HMY-Harmoney

[Hectorplains]

Smack on the wrist time, late 3Ys.  Tisk tisk... More importantly it'd be nice to see a director buy on market rather than just highly discounted 'incentive plan' pick ups.

Well slap me silly(ier) - While I was posting the above, Mr Roberts was doing exactly that.    

[Hectorplains]

Humming along nicely. 

FY24 outlook reaffirmed
1Q24 Net interest margin 9.0%, down slightly on 4Q23 (9.2%)
Predicting significant NPAT growth from 2H24 onwards - target 20% ROE FY25

[Hectorplains]

Only thing better than one director buying...yup, two.

[lorraina]

1. Financial assistance was provided by the Company in respect of a total of 119,729 Shares (the
Relevant Shares).
2. A total consideration of AU$58,701.43 was paid by the Company for the on-market purchase of
the Relevant Shares.
3. The financial assistance was provided for the benefit of David Stevens and Neil Roberts, each
an employee and executive director of the Company, and each entitled to receive some of the
Relevant Shares in accordance with the Plan.
4. The nature of the financial assistance was the payment by the Company of the on-market
purchase price for the Relevant Shares.

[Hectorplains]

1. Financial assistance was provided by the Company in respect of a total of 119,729 Shares (the
Relevant Shares).
2. A total consideration of AU$58,701.43 was paid by the Company for the on-market purchase of
the Relevant Shares.
3. The financial assistance was provided for the benefit of David Stevens and Neil Roberts, each
an employee and executive director of the Company, and each entitled to receive some of the
Relevant Shares in accordance with the Plan.
4. The nature of the financial assistance was the payment by the Company of the on-market
purchase price for the Relevant Shares.

Thank you for the clarification. 

[Forrestdun]

Almost 50% gain in 5 days is always good.

Disc hold

[Plata]

Will be interesting to see if sentiment changes or if this is just a sneeze and it will plummet back down. Been eyeing getting into this one. Seems I was too late.

[Hectorplains]

Will be interesting to see if sentiment changes or if this is just a sneeze and it will plummet back down. Been eyeing getting into this one. Seems I was too late.

True true!  Long way to the surface for me on this one...Nice to see some green days ☘️☘️☘️

[Hectorplains]

Will be interesting to see if sentiment changes or if this is just a sneeze and it will plummet back down. Been eyeing getting into this one. Seems I was too late.

Sentiment has not changed... it's the usual drift back down that follows the small spike from each positive announcement.  This has become predictably tradable. 

[Forrestdun]

Borrowed from the other one.

This from For Bar this morning.

Harmoney Corp (HMY.AX) is Australasia's largest online direct personal lender. Its innovative online lending platform utilises comprehensive data insights, AI and machine learning to price and approve loans automatically, providing accessible and efficient financing at competitive rates. HMY's disruptive tech-driven platform, and its recently completed transition from a peer-to-peer platform to a diversified funding structure, position it well for growth as we approach an inflection point in the economic cycle, with interest rates set to decline. We expect HMY to capture market share from slow-moving and constrained incumbents in the significant ~A$159bn Australasian personal lending market, aided by the rollout of its Stellare® 2.0 lending platform opening new market segments and driving greater user conversion. Given its highly scalable tech platform, we are excited by the potential for HMY to generate significant operating leverage as it grows its loan book, driving the cost-to-income ratio down from an already impressive ~24% to ~17% by FY34. Near-term economic weakness presents a headwind for HMY, and we forecast a contraction in cash profit to A$0.9m in FY24 and a normalised loss of -A$3.3m (see Appendix 1: Explaining 'normalised' and 'cash' NPAT). However, we are attracted to the long-term growth potential and operating leverage opportunity, reflected in our spot valuation of A$1.27.
link
NZX Code   HMY
Share price   A$0.59
Spot Valuation   A$1.27
Risk rating   High
Issued shares   102.0m
Market cap   A$59.6m
Avg daily turnover   37.1k (A$16k)




