HMY - Harmoney Corp Limited

[Rawz]

I would call it a promising result. Turning the lending tap off after covid first hit our shores (a mistake in hindsight) really slowed the book growth for FY21. Looks like the chairman took the blame for the com com fine? The new chairman has strong regulatory knowledge..

The marketing spend in Aussie has been (as expected) quite high:
$7.8M for originations of AUS$120m
vs NZ of $8.6m for originations of NZ$318.9m.

Marketing spend to originations ratio is 6.5% for Aussie and 2.7% for NZ.. only natural that the Aussie ratio will fall in line with that of NZ overtime.

Employee expenses up an incredible 42%. Put down to new developers for the launch into Aussie.

Gee the Aussie side of the business really is sucking up the cash. Guess that is how you get 75% originations growth from Q3 to Q4.. The old saying you got to spend money to make money comes to mind.

Impairment expense to loan portfolio has improved from 4.8% FY20 to 3.9% FY21. This for me is the most important thing. If they can keep fine tuning the libra scorecard so that the ratio drops lower and lower that will be a huge competitive advantage. This combined with an automated loan application system and the banks will continue to bleed the A+ consumer credit customers. A good target would be impairment expense to drop below 2% of the portfolio and fully automated end to end loan applications over 80%.

As long as the book rapidly grows and impairment expense ratio drops all is well, seems simple aye.
It will mean the automation is working and the libra scorecard is working.
The rest will fall into line, the cost of funds will fall, marketing expense ratio will fall, employee expense ratio will fall etc because of economies of scale etc.

One last note, they highlight fintech and all this customer financial data they hold. Not sure how that can be used with new products but data is quite valuable in this world. Think I read they hold more financial data than any fintech in Aussie? Did I read that? That would mean more than afterpay? That's cool.

[KJMLimited]

I suspect the AU cost of loans compared to loans written will drop to the NZ cost over time. Libra has been used in NZ for a while now but as long as AU. There's also more repeat loans in NZ and these are the cheap ones. Less of those in AU but that's because the AU book is still full of first time borrowers.

[Rawz]

Should get Q1 trading update next week.

Not sure how the lockdowns will impact the results.

To continue the growth it would be good to see ~$140m originations and $520m loan book.

[whatsup]

Should get Q1 trading update next week.

Not sure how the lockdowns will impact the results.

To continue the growth it would be good to see ~$140m originations and $520m loan book.

R, fingers crossed, bought sub $2 so hope Im on a good horse here for a long term hold!!

[Rawz]

R, fingers crossed, bought sub $1 so hope Im on a good horse here for a long term hold!!

I assume you mean $2. It looks like the chart is levelling off. Was hard to pick an entry point since the slide down from listing price $3.75. I took 4 bites of the cherry. Two under $2 and two over $2. Slightly underwater at the moment. Ah well all will be fine as long as they keep putting runs on the board. HMY (imo) is one of those stocks that currently has lots of upside SP potential vs a disproportionately smaller downside SP risk.

[whatsup]

I assume you mean $2. It looks like the chart is levelling off. Was hard to pick an entry point since the slide down from listing price $3.75. I took 4 bites of the cherry. Two under $2 and two over $2. Slightly underwater at the moment. Ah well all will be fine as long as they keep putting runs on the board. HMY (imo) is one of those stocks that currently has lots of upside SP potential vs a disproportionately smaller downside SP risk.

Yeh $2 correct, brain fade, I concur with your understanding, one for the patient imo

[whatsup]

Apparently Jardens have done a indepth investment research on Harmoney,

[Rawz]

Apparently Jardens have done a indepth investment research on Harmoney,

Anyone have an executive summary of it? Would be keen to know their thoughts.

[whatsup]

Anyone have an executive summary of it? Would be keen to know their thoughts.

Try phoning them , they can only say NO , could be a yes also.

[dabsman]

Key Q1 FY22 highlights:
* Largest quarter of new originations in the Company’s history
* Australian new customer originations grow to A$31 million, up 885% versus pcp and up 17% on Q4 FY21
* Group proforma loan book reaches $517 million, yielding a net interest margin of >11% and net lending margin of >7%
* Australian receivables book grows to A$155 million, up 58% on pcp and up 15% on Q4 FY21
* Improvement in key lead indicators of account acquisition, new loan originations and net lending margin set to drive increases in receivables and revenue growth in current and future financial years through Harmoney’s 3Rs consumer-direct model
* Significant improvement in credit performance with 90+ days arrears at 47 basis points (June 21: 69 bps)
* Achieved breakeven on proforma Cash NPAT on existing loan book demonstrating value from automation and scalability of Harmoney’s 100% consumer-direct model

Break even What a story the last 2 quarters are showing