S.A. Home Battery Scheme and NSW Empowering Homes Program pilot– We have paid over $70m of subsidies to S.A. households, in addition to our lending, supporting installation of over 175MW of energy storage.

3/ Plenti are set to combine their experience in 1 and 2 to become the leading funder of Electric vehicles, a market that is only just starting in Australia.

4/ The Plenti arm that most closely resembles Harmoney is 'consumer finance'. Slide 18 shows the 90 day default rate of 0.26%, verses 0.47% for Harmoney.

Harmoney generates more profit on $100m worth of loans that Plenti, but clearly they are taking grater risks doing that. Is it any wonder that the market gives a higher relative rating to Plenti in times of uncertainty?

SNOOPY

[jimdog31]

I have just inspected the 'Plenti' HY2022 presentation, and make the following observations:

1/ Plenti are heavily promoting motor vehicle finance. As Percy has told us, consumers need to keep up their motor vehicle payments above all others: No car, no job. A high quality place for a second tier financer to have their loan book.

2/ Plenti are tapping into government subsidies for renewable energy.

e.g. Continued delivery of the both the S.A. Home Battery Scheme and NSW Empowering Homes Program pilot– We have paid over $70m of subsidies to S.A. households, in addition to our lending, supporting installation of over 175MW of energy storage.

3/ Plenti are set to combine their experience in 1 and 2 to become the leading funder of Electric vehicles, a market that is only just starting in Australia.

4/ The Plenti arm that most closely resembles Harmoney is 'consumer finance'. Slide 18 shows the 90 day default rate of 0.26%, verses 0.47% for Harmoney.

Harmoney generates more profit on $100m worth of loans that Plenti, but clearly they are taking grater risks doing that. Is it any wonder that the market gives a higher relative rating to Plenti in times of uncertainty?

SNOOPY

Valid Points Snoops, although 0.26 on a larger loan book works out similar to 0.47 on a lower value loan book. But I take your point.

[jimdog31]

I have just inspected the 'Plenti' HY2022 presentation, and make the following observations:

1/ Plenti are heavily promoting motor vehicle finance. As Percy has told us, consumers need to keep up their motor vehicle payments above all others: No car, no job. A high quality place for a second tier financer to have their loan book.

2/ Plenti are tapping into government subsidies for renewable energy.

e.g. Continued delivery of the both the S.A. Home Battery Scheme and NSW Empowering Homes Program pilot– We have paid over $70m of subsidies to S.A. households, in addition to our lending, supporting installation of over 175MW of energy storage.

3/ Plenti are set to combine their experience in 1 and 2 to become the leading funder of Electric vehicles, a market that is only just starting in Australia.

4/ The Plenti arm that most closely resembles Harmoney is 'consumer finance'. Slide 18 shows the 90 day default rate of 0.26%, verses 0.47% for Harmoney.

Harmoney generates more profit on $100m worth of loans that Plenti, but clearly they are taking grater risks doing that. Is it any wonder that the market gives a higher relative rating to Plenti in times of uncertainty?

SNOOPY

Page 31 of the presentation for Plenti

1H21 1H22
Payments to suppliers and employees (13.3) (33.5)

Their overall costs of lending seem to greatly increase with scale....

Commentary: "Payments to suppliers exceeds P&L expenses primarilydue to cash broker commission which are a alsotreated under the EIR method"

Leading to net cash outflow for the half

Net operating cash flow 2.2 (4.3)

So yes automotive & renewables are a big area of the business, but that part seems to have some commissions that appear to be paid out up front that aren't included in the P&L!

This area of the business is also susceptible to increased competition which can lead to increased commissions.....

Also page 23 from the presentation

• Significant growth in originationsrelative to employee costs, ourmajor cost line

They are trumpeting the fact that employees haven't grown sizably in relation to their originations, but I'd hazard a guess that's because they are relying more on broker network for their loan originations.

Also, it appears they are still engaging in p2p lending?


All in all, I'll take Harmoney's lean/direct approach I think.