{"id":11536,"date":"2021-03-30T19:25:28","date_gmt":"2021-03-30T19:25:28","guid":{"rendered":"https:\/\/economicherald.net\/?p=11536"},"modified":"2021-03-30T19:25:28","modified_gmt":"2021-03-30T19:25:28","slug":"why-asia-is-the-honeypot-for-asx-fintechs","status":"publish","type":"post","link":"https:\/\/economicherald.net\/?p=11536","title":{"rendered":"Why Asia is the honeypot for ASX fintechs"},"content":{"rendered":"

Among sectors with post-COVID tailwinds, a number of ASX-listed fintechs have become investor favourites over the past 12 months.<\/p>\n

While BNPL (buy now, pay later) has the highest profile, there are now multiple competitors building out their business models across B2B payments, consumer finance and investing.<\/p>\n

In view of that, assessing which companies have the capacity to stand out means cutting through the noise to look for unique attributes that provide a durable competitive advantage.<\/p>\n

To help, Stockhead<\/em> caught up this week Terence Clee, who\u2019s had a front row seat to some of the latest activity in the space in his role as an advisor to several ASX fintechs.<\/p>\n

A lawyer by trade, Clee has also been working in capital markets for the last 10 years and in 2020, he struck out on his own with the launch of Clee Capital.<\/p>\n

As a corporate advisor, one of Clee\u2019s big wins in the sector is Malaysia-based BNPL platform IOUpay (ASX:IOU)<\/a>.<\/p>\n

With the company laying its platform for growth last year, Clee got clients involved in the business when it was trading at just 1.5c per share.<\/p>\n

Skip forward to February this year, and with momentum building IOUpay closed a huge $50m share placement at 50c per share \u2013 representing a gain of more than 3,000 per cent from June 2020 trading levels.<\/p>\n

A key part of IOUpay\u2019s value proposition is that it has boots on the ground in its core Malaysian market, where key members of its executive team are leveraging their long-term client relationships in the local banking and finance sector<\/p>\n

To Clee, that kind of competitive advantage will be crucial as the sector matures.<\/p>\n

\u201cWe spotted an opportunity in BNPL, but in my view there\u2019s just too many players in the market,\u201d he told Stockhead<\/em>.<\/p>\n

\u201cThe sector needs to consolidate. Some companies are doing great things but some aren\u2019t doing much at all.\u201d<\/p>\n

\u201cI think the big guys like Afterpay (ASX:APT)<\/a> will continue to do well. It\u2019s the mid-tier guys in no man\u2019s land with high valuations that aren\u2019t really doing anything \u2013 that\u2019s where the risk is.<\/p>\n

Clee contrasted that against IOUpay, which he says has a \u201cunique selling proposition in south-east Asia\u201d.<\/p>\n

Clee said it\u2019s a similar story for Peppermint Innovation (ASX:PIL)<\/a>, the multi-channel payments platform operating in its core target market of the Philippines.<\/p>\n

PIL relisted on the ASX in February and is currently trading above 4c per share, after Clee Capital advised on an off-market $2.5m share placement in December priced at 1c.<\/p>\n

And more broadly, Clee said south-east Asia represents a huge addressable market for ASX fintechs in the years ahead.<\/p>\n

Taken in aggregate, the six largest companies in the region have a combined population of almost 600 million people.<\/p>\n

In addition, research from consultant group Bain shows banking rates in the region are still only at 50 per cent, compared to around 95 per cent for the US and UK.<\/p>\n

With an addressable market of around 300m underbanked consumers, digital services in the region are forecast to generate at least $US38bn in annual revenues by 2025.<\/p>\n

\u201cIt\u2019s a huge market, so as an investor you have to ask \u2013 who\u2019s really establishing a dominant market footprint there?\u201d, Clee says.<\/p>\n

\u201cIf you take a company like IOUpay, they\u2019ve got a razor sharp focus on that (Malaysian) market and that\u2019s where you\u2019ve got to have something like actual connections on the ground.\u201d<\/p>\n

And after showing the \u2018Midas touch\u2019 with some of its recent fintech investments, Clee Capital is focused on more sector opportunities in the months and years ahead.
\n\u00a0
\nAt Stockhead, we tell it like it is. While IOUPay and Peppermint Innovation are Stockhead advertisers, they did not sponsor this article.<\/p>\n

The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead.<\/strong><\/em><\/p>\n

Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.<\/strong><\/em><\/p>\n

The post Why Asia is the honeypot for ASX fintechs<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Among sectors with post-COVID tailwinds, a number of ASX-listed fintechs have become investor favourites over the past 12 months. 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