HMY - Harmoney Corp Limited

[winner69]

Not sure it is quite right to put out an announcement involving a comparison to a period impacted by a 1 in 100 year event and claiming this year's numbers are therefore a great success... but all about the headline, improving 'the story' and feeling good.

On a separate note, I'm still trying to figure out what makes HMY special as all I see is a finance company - it certainly isn't the first one to use fancy pictures and certainly (selected) big numbers.

I didn't want to question the timing of this ---- with the share price collapsing

[Rawz]

Aussie did $28m in new originations last qrt.
Based on April doing $11.5m you would think they will do say $35m in this qrt ending 30 June. That's qrt on qrt growth of 25%

Growth rates like that would mean they would hit their $1b in annual Aus loan originations within 2 and a bit years.

It will be interesting to see how the new scorecard goes in NZ when it is released.

The only thing to keep an eye on will be the arrears rate. If they stay low with the new scorecard then Harmoney will have a magic bullet and be ahead of the competition. With NIM of 10% its worth a look.

Disc. I bought a few last week

[Rawz]

On a separate note, I'm still trying to figure out what makes HMY special as all I see is a finance company - it certainly isn't the first one to use fancy pictures and certain (selected) big numbers.

Most of the banks still use employees to do the credit risk assessment on personal loans. Then they have employees that generate loan documents and process them.

Harmoney have a scorecard (Libra 1.7) that does the credit assessment, i.e. a computer says yes or no. Harmoney computer then generates the loan documents for the customer to complete which are then submitted back to Harmoney online. Less friction. Less employee cost. Faster etc. Fintech some would say.

The value of Harmoney is in the data of their scorecard. After processing 1000's of 1000's of applications they can have a very good idea of the likelihood of a default from a non home owner, male, tradie, in his 20's vs a homeowner, female, office worker in her 30's. And price the loan 15% vs 8%.. you get the idea.

If Harmoney gets it right they will make lots of money and end up growing to a decent loan book size of $1b to $2b. This is when one of the main banks will want to buy them for their scorecard I am thinking.

[KJMLimited]

It's the tech behind the loan originations this the point of difference. It leads to more and better quality loans, at lower cost. Their rivals can't match it.

[KJMLimited]

Bang on Rawz

[trader_jackson]

Most of the banks still use employees to do the credit risk assessment on personal loans. Then they have employees that generate loan documents and process them.

Harmoney have a scorecard (Libra 1.7) that does the credit assessment, i.e. a computer says yes or no. Harmoney computer then generates the loan documents for the customer to complete which are then submitted back to Harmoney online. Less friction. Less employee cost. Faster etc. Fintech some would say.

The value of Harmoney is in the data of their scorecard. After processing 1000's of 1000's of applications they can have a very good idea of the likelihood of a default from a non home owner, male, tradie, in his 20's vs a homeowner, female, office worker in her 30's. And price the loan 15% vs 8%.. you get the idea.

If Harmoney gets it right they will make lots of money and end up growing to a decent loan book size of $1b to $2b. This is when one of the main banks will want to buy them for their scorecard I am thinking.

Okay, I wasn't really comparing Harmoney to a Bank... so what is the significant diffrentiater between Harmoney and other finance companies... say Latitude Financial, Liberty Financial, Pepper Money, Prospa Group (and the list goes on, but can start with those ones) - all of these ones are claiming they are a fintech (for part of their business/to some extent or another and do fancy stuff with computers to minimize expenses and improve their data score cards etc)

[Rawz]

Okay, I wasn't really comparing Harmoney to a Bank... so what is the significant diffrentiater between Harmoney and other finance companies... say Latitude Financial, Liberty Financial, Pepper Money, Prospa Group (and the list goes on, but can start with those ones) - all of these ones are claiming they are a fintech (for part of their business/to some extent or another and do fancy stuff with computers to minimize expenses and improve their data score cards etc)

Latitude or GEM a good competitor. I am not sure about the others- they're more into mortgages but I get your point. I mention the banks because they own the market.

It's all going to come down to who can approve and drawdown the loans the quickest/ easiest with as little human interaction as possible and as little arrears as possible. That may seem simple or obvious but when you look at any company its often a bit of that.

Certainly this is far away from backing the truck up territory.. for me its about 2% of my portfolio. Imo its worth a look. Looking forward to the next qrt update.

[Scrunch]

Wow
I would not have thought announcing a 1% monthly growth in receivables from $485m to $490m would have caused a 16% increase in the share price (a circa $30m increase in market cap). If $37.8m of new loans does that, would have $30m caused declining receivables, or are they quoting loans granted but not drawn down?

[winner69]

Wow
I would not have thought announcing a 1% monthly growth in receivables from $485m to $490m would have caused a 16% increase in the share price (a circa $30m increase in market cap). If $37.8m of new loans does that, would have $30m caused declining receivables, or are they quoting loans granted but not drawn down?

So the headlines worked

+800% and CAGR 100% really huge numbers

[nztx]

Wow
I would not have thought announcing a 1% monthly growth in receivables from $485m to $490m would have caused a 16% increase in the share price (a circa $30m increase in market cap). If $37.8m of new loans does that, would have $30m caused declining receivables, or are they quoting loans granted but not drawn down?

How about further unwinding of Covid-19 Provisioning - was that separately disclosed in latest announcement

We know that brought things positive in earlier reports (just)

Lower borrowing costs maybe helping things on existing & expanding lending book ?

No indication of bottom line or guidance on forwards nuts & bolts financials in latest was there ?