I see that you're not a holder of SWF, so you can be forgiven...

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mynamislee

288 Posts.

39

10/02/22

09:50

Post #: 59475731
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Originally posted by Esmer: ↑

The most important metric is revenue. The latest quarterly shows that revenue is falling, despite SWF having become an established player in the broker space and despite growing numbers of active traders.

The total number of trades is falling. The number of trades per active trader is falling. The number of trades per customer is less than four for the quarter.

Advertising costs are nearly 20% of receipts from customers.

In my opinion, unless SWF can begin to attract frequent traders then the future for SWF does not look good. Speaking from experience, I think that SWF's current trading platform is hopelessly unsuitable for frequent traders. The only viable solution, in my opinion, is for SWF to do a deal with an established third party supplier of state-of-the-art trading platforms. Based on what SWF has done so far, I consider that it will be impossible for SWF to produce an inhouse trading platform that frequent traders will migrate to, but SWF's inhouse systems development efforts will certainly push up costs.

An as yet unknown is that there could be a turnaround driven by crypto and HK, but I wouldn't bet on it.

Is SWF significantly undervalued? I can't see any value in SWF because I think that the above figures are fundamentally unsustainable. SWF appears to have shot its bolt. I will not be buying back into SWF unless it changes course onto a path that will convincingly lead it to becoming profitable. The next quarterly will be crucial.

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I see that you're not a holder of SWF, so you can be forgiven for missing the detail in the 4C that explains the lower revenue.

"Operating revenue decreased slightly to$5.07m, down from $5.5m in Q1, primarily due to customer acquisition-led promotionalactivity in November and December offering free brokerage on ‘buys’ for Exchange TradedFunds (ETFs)."

They were offering free ETF buys, which is a large portion of trades to entice new traders. Now that the promo is over, the next 4C should have a really nice recovery in revenue.

SWF Price at posting: 22.0¢ Sentiment: Buy Disclosure: Held
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I see that you're not a holder of SWF, so you can be forgiven...

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