{"id":11520,"date":"2021-02-23T20:11:10","date_gmt":"2021-02-23T20:11:10","guid":{"rendered":"https:\/\/economicherald.net\/?p=11520"},"modified":"2021-02-23T20:11:10","modified_gmt":"2021-02-23T20:11:10","slug":"bnpl-is-25pc-fundamentals-75pc-hype-but-these-2-asx-fintechs-could-be-trading-under-the-radar","status":"publish","type":"post","link":"https:\/\/economicherald.net\/?p=11520","title":{"rendered":"BNPL is \u201925pc fundamentals, 75pc hype\u2019, but these 2 ASX fintechs could be trading under the radar"},"content":{"rendered":"

The BNPL hype-train has been in full swing to start the year, with some more red-hot price action in recent weeks.<\/a><\/p>\n

The brakes were applied (somewhat) yesterday,<\/a> with some sharp falls across the sector. But February has also given rise to some booming price gains at the smaller end of the ASX fintech space.<\/p>\n

Mooning stock prices<\/a> have been accompanied by some aggressive activity in equity capital markets, with two payments platforms \u2014 Cirralto (ASX:CRO)<\/a> and IOUpay (ASX:IOU)<\/a> completing share placements of $18m and $50m respectively.<\/p>\n

BNPL leader Afterpay (ASX:APT)<\/a> listed in 2016 with a market cap of $125m and it\u2019s now a $40bn company, so you can\u2019t blame investors in their search for the next fintech small cap to go large.<\/p>\n

But to cut through the noise, Stockhead<\/em> caught up this week with Dean Fergie from Cyan Investment Management, to gauge how he\u2019s assessing some of the red-hot price action.<\/p>\n

BNPL hype <\/h2>\n

As an early APT investor, Fergie knows scalable fintech can be a big profit winner. <\/p>\n

But BNPL (among others) has run \u201cway too hot\u201d.<\/p>\n

\u201cTo be fair, I could have been saying that for the last six months so you\u2019re never going to pick these things exactly\u00a0right,\u201d he said.<\/p>\n

\u201cThe fact is if you\u2019ve got a couple of businesses that have captured the market. There isn\u2019t going to be a next\u00a0one, just like no one\u2019s going to be the next\u00a0Facebook or Google. You kind of win the category or you don\u2019t, so I think looking to pick the next\u00a0one is a dangerous game to play.\u201d<\/p>\n

Despite the influx of new players, Fergie said sector valuations are reflective of their own momentum \u201crather than underlying fundamentals\u201d.<\/p>\n

\u201cOver the the long term that\u2019s\u00a0what the market comes back to. Right now this is 25 per cent fundamentals and 75 per cent hype.\u201d<\/p>\n

But as a veteran fintech investor, Fergie knows the attributes of the sector which include scalability and low customer acquisition costs.<\/p>\n

With that in mind, he highlighted two stocks in the Cyan<\/a> portfolio that so far haven\u2019t been caught up in the hype surrounding other fintech sectors.<\/p>\n

Quickfee (ASX:QFE)<\/a><\/h2>\n

After listing in 2019 at 20c per share, QFE has made a steady start to listed life without the booming returns of some other fintech players.<\/p>\n

At yesterday\u2019s close of 40c, the stock is trading at a discount to its post-COVID highs of around 80c last August.<\/p>\n

The company\u2019s offer is \u201csort of like BNPL for professional services\u201d, Fergie says.<\/p>\n

QFE\u2019s target market is comprised of accounting and law firms, for whom they absorb client bills up-front in return for a transaction fee (similar to BNPL).<\/p>\n

The service providers can smooth out cash-flows and remove the need to chase up debtors, while QFE offers a range of repayment options including pay-by-instalments. But the BNPL hype hasn\u2019t reached Afterpay levels just yet.<\/p>\n

