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We attended Revenue Group’s briefing last week.
Our view did not change even with the recent tie up with major
companies like Public Bank and BIG by Air Asia. Rvenue is still a
company that provides the terminal for transactions and the latest would
be the mobile application for payment called revPAY.
revPAY Payment Platform
The latest revPAY is Revenue Group’s proprietary platform where a
simple use of the QR code scanning could pay for almost everything you
see in store.
We felt that revPAY is targeted at merchants as it really smoothens
payment on the receiving end leaving out conventional credit card
intermediaries with heavy platforms and expensive to use. A mere QR code
scanning and it’s done! The smartphone availability removes the
requirement of those bulky devices you see in stores.
The other feature for revPAY comes in the form of e-wallet solutions
but we felt that this service had already been led by a bunch of service
providers in the market. So the trick for development still lies in the
ability to create a platform that consolidates all the payment services
like the one below.
Data Harnessing
In hoping that users would do a lot of transactions on their platform,
an opportunity for Revenue to collect a good quality of raw data from
user seems to be a good start for generating extra income. The packaging
of data for a fee could see a new stream of income for Revenue Group
when the services gain traction. Companies could do what Revenue Group
calls “a high impact targeting for marketing and sales”.
We shall see what will rise from this segment as we aren’t that
optimistic due to the limited number of transactions at the moment. The
creation of raw data and its quality would be slow for the time being.
We believe that it would be a while before the application revPAY gains
traction in fact the mobile payment sees tough competition with the
requirment to provide plenty of incentives to use. Definitely plent of
cost to incur before the lead!
New Money Lending License
Based on the market announcement last week, the Housing and Local
Government Ministry granted Revenue Harvest (a subsidiary) the license
to operate as a money lender.
During the briefing, this was explained further.
The execution would be to partner financial institutions in lending
micro loans to their merchants. Apparently, the company has a conviction
that they could use the records of their merchant’s transaction where
it could serve as a credit-worthiness gauge for financial institutions
to reference and lending out the micro loans.
Again, we aren’t that optimistic because we believe that banks already
have those data, but they didn’t execute on somewhat a similar plan to
Revenue’s. We could only conclude that merchants with high volume do not
require these micro loans while smaller merchants do not even qualify
for it.
Our Take
Overall, we felt that the current valuations have been fully valued
and much expensive than what it should be. The share price showed that
it is gradually decreasing after the IPO’s peak and that is not a good
sign for the time being looking at their prospects ahead.
We would have to re-evaluate when the number from next quarters results are out. Until then we rate this as a ‘hold’.
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