MoneyHero — Encouraging start to FY24

MoneyHero (NASDAQ: MNY)

Last close As at 29/06/2024

USD1.90

−0.06 (−3.06%)

Market capitalisation

USD78m

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Research: TMT

MoneyHero — Encouraging start to FY24

MoneyHero has made a promising start to FY24, with robust levels of revenue growth in Q124 across several core markets and all product verticals. Investment in the platform has resulted in improved application conversion rates, while several senior hires have been made, including the new CFO, Hao Qian, and a head of AI. Although the EBITDA loss widened in the quarter, management expects profitability to improve to a break-even run rate by end FY24. Our estimates are unchanged, anticipating sequential quarterly revenue growth as management accelerates investment in its user base and benefits from operational leverage.

Written by

Milo Bussell

Analyst, Consumer and TMT

TMT

MoneyHero

Encouraging start to FY24

Q124 results

Media

28 June 2024

Price

$1.90

Market cap

$74.9m

Net cash (excluding leases) at 31 March 2024

$60m

Shares in issue

42.9m

Free float

36.3%

Code

MNY

Primary exchange

Nasdaq

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(9.3)

7.7

(80.5)

Rel (local)

(12.1)

2.3

(85.0)

52-week high/low

US$10.4

US$0.8

Business description

MoneyHero is a leading personal finance and digital insurance comparison platform in South-East Asia. The group operates online through both its direct to consumer (DTC) platforms and its B2B channel, Creatory. MoneyHero offers users financial products including credit cards, personal loans, mortgages and insurance.

Next events

H124 results

September 2024

Analysts

Milo Bussell

+44 (0)20 3077 5700

Fiona Orford-Williams

+44 (0)20 3077 5700

MoneyHero is a research client of Edison Investment Research Limited

MoneyHero has made a promising start to FY24, with robust levels of revenue growth in Q124 across several core markets and all product verticals. Investment in the platform has resulted in improved application conversion rates, while several senior hires have been made, including the new CFO, Hao Qian, and a head of AI. Although the EBITDA loss widened in the quarter, management expects profitability to improve to a break-even run rate by end FY24. Our estimates are unchanged, anticipating sequential quarterly revenue growth as management accelerates investment in its user base and benefits from operational leverage.

Year end

Revenue ($m)

PBT*
($m)

EPS*
($)

DPS
($)

P/E
(x)

Yield
(%)

12/22

68.1

(30.2)

(52.17)

0.00

N/A

N/A

12/23

80.7

(156.5)

(13.49)

0.00

N/A

N/A

12/24e

104.4

(4.2)

(0.08)

0.00

N/A

N/A

12/25e

125.1

1.7

0.03

0.00

58.8

N/A

12/26e

150.3

8.4

0.16

0.00

11.6

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Good revenue momentum in Q124

In Q124, MoneyHero delivered revenue growth of 24% year-on-year to $22.2m (Q123: $17.9m), with growth across all verticals and channels. Its two core markets, Singapore and Hong Kong, displayed very strong levels of growth, offset by declines in Taiwan and the Philippines as its partner Citibank paused certain offerings. The focus on market share growth lowered profitability, with elevated spend on advertising and marketing costs on better rewards for users. The net cash position remained healthy at $60.0m (end FY23: $68.6m), providing ample resources for investment in organic and potential inorganic opportunities.

Leveraging commercial partnerships

MoneyHero’s broad user base means it continues to be the preferred channel of customer acquisition for many of its financial service partners. This has enabled it to work collaboratively with these partners to co-create products, enhancing its ability to cross-sell and upsell products. While the number of unique monthly users declined in the quarter from end FY23, increased investment in marketing campaigns and the customer experience journey helped to boost the level of approved applications by 72% year-on-year to 206,000, a key driver of revenue. Investment in AI capabilities should help to offer more tailored recommendations for members and ShopHero app users, driving customer loyalty and engagement on its platforms.