\u201cIt\u2019s fair to say they\u2019re not getting the traction that BNPL players are getting in the retail market, so the performance there hasn\u2019t been as good as we expected so far,\u201d Fergie said.<\/p>\n

\u201cThe share price has stalled a bit, and they did a deal with (BNPL company) Splitit (ASX:SPT)<\/a> that hasn\u2019t taken off like people expected.\u201d<\/p>\n

\u201cBut I think there\u2019s every chance it could capture the market\u2019s attention. If you look at (other BNPL stocks) they\u2019ve had big runs, then decline then run hard again. So I think it\u2019s in the right space where it could take off if they start getting a bit of traction in the US.\u201d<\/p>\n

QFE\u2019s target market is in the US, where it deployed funds from a $17.5m share placement in October to roll out new a BNPL product targeted at an expanded addressable market of other services firms (not just accounting and law), and beef up its executive team.<\/p>\n

The fintech company\u2019s half-year results to December 31 showed it booked revenue growth of 22pc to $4.5m, with a net loss after tax of $2.9m and $30.5m cash in the bank.<\/p>\n

Raiz Invest (ASX:RZI)<\/a><\/h2>\n

The micro investing platform gives customers simple exposure to listed investment products such as ETFs in return for a flat monthly investment fee.<\/p>\n

In Stockhead\u2019s<\/em> expert roundup heading into Christmas, Fergie flagged RZI as one of his top picks for the year ahead.<\/a><\/p>\n

And so far he\u2019s been proven right, as shares in the company rose nine per cent yesterday to close at $1.90 after finishing 2020 at 94.5c.<\/p>\n

\u201cWe think that micro-investing category is really exciting,\u201d Fergie says.<\/p>\n

\u201cAs the market runs and with interest rates close to zero, no one\u2019s getting a return on money in bank and they\u2019re looking for places to invest.\u201d<\/p>\n

\u201cAnd it\u2019s not exciting to open up some kind of balanced trust through an advisor \u2014 you want something you can get on your phone that gives you instant gratification where you can see returns. And that\u2019s where platforms like Raiz I think are going to kill it in the marketplace.\u201d<\/p>\n

Momentum in RZI\u2019s share price picked up in February, after the company reported January numbers which showed active customers increased by 9.5 per cent in the month.<\/p>\n

Active customers are a key metric for the business, because they pay a flat monthly fee that provide the platform with stable revenue growth.<\/p>\n

\u201cEveryone\u2019s favourite pastime is the stock market right now and there\u2019s a lot of new trading platforms (coming to market),\u201d Fergie said.<\/p>\n

\u201cBut those transaction-based models tend to be volatile. There are periods where the market\u2019s crazy and periods where it\u2019s not doing much.\u201d<\/p>\n

\u201cAt least with Raiz you\u2019ve got management fees on an FUM (funds under management) basis, plus monthly account keeping fees and I don\u2019t think you\u2019re going to have the same volatility in the underlying business model. <\/p>\n

\u201cThe other thing I like about a business like that is it\u2019s so transparent. For example in January you\u2019ve got 376k active accounts, multiply\u00a0that by monthly account fee and that\u2019s your return.\u201d<\/p>\n

Fergie also discussed the fintech company\u2019s efforts to expand its service into south-east Asia, where it flagged strong growth in its December results.<\/p>\n

\u201cThe banking systems are less developed there, not as many customers are banked so you\u2019ll never get penetration that you can here. But the overall size of the markets are much bigger so if they can get a foothold in Malaysia and Indonesia\u00a0it\u2019s a whole other growth leg, so I think it\u2019s got an exciting future.\u201d<\/p>\n

The post BNPL is \u201925pc fundamentals, 75pc hype\u2019, but these 2 ASX fintechs could be trading under the radar<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

