Think Before Investing in Credit Intelligence Ltd (ASX_ Ci1). All You Need to Know About Credit Intelligence Ltd
Credit intelligence is an international financial sector firm that is based in Hong Kong and has recently started operating in Australia. Credit intelligence is leading in the debt restructuring and personal insolvency management sectors in Australia. It also provides other financial services such as
- Bankruptcy administration services
- Personal loans
- Individual voluntary arrangement (IVA) services
- Debt negotiation
- Business funding
- YOZO platform
A Typical Fintech Firm
In Australia, Credit intelligence is classified under the fintech sector. The fintech sector is one of the most rapidly expanding sectors in the world. In Australia the company has roughly 30 staff members, that include professional accountants and legal experts, who provide their service to the clients.
In Hong Kong, Credit Intelligence has a client base that includes top banks like HSBC, Citibank, Standard Chartered Bank and the Bank of China. Credit Intelligence entered Australia by acquiring its subsidiaries
- Chapter two holdings private limited in July 2020, for AUD 480,000.
- Chapter two holdings is a debt negotiations business, based in Sydney.
- It also provides mortgage solutions to clients facing financial difficulties.
- YOZO finance private limited in December 2020, for AUD 1.05 million.
Credit intelligence is a typical fintech sector firm. It originates from Hongkong and is present in Singapore and Australia, through its subsidiary companies that it acquired to create synergy. Let us look at the acquisitions in Australia to understand how Credit intelligence aims to grow.
The first acquisition for Credit intelligence in Australia was of Chapter Two Holdings, which as mentioned above is a debt negotiation business and it offers mortgage solutions to clients facing financial difficulties. This is simply an extension of its services being offered elsewhere. The second acquisition is more important one.
YOZO is an Australian fintech, developed by the collaboration of
- University of Sydney
- Fintech Australia
- Illion Bankstatements
YOZO is a fintech platform that utilizes artificial intelligence and machine learning to provide clients with lightning fast solutions for their funding needs. The clients simply have to provide the requisite information, YOZO platform can then put its AI to work, to calculate how much the business needs and the best and most relevant lenders available in the market.
Credit intelligence acquired a 60% stake in YOZO in December 2020. After acquiring controlling interest, Credit intelligence quickly worked on creating synergy and then used the AI-powered platform of YOZO to introduce the YOZO BNPL Platform in Hong Kong, which is aimed at providing funding solutions to SMEs in Hong Kong.
Credit intelligence now aims to use these synergies to further expand the company in both Australia and Singapore as well. What this simply means is that Credit Intelligence is going to create disruption in the Australian fintech market place in the coming future. The company is powered by AI and machine learning, which are two very trending new technologies driving the fintech sector ahead.
The stock price performance of Credit Intelligence is shown below.
It can be seen that following the news of acquisition of YOZO in December, the stock price shot up in January but soon came down to its average level of around 0.034. It can also be seen that the company did not go through any major crash during the global crash of March 2020, which was caused by the outbreak of the virus. Overall, the stock performance for Credit Intelligence has been consistent.
The company has got a market capitalisation of around 51.59 million and also pays its dividends annually. The dividend amount however is very low but this can be attributed to the losses that the company had accumulated in the past. The annual yield is around 1.47% which is low for a fintech company at the moment.
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The consistency of the stock performance can be seen by the good profitability. The chart below shows that the revenue of the company has increased continuously since 2017 and the revenue almost doubled between 2019 and 2020 going from almost AUD 6 million to over AUD 13.5 million.
The profits show a similar trend. In 2017 and 2018 the company posted net loss but this quickly turned around in 2019 when the company recovered previous losses and posted a net profit of around AUD 0.5 million and this figure rose exponentially in 2020 to reach AUD 2.53 million.
From whatever information is publicly available about Credit Intelligence, it seems that it is a good company to bet upon right now. The company seems to be warming up its engine, it has come out of losses and the revenue is showing a good trend of continuous increase year on year. One very important factor is that there is aggressive intent coming from the executive board. The recent acquisitions and synergy creation to offer fintech based solutions developed in Australia, to clients in Hong Kong shows that the executive board has got big plans for future.
If the company continues to expand and acquire other startups at this rate, then we should expect Credit Intelligence to become a major player in the Australian fintech space in the coming years.
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