HMY - Harmoney Corp Limited

[Rawz]

Lending money to people unsecured is a recipe for disaster regardless of the interest rate charged.

I think their business model is fundamentally flawed so wouldn't be an investor at any price.

Really? One of your fav's (Heartland) do unsecured lending up to $100k. Yes to businesses, but majority of them are small 'mum and dad' businesses. No financials required as well. So same as Harmony, the computer scores the application and gives a yes or no.

Harmony is miles ahead of the banks and finance companies by the looks of it- for personal loans. Their website and application process looks really good- i took the application process as far as i could before actually submitting it.

Harmony is 100% on my watch list. I just thank the share market gods that I didn't participate in the IPO as was fully invested elsewhere. Including at the time Heartland so felt I was invested anyway. And now with the shocking performance of the share price its hard to pick an entry point. Especially when looking at Baa Baa's graph, could well go below $2

[Beagle]

Pretty sure my client who borrowed $100K needed to submit the financials' I'd prepared for him for the last few years and had to sign a personal guarantee as well as fill out a full application including statement of financial position. He has a good house so if things go wrong its certain the personal guarantee will see HGH right. I will ask him more details next time we have a chat.

If I remember correctly this floated on a massive PE...what could possibly go wrong and you mention the TA which looks absolutely horrendous.
Give it a few years and lets see if there's any profit in this business model. I am deeply skeptical.

[Rawz]

Harmoney has to meet the CCCFA regulations so its the same. Full financial position entered into the application. And the borrower is guaranteeing the loan, i.e. personal guarantee. If they default goodbye their credit rating.

From what I can see Harmoney is going to beat the banks in the personal loan space. You can borrow much more, it's 100% online, quicker approvals. It's all going to come down to their credit scorecard. And whoever gets in first will have the best data.

I'm pretty sure ANZ is still manually assessing personal loans which is laughable, not to mention far more costly when compared to a computer.

[nztx]

Pretty sure my client who borrowed $100K needed to submit the financials' I'd prepared for him for the last few years and had to sign a personal guarantee as well as fill out a full application including statement of financial position. He has a good house so if things go wrong its certain the personal guarantee will see HGH right. I will ask him more details next time we have a chat.

If I remember correctly this floated on a massive PE...what could possibly go wrong and you mention the TA which looks absolutely horrendous.
Give it a few years and lets see if there's any profit in this business model. I am deeply skeptical.

Yes AU $3.50 issue price or around NZD 3.70 / 3.75

From prospectus (page 98) :

Pro forma Historical NPAT

2018 FY (LOSS 6.4 Million)
2019 FY (LOSS 6.1 Million)
2020 FY (LOSS 6.99 Million)

Forecast:

4 Mths to Oct 20 Forecast Proforma SURPLUS 1.2 Million

[KJMLimited]

The business model is robust. It's just a question of valuation. Of course it looks expensive, as they make no profit. As for TA, with 4 months data to work off, how meaningful is that approach? Audited accounts are due Early next week plus a forecast (there was only a 1 month forecast in the IPO) so more to work off. Maybe. But there's nothing wrong with the business model. Let's not forget either that the guys behind it have been there done that in the personal lending market in Oz.

[Beagle]

Yes AU $3.50 issue price or around NZD 3.70 / 3.75

From prospectus (page 98) :

Pro forma Historical NPAT

2018 FY (LOSS 6.4 Million)
2019 FY (LOSS 6.1 Million)
2020 FY (LOSS 6.99 Million)

Forecast:

4 Mths to Oct 20 Forecast Proforma SURPLUS 1.2 Million

The first question I would ask as a former auditor is were bad and doubtful debts properly provisioned in those 4 months ? Nobody ever puts lipstick on a pig just to get the float done and dusted do they

[Baa_Baa]

The business model is robust. It's just a question of valuation. Of course it looks expensive, as they make no profit. As for TA, with 4 months data to work off, how meaningful is that approach? Audited accounts are due Early next week plus a forecast (there was only a 1 month forecast in the IPO) so more to work off. Maybe. But there's nothing wrong with the business model. Let's not forget either that the guys behind it have been there done that in the personal lending market in Oz.

The share price speaks for itself as the market values the company. Sentiment is not good, that can’t be ignored by an investor. There’s no point in saying fundamentals suggest such and such when the market says no. Like who would invest into a loss making company with share price performance that is so poor? I think it will go lower from here but am only an observer, no stake in this charade.

[Scrunch]

Lending money to people unsecured is a recipe for disaster regardless of the interest rate charged.

I think their business model is fundamentally flawed so wouldn't be an investor at any price.

It all depends on the customer base you are attracting and often there is little to no visibility on this unless you are inside the outfit in question. Many years ago I worked in for one of the big banks in their credit card area. This is unsecured lending but it was very profitable business unit. In the right circumstances unsecured lending can work well.

[nztx]

The first question I would ask as a former auditor is were bad and doubtful debts properly provisioned in those 4 months ? Nobody ever puts lipstick on a pig just to get the float done and dusted do they

Yes good points there too

Let's look at the presented figures from the same page:

(a) Impairment Expense:

FY 2018: $ 14.2 million
FY 2019: $ 17.4 million
FY 2020: $ 24.4 million

4 Mth to Oct 2019: $ 6.2 million

Forecast 4 Mth to Oct 2020 $ 6.1 million

(b) Movement in Expected Credit Loss provision:


FY 2018: $ 2.8 million
FY 2019: $ 3.9 million
FY 2020: $ 8.3 million

4 Mth to Oct 2019: $ 1.3 million

Forecast 4 Mth to Oct 2020 $ (1.3) million RECOVERY


These are all above the Line in arriving at previous NPAT figures ..


--

Major movements between the 2019 & 2020 Oct four month periods:


(rounded to 10th's of & millions)


Interest Income -2.4 million
Other Income -0.3 million

Total Income Reduction ( - 2.7 million)

Expenses:

Interest Expenses -1.3 million
Impairment expense - 0.1 million
Cr Loss Provision - 2.6 million
Marketing expense - 1.7 million
Sharebased expense + 0.5 million
Other expenses & rounding -0.2 million


PBT 2.7 million improvement

Tax - 0.8 million increase

NPAT 1.9 million improvement

[Gerald]

The share price speaks for itself as the market values the company. Sentiment is not good, that can’t be ignored by an investor. There’s no point in saying fundamentals suggest such and such when the market says no. Like who would invest into a loss making company with share price performance that is so poor? I think it will go lower from here but am only an observer, no stake in this charade.

72% of shares in escrow so not too much liquidity even if you look at daily volumes.