The BNPL hype-train has been in full swing to start the year, with some more red-hot price action in recent weeks. The brakes were applied [more…]<\/a><\/p>\n","protected":false},"author":0,"featured_media":11521,"comment_status":"","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-11520","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"\nBNPL is \u201925pc fundamentals, 75pc hype\u2019, but these 2 ASX fintechs could be trading under the radar - Economic Herald<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/economicherald.net\/?p=11520\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"BNPL is \u201925pc fundamentals, 75pc hype\u2019, but these 2 ASX fintechs could be trading under the radar - Economic Herald\" \/>\n<meta property=\"og:description\" content=\"The BNPL hype-train has been in full swing to start the year, with some more red-hot price action in recent weeks. The brakes were applied [more...]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/economicherald.net\/?p=11520\" \/>\n<meta property=\"og:site_name\" content=\"Economic Herald\" \/>\n<meta property=\"article:published_time\" content=\"2021-02-23T20:11:10+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=11520#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=11520\"},\"author\":{\"name\":\"\",\"@id\":\"\"},\"headline\":\"BNPL is \u201925pc fundamentals, 75pc hype\u2019, but these 2 ASX fintechs could be trading under the radar\",\"datePublished\":\"2021-02-23T20:11:10+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=11520\"},\"wordCount\":1147,\"publisher\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=11520#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/economicherald.net\\\/wp-content\\\/uploads\\\/2021\\\/02\\\/fintech-stocks-U0uwpb.jpeg\",\"articleSection\":[\"Finance\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=11520\",\"url\":\"https:\\\/\\\/economicherald.net\\\/?p=11520\",\"name\":\"BNPL is \u201925pc fundamentals, 75pc hype\u2019, but these 2 ASX fintechs could be trading under the radar - Economic Herald\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=11520#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=11520#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/economicherald.net\\\/wp-content\\\/uploads\\\/2021\\\/02\\\/fintech-stocks-U0uwpb.jpeg\",\"datePublished\":\"2021-02-23T20:11:10+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=11520#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/economicherald.net\\\/?p=11520\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=11520#primaryimage\",\"url\":\"https:\\\/\\\/economicherald.net\\\/wp-content\\\/uploads\\\/2021\\\/02\\\/fintech-stocks-U0uwpb.jpeg\",\"contentUrl\":\"https:\\\/\\\/economicherald.net\\\/wp-content\\\/uploads\\\/2021\\\/02\\\/fintech-stocks-U0uwpb.jpeg\",\"width\":1200,\"height\":675},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=11520#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/economicherald.net\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"BNPL is \u201925pc fundamentals, 75pc hype\u2019, but these 2 ASX fintechs could be trading under the radar\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/economicherald.net\\\/#website\",\"url\":\"https:\\\/\\\/economicherald.net\\\/\",\"name\":\"Economic Herald\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/economicherald.net\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/economicherald.net\\\/#organization\",\"name\":\"Economic Herald\",\"url\":\"https:\\\/\\\/economicherald.net\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/economicherald.net\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/economicherald.net\\\/wp-content\\\/uploads\\\/2023\\\/10\\\/cropped-cropped-economicheraldlogo-1.png\",\"contentUrl\":\"https:\\\/\\\/economicherald.net\\\/wp-content\\\/uploads\\\/2023\\\/10\\\/cropped-cropped-economicheraldlogo-1.png\",\"width\":850,\"height\":760,\"caption\":\"Economic Herald\"},\"image\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/#\\\/schema\\\/logo\\\/image\\\/\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"BNPL is \u201925pc fundamentals, 75pc hype\u2019, but these 2 ASX fintechs could be trading under the radar - Economic Herald","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/economicherald.net\/?p=11520","og_locale":"en_US","og_type":"article","og_title":"BNPL is \u201925pc fundamentals, 75pc