With the recent sell-off from coronavirus, I think financial...

With the recent sell-off from coronavirus, I think financial industry still remains attractive, in terms of its necessity to us and valuation.
For me, the difficult question is which areas of the financial industry will provide the best long-term returns. There's banks (big four), financial service (amp, MQG), insurance (IAG, MPL), share registry/service (CPU, LNK), etc.
From macro perspectives, low rate and regulatory red-tape seems to affect this industry a lot.
Low rates are likely to persist for quite some time, and banks/insurers will earn less on its cash-holding in the next few years. The effect of low rates is exemplified in European banks, where their bank valuation and performance is unfavorable. But, low rate is here to stay. For me, it's tempting to buy banks, since banks are not expensive but their earning won't be great. Differentiation between different banks is very little, leaving them to compete on margin.

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On the other hand, I think Lnk and CPU are both global and seem to have dominant competitive advantages in their core business.
In the areas of share registries, LnK and CPU are probably the biggest two players domestically and globally.
In other business areas, Lnk offer fund solution and banking/credit management; while CPU gears towards more mortgage/rental/utility management.
But, in terms of the next big thing, Lnk has the X-fact, which is Pexa. Looking at the monopoly of stock exchanges around the world (ASX in Australia), their earning power is incredible. Pexa is very likely to evolve into becoming the monopoly of property conveyance and settlement platform in Australia. Given the size of real estate market and its attractiveness in low rate environment, Link's share of PEXA probably might be worth more than the rest of its business, over time.

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In terms of Lnk's valuation, at around the current level. its market cap is about $2.4bn. Its NPATA for FY2020 is $160m. P/E of 15. The price is not expensive.
While I wish I might buy it at cheaper price, it's impossible to predict the market tomorrow, let alone next week.
So, I look at the valuation side of the equation. I like the core business of share registry. and ok with super and banking service.

But, Pexa is what stood out. In 2020HY, its earning is $26m (with 70% of properly settlement, settled on the platform). FY earning of $52m
Tail wing factors :
1. Digital trend/e-Conveyancing - Over the next two year, reaching 80 to 90% of penetration in property settlement is very likely. Imply $60m to $65m earning per year.
2. The value of data - Pexa collects. It's in a position to use this data to provide better services on Pexa or expand Pexa into other business areas such as research, inspection or maintenance phase of property purchase process.
3. Given the valuation of monopolistic exchange typically trade at close to P/E of 30. In the current year with earning of $52m, it already implies $1.5bn for 100% of Pexa. Lnk owns 44% => about $700m.

Given the current cap of $2.4bn, of which $700m is from Pexa. The rest of its business is only worth $1.7bn. With earning of $160m this year, its PE is around 10. Plus, the value of Pexa can grow, as it increases in complexity, service and reach.

So, I bought Lnk.