As a local resident at where this company operates, I am here to...

As a local resident at where this company operates, I am here to shed some light on this underpriced stock.

First of all, from the macro point of view, the local economy is poised to rebound and burgeon. This is proven by its unfolding recovery plan to gradually lift the business operating restrictions. The government anticipates that most states will move into Phase 4 or the final phase of the National Recovery Plan (PPN) by October at the earliest, with no retreat back to the previous phases. (The Edge Market, 26 July 2021).

Also, the other impetus to the economy recovering is the skyrocketing vaccination rate would boost domestic consumption imminently. Vaccination rate is boosting since early July 2021. As of 30 July, 40% of its population has been vaccinated and the population with completed vaccination is close to 20% of the population. According to the daily vaccination rate 100% of the population would receive their first dose of vaccine by 8 September 2021, and 100% of the population is expected to complete 2 doses of vaccination by 2 November. Not to mention, the vaccination rate would be expedited with the walk-in vaccination to commence on 2 August 2021. (The Star, 31 July 2021)

However, the domestic purchasing power has been reduced significantly by the Covid-19 pandemic. The mean monthly salaries and wages fell by 9% in 2020 — the first decline since the series began in 2010 (Department of Statistic Malaysia, 14 July 2021). As such, the BNPL service of IOUPay is the godsend to the domestic economy because the reduced purchasing power requires demand for stretched ringgits, and BNPL caters perfectly to that demand. By allowing the consumers to purchase by instalment and the merchants to gain immediate cash flow in full, IOUpay is definitely assisting both parties at their sore points.

Aside from the right-on-the time service, there is also a huge company growth potential to be unleashed. By comparing its performance in June and July, the TTV and net revenues tripled, nearly doubling the number of activated merchants accounts and consumer account activations.

This momentum is expected to escalate due to the huge gap between the number of merchants onboarded and active merchants(i.e. 84% of onboarded merchants are yet to be activated in the system9, due to the expected removal of more lockdown and restrictions on business operations as mentioned above. In addition, this momentum would be further amplified by the untapped merchant base from its strategic partnership. As of 23 July 2021, the activated merchant accounts are only 0.15% of the merchant base available from the strategic partnership. In other words, there are 99% of the potential merchant base to be tapped into.

With the right service being delivered to the economy at the right time, does the market price it correctly at just around 20 cents? The share price has dropped more than 70% since its peak of 70 cents in Feb. To put it another way, the market now prices it at less than one-third of the highest value that the market consensus was. How could that it make sense to have such a potential stock with decreasing price? It’s ridiculously cheap.