2 Specs--
--CohBar initiated with a Buy at Chardan 04:53 CWBR
-- UEPS-- African payment firm.
Net1 UEPS I know from many years ago when they had the South African contract. The stock did very well and then crashed I did get out so I don't have hard feelings towards the name.
The SA contract was huge and resulted in 1/3 less income to the company and half it's workforce being let go. They sold off opporations in other countries and re organized and buttoned down the hatches.
New CEO:In September 2020,the CEO Herman Kotze,
stepped down and was replaced by the CFO, Alex Smith,on an interim basis.The Company is now searching for a long-term replacement.
Insider buying:Since May 2020, Antony Ball and his firm Value Capital Partners have purchased over 2.5 million shares valued at more than $5 million on the open market. Their most recent open market purchase was on 11/24/20
at $3.39 per share, basically where the stock is today. Another board member purchased on the open market in September 2020.
Core Business Overview
Summary:Net1 has built a diverse payments and financial services business in South Africa. The Company has the opportunity to leverage its unique technology, infrastructure, and trusted brands to build a FinTech business capable of dominating the South African market.
Market Opportunity & TAM:South Africa is an emerging market with a population of ~58 million and a GDP of $385 billion in 2019, making it the second largest economy in Africa. South Africa has a nascent financial infrastructure, with limited access to fundamental financial services for large geographic swathes of the country and segments of the population. At the same time, smartphone usage is common (over half the population uses mobile internet), credit card adoption is growing (13% annual growth since 2012), the educated work force is growing rapidly, and the economy has vast potential including some of the largest reserves of various rare minerals (platinum, gold, palladium, etc.). These all provide strong fundamentals for long term economic growth & FinTech penetration. Net1 focuses on providing its financial services to the underbanked in South Africa, which includes:
- B2C: ~26mm low income South African consumers
- B2B: 1.6mm MSME (Micro, Small and Medium Enterprises) South African merchants that are currently unable to accept electronic payments
Technology & Infrastructure
UEPS Technology Protocol:Due to the large rural population as well as intermittent infrastructure availability, there is a need in South Africa for a financial transaction processing network that works offline as well as online. Net1 built a unique technology called the Universal Electronic payment system that is at once operable with the EMV protocol (and therefore capable of working with Visa/Mastercard cards and card readers) while functioning offline. UEPS combines biometric authentication, last-mile payment processing, and cash interoperability to provide secure and convenient payments infrastructure.
Mobile Virtual Card:Net1 developed a unique technology for sending mobile virtual cards, which enables secure payments and money transfers using 1x, unique codes.
Physical Branches:The Company distributes its services through ~350 retail locations, including financial services branches, financial service express stores, and satellite branches.
ATM Network:Approximately ~60% of the South African economy is transacted over cash. As such, UEPS complements its financial transaction processing business with a network of 1,500 mobile (i.e. mounted on pickup trucks, traveling with armored vehicles) and stationary ATMs. Net1 is the market share leader in this area and has a well-known brand name.
Products & Solutions:
EasyPay:Provides card payment processing services to businesses and bill payment services to consumers. Leading bill payments services market share in South Africa. Growing rapidly – processing ~1.4mm bill payments per month (October), up from ~1.1mm per month at beginning of CY2020, as mentioned in the
last earnings call.
EasyPay Everywhere:Provides mobile banking to consumers. ~1mm active accounts, with approximately ~$30mm run rate revenue. $780mm TAM.
MoneyLine:Offers microloans to consumers & MSMEs. Average term life of ~6 months. Average value of a little under $100. While some of the microfinance loans are securitized, much of it remains on Net1’s books. $25.6mm book value as of 9/30/20. $1.4bn consumer opportunity, $4.2bn business opportunity.
SmartLife:Life insurance policies, primarily issued for the purpose of covering funeral expenses. 230k paying policies. $1.6bn market opportunity.
Cashpaymaster Services (“CPS”):Distributes social welfare payments to over nine million beneficiaries. Currently in liquidation.
Here is a good article on the name--
https://seekingalpha.com/article/43...garp-stock-multiple-catalysts-to-unlock-value
