whats u r take on HUM partnership with DOUDOU is relying on...

First 1655 Last

Share
Profile

Follow
SilverTrade

5,864 Posts.

608

27/02/21

14:45

Post #: 51387051
Share

Originally posted by StefanF: ↑

Its an interesting thought and to be honest in 2020 I'm not sure because in many ways I feel like the ship has sailed. If we go back 3 or 4 years ago then things would have been very different.

HUM used to be a consumer financing company which had quantitative credit risk models in place. These are difficult and time consuming to set up when you take into consideration resourcing, building the models, taking time to valuate the model and finally going through independent risk model validation process. This gave HUM a strategic advantage a few years ago.

However there were two issues. One, they didn't realise quick enough that the real money is made in the pay-in-4 or similar type products rather than the pay-over-2-years. There is a number of reasons for that including lower credit risk, greater capital efficiency (book turns over multiple times a year) and most importantly creating deep relationships with consumers and merchants.

The second one, and this is something I touched on a year or two ago, is that HUM was paying a dividend instead of reinvesting the capital. This was fine a few years ago when HUM was just in consumer finance, which isn't really high growth so it made sense to pay out the capital.

Taking all of this into consideration, in a perfect world for HUM investors a few years ago HUM would have announced their transition to pay-in-4 (or similar) of the back of APT success. The strategy would have included a capital raise, and stopping dividend payments. Of course you'd say that's crazy, the share price would have tanked but it depends on what strategic initiatives they would have provided to the market. If they said we are taking advantage of our credit risk models to rotate into BNPL and expand overseas then the market would have been fine by it. You'd now have a company closer to Z1P's market cap or maybe higher.

Of course this is all highly theoretical. One big issue in all of this is that HUM was already an established company with certain shareholder expectation so everything I mentioned isn't as simple as it sounds. APT and Z1P were new companies with a clear focused strategy (and still are). HUM rotating into BNPL feels a little like that scene in Titanic where the captain is trying to avoid the ice berg but the ship just rotates too slow.

Expand

whats u r take on HUM partnership with DOU

DOU is relying on other banks licence
DOU is Capital light
DOU -Repeat merchants and users due to various jars
DOU- Book turnover multiple times, various jars, merchant option
DOU 300% cust growth number
DOU recent acquisition wives them access to more customers and increases the cust no by almost 200%

Or is IOU or something else a better bet than both combined

HUM Price at posting: $1.02 Sentiment: Buy Disclosure: Held
Upvote

0 Great analysis

Reply

There are more pages in this discussion • 1 more message in this thread...

First 1655 Last

Add HUM (ASX) to my watchlist

(20min delay)
Last 41.5¢		Change -0.005(1.19%)		Mkt cap ! $201.4M

Open	High	Low	Value	Volume
42.0¢	42.0¢	40.5¢	$92.23K	223.5K

Buyers (Bids)

No.	Vol.	Price($)
1	948	41.0¢

Sellers (Offers)

Price($)	Vol.	No.
41.5¢	39602	1

View Market Depth

No.	Vol.	Price($)
1	948	0.410
4	71457	0.405
9	428363	0.400
8	194973	0.395
7	91650	0.390

Price($)	Vol.	No.
0.415	39602	1
0.420	203648	8
0.425	10005	1
0.430	40413	5
0.435	63721	5

Last trade - 16.10pm 18/06/2024 (20 minute delay)


Last 41.5¢		Change -0.005 ( 0.74 %)
Open	High	Low	Volume
41.5¢	41.5¢	41.0¢	66613
Last updated 15.59pm 18/06/2024 ?

HUM (ASX) Chart

whats u r take on HUM partnership with DOUDOU is relying on...

Featured News

ASX Market Update: RBA holds rates at 4.35% in line with consensus | 18 June 2024

From the Floor question: "How can we make gold mining shares become valued again?"

MiningNews Select Conference: Look further afield for funding projects, advises Rick Rule

MiningNews Select Conference: Smooth permitting, strong teams the key to project success and reaching demand

From the Floor question: "Why are you going back to Ned's Creek for a drilling campaign?" | Lodestar Minerals

Buyers (Bids)

Sellers (Offers)

Featured News

whats u r take on HUM partnership with DOUDOU is relying on...

Featured News

Top Stories

ASX Market Update: RBA holds rates at 4.35% in line with consensus | 18 June 2024

From the Floor question: "How can we make gold mining shares become valued again?"

MiningNews Select Conference: Look further afield for funding projects, advises Rick Rule

MiningNews Select Conference: Smooth permitting, strong teams the key to project success and reaching demand

From the Floor question: "Why are you going back to Ned's Creek for a drilling campaign?" | Lodestar Minerals

Buyers (Bids)

Sellers (Offers)

Featured News