technically bullish chart, page-24

This is an interesting stock. Which does look undervalued at present. ROE looks to be a sustainable 15% if they hit forcasts. And growth appears promising.

At first i was a little concerned over the operating cashflow number (-38mil) from FY15 report. But on a closer look, this is a result of 55mil of loans made to customers which ends up being recorded as an asset on the balance sheet anyway and translates to an increase in shareholders equity which they make a reasonable return on (15%). Excluding the 55mil of loans made, I have operating cashflow of 17mil.

Basically, during FY15 they raised capital and borrowed a total of 38mil (the shortfall in operating cashflow) to fund the growth of the loan book.

Im very interested to see the numbers from the fy16 annual report. And any guidance on dividend policy. At the moment, cashflow from operations is not enough to fund the growth of the loanbook so they need to raise capital and borrow. I would prefer that they didnt pay a dividend and used the money to fund the growth of the loan book (15% ROE is better for me as a shareholder than a 5% div yield).

On fy15 numbers and a 50% payout ratio i have value around $1.40 however, if they retained all their earnings rather than paying out a dividend my valuation is well north if $2. NOTE: These a from a pretty rough calculations on FY15 numbers.

Looks like theres lots of upside here.

As always DYOR. Interested to hear everyone elses view on the fundamentals