JDO General Discussion

Creating a new thread to discuss. I like JDO longer term. It has a good niche. With the larger players focusing on home loans JDO key strength is its niche away from that which is the main driver of my exposure in this.



But we need to consider the shorter term. I believe that:
- This is a fair way away from a steady state profitability which will test investors patience in the short term as it executes on profitably growing the loan book near term.
- Funding conditions is a risk we need to consider. With the larger players reporting increased cost from the capital markets, JDO will not be immune to this. Larger players typically pass on these cost to customers but as JDO is still building its market share, I do not think we have that capacity just yet.
- The underlying trend for NIMs from most analysts suggests under 2% fiscal 2022 and 1.95% for 23 as the RBA removes funding support from the system post Covid. This will affect the banking sector and not just JDO, It is a wait and see moment but the whole sector is being discounted due to this.

Overall I think JDO will do well longer term once it shows a steady state profitability. That will take time and patience. I'm holding long and holding tight. Those betting on an IPO mania is obviously getting disappointed and selling now. A good opportunity to top-up perhaps or let it fester longer for an even bigger discount.. I'm still at two minds at this point. What do others think?