link
Financials: Jun/   23A   24E   25E   26E
Rev (A$m)   105.5   123.2   135.4   156.1
NPAT* (A$m)   0.2   (3.3)   1.9   8.2
EPS* (Ac)   0.2   (3.2)   1.9   8.1
DPS (Ac)   0.0   0.0   0.0   0.0
Imputation (%)   0   0   0   0
*Based on normalised profits





link
Valuation (x)   23A   24E   25E   26E
PE   n/a   n/a   30.8   7.2
EV/EBIT   n/a   n/a   n/a   n/a
EV/EBITDA   n/a   n/a   n/a   n/a
Price / NTA   0.5   0.5   0.5   0.6
Cash div yld (%)   0.0   0.0   0.0   0.0
Gross div yld (%)   0.0   0.0   0.0   0.0









Laying the platform for the next stage of growth


Founded in NZ in 2013, HMY has since expanded into Australia and completed a transition to a diversified funding structure. Integrating technology into the direct-to-consumer model has streamlined processes, reduced operational costs, and driven efficiencies. Since its 2020 ASX IPO, HMY has grown its loan book to A$756m. With its funding model and next-generation lending platform, Stellare® 2.0, launching into the market, HMY is poised for continued growth over the next decade.

Navigating a path to best in sector returns after a challenging macroenvironment


HMY is on a trajectory of growth and increasing core profitability. However, rising interest rates have dampened borrower demand and a lift in incurred losses is likely to squeeze margins this year. Expansion of the loan book, technical innovation, and a discernible cost-to-income ratio reduction exemplify the company's drive for operational efficiency, sustainable long-term ROE, and growth.

[Cookie]

"Its innovative online lending platform utilises comprehensive data insights, AI and machine learning to price and approve loans automatically"

Sounds like they jumped on the AI bandwagon. But something to note, they are at massive disadvantage to the big banks or a reasonable sized banks when it comes to automation and machine decision making. Banks have access to a massive amounts of data i.e bank transactions to help perfect this. And they need it. It is certainly considered the holy grail.

Harmoney's loan impairment rate is at 30%. Consider a lender that operate in a similar space, Latitude Finance, their impairment rate is 13%. At this level of impairment they must be lending out at a whole lot(albelt poor quality) and perhaps it s a key reason why they packaged up their borrowings and shifted it off their balance sheet. Anyhow the impairment rate is massive and I would have serious concerns with their internal processes.

Like Flavour Flav said. Don't believe the hype.

 

[lorraina]

Incurred losses: Incurred losses ranging between a forecast of 4.2% in FY24 and 3.6% in terminal year. Management is targeting
incurred losses of between 3% to 4% of the loan book over time.

[Scooter]

"Its innovative online lending platform utilises comprehensive data insights, AI and machine learning to price and approve loans automatically"

Sounds like they jumped on the AI bandwagon. But something to note, they are at massive disadvantage to the big banks or a reasonable sized banks when it comes to automation and machine decision making. Banks have access to a massive amounts of data i.e bank transactions to help perfect this. And they need it. It is certainly considered the holy grail.

Harmoney's loan impairment rate is at 30%. Consider a lender that operate in a similar space, Latitude Finance, their impairment rate is 13%. At this level of impairment they must be lending out at a whole lot(albelt poor quality) and perhaps it s a key reason why they packaged up their borrowings and shifted it off their balance sheet. Anyhow the impairment rate is massive and I would have serious concerns with their internal processes.

Like Flavour Flav said. Don't believe the hype.

 

Sorry can you elaborate on their impairment rate of 30%.
I have not seen anything to suggest such a crazy number

[Cookie]

Sorry can you elaborate on their impairment rate of 30%.
I have not seen anything to suggest such a crazy number

I based the figures off the interest income. Corresponds to 3-4% rate on the loan book that Percy mentioned.
Latitude Finance charged a similar range of rates to Harmoney, yet there impairment rate is significantly lower. It should be comparable. So I have a big question mark regarding their process.

FYI CCP has a higher impairment rate for their loan book. However they benefit from this as they are also a credit collection agency.

[lorraina]

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02776305-2A1506899