hype\u2019, but these 2 ASX fintechs could be trading under the radar - Economic Herald","og_description":"The BNPL hype-train has been in full swing to start the year, with some more red-hot price action in recent weeks. The brakes were applied [more...]","og_url":"https:\/\/economicherald.net\/?p=11520","og_site_name":"Economic Herald","article_published_time":"2021-02-23T20:11:10+00:00","twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"6 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/economicherald.net\/?p=11520#article","isPartOf":{"@id":"https:\/\/economicherald.net\/?p=11520"},"author":{"name":"","@id":""},"headline":"BNPL is \u201925pc fundamentals, 75pc hype\u2019, but these 2 ASX fintechs could be trading under the radar","datePublished":"2021-02-23T20:11:10+00:00","mainEntityOfPage":{"@id":"https:\/\/economicherald.net\/?p=11520"},"wordCount":1147,"publisher":{"@id":"https:\/\/economicherald.net\/#organization"},"image":{"@id":"https:\/\/economicherald.net\/?p=11520#primaryimage"},"thumbnailUrl":"https:\/\/economicherald.net\/wp-content\/uploads\/2021\/02\/fintech-stocks-U0uwpb.jpeg","articleSection":["Finance"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/economicherald.net\/?p=11520","url":"https:\/\/economicherald.net\/?p=11520","name":"BNPL is \u201925pc fundamentals, 75pc hype\u2019, but these 2 ASX fintechs could be trading under the radar - Economic Herald","isPartOf":{"@id":"https:\/\/economicherald.net\/#website"},"primaryImageOfPage":{"@id":"https:\/\/economicherald.net\/?p=11520#primaryimage"},"image":{"@id":"https:\/\/economicherald.net\/?p=11520#primaryimage"},"thumbnailUrl":"https:\/\/economicherald.net\/wp-content\/uploads\/2021\/02\/fintech-stocks-U0uwpb.jpeg","datePublished":"2021-02-23T20:11:10+00:00","breadcrumb":{"@id":"https:\/\/economicherald.net\/?p=11520#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/economicherald.net\/?p=11520"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/economicherald.net\/?p=11520#primaryimage","url":"https:\/\/economicherald.net\/wp-content\/uploads\/2021\/02\/fintech-stocks-U0uwpb.jpeg","contentUrl":"https:\/\/economicherald.net\/wp-content\/uploads\/2021\/02\/fintech-stocks-U0uwpb.jpeg","width":1200,"height":675},{"@type":"BreadcrumbList","@id":"https:\/\/economicherald.net\/?p=11520#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/economicherald.net\/"},{"@type":"ListItem","position":2,"name":"BNPL is \u201925pc fundamentals, 75pc hype\u2019, but these 2 ASX fintechs could be trading under the radar"}]},{"@type":"WebSite","@id":"https:\/\/economicherald.net\/#website","url":"https:\/\/economicherald.net\/","name":"Economic Herald","description":"","publisher":{"@id":"https:\/\/economicherald.net\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/economicherald.net\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/economicherald.net\/#organization","name":"Economic Herald","url":"https:\/\/economicherald.net\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/economicherald.net\/#\/schema\/logo\/image\/","url":"https:\/\/economicherald.net\/wp-content\/uploads\/2023\/10\/cropped-cropped-economicheraldlogo-1.png","contentUrl":"https:\/\/economicherald.net\/wp-content\/uploads\/2023\/10\/cropped-cropped-economicheraldlogo-1.png","width":850,"height":760,"caption":"Economic Herald"},"image":{"@id":"https:\/\/economicherald.net\/#\/schema\/logo\/image\/"}}]}},"_links":{"self":[{"href":"https:\/\/economicherald.net\/index.php?rest_route=\/wp\/v2\/posts\/11520","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/economicherald.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/economicherald.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/economicherald.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11520"}],"version-history":[{"count":0,"href":"https:\/\/economicherald.net\/index.php?rest_route=\/wp\/v2\/posts\/11520\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/economicherald.net\/index.php?rest_route=\/wp\/v2\/media\/11521"}],"wp:attachment":[{"href":"https:\/\/economicherald.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11520"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/economicherald.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11520"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/economicherald.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11520"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}