Valuation: DCF-based valuation nudged up

MoneyHero’s share price has risen 10% in the year to date, performing well against the peer median of 1%. Despite this, it continues to trade at a notable discount to its peer group at 0.1x EV/sales across FY24 and FY25. Our DCF-based valuation has risen slightly to $5.17, from $4.95, due to a change in the share count methodology, and continues to indicate substantial upside to the current share price.

Q124 results

MoneyHero’s Q124 results demonstrated good progress in the year to date as it pushed ahead with its market expansion strategy. Q1 has historically been a slower quarter for the company due to the Chinese New Year and the shorter month of February. However, revenue grew 24% year-on-year to $22.2m (Q123: $17.9m), with particularly strong growth in Singapore (61%) and Hong Kong (37%). Taiwan declined 40% after paused product offerings, while in the Philippines the 4% dip in revenue followed revised pricing terms for a key client. Both of these markets were affected by Citibank in particular pausing products, having sold its consumer banking business to DBS in August 2023. Citibank is an important partner for MoneyHero, with 22% of revenue in FY23 coming from entities affiliated with or acting on behalf of the bank.

By product vertical, MoneyHero’s strategic focus on the more profitable insurance and personal loan segments was reflected in robust levels of growth of 44% and 41%, respectively. Credit cards, historically the majority of MoneyHero’s revenue, also grew 18% in the quarter to $15.4m (Q123: $13.1m). Credit cards remain an important focus for management, not only because it is the largest product vertical by revenue, but it also acts as a key channel through which MoneyHero can cross-sell or upsell to customers.

Management remains confident of achieving its stated revenue target of $100m by end FY24. We anticipate that FY24 results will be H2 weighted and, consequently, our estimates are unchanged. In addition, we expect the benefits of MoneyHero’s investments into brand and marketing to bear fruit in the second half of the year and provide a further boost to revenue.

Exhibit 1: Q124 revenue breakdown

$m

Q123

Q124

Y-o-y growth (%)

Revenue

17.9

22.2

24%

By geography:

Singapore

5.6

8.9

61%

Hong Kong

5.6

7.7

37%

Taiwan

2.3

1.4

(40)%

Philippines

4.1

4.0

(4)%

Malaysia

0.2

0.1

(46)%

By product vertical:

Credit cards

13.1

15.4

18%

Personal loans and mortgages

2.3

3.3

41%

Insurance

1.3

1.8

44%

Other verticals

1.2

1.6

33%

By channel:

Online financial comparison platforms

14.8

18.1

22%

Creatory

3.1

4.1

34%

Source: MoneyHero

Profitability dipped year-on-year, with the adjusted EBITDA loss growing to $6.4m (Q123: $0.3m). However, this was largely expected given the signalled increase in advertising and marketing costs to develop its customer acquisition strategy, as MoneyHero seeks to take further market share in its geographies. Other general administration costs also increased year-on-year due to the additional expenses of being a publicly listed company.

The net cash (excluding leases) position remained healthy at $60.0m, down $8.6m since the end of FY23 due to continued investment in the business. Given its position as the number one brand in four of its five markets, management remains open to strategic acquisition opportunities and believes there is the potential for consolidation within its industry and geographies.

Turning towards the key performance indicators for the business, despite lower unique monthly users since end FY23 at 8.5 million (FY23: 8.7 million), MoneyHero is converting a higher number of users from clicks to approved applications. This is a key driver of revenue, with 90% of FY23 revenue generated through approved applications. Approved applications grew 72% year-on-year to 206,000 (Q123: 120,000), with the level of approved applications as a proportion of clicks growing from 6% in Q123 to 9% in Q124. Management has implemented a number of initiatives to optimise its conversion rate, including investing in its marketing strategy, developing the customer journey, utilising AI capabilities to provide more relevant content to users and broadening its audience reach through the ShopHero app and the Creatory platform.

Exhibit 2: Approved application progression

Source: MoneyHero, Edison Investment Research

Exhibit 3: Financial summary

$m

2022

2023

2024e

2025e

2026e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

68.1

80.7

104.4

125.1

150.3

Cost of Sales

(33.9)

(43.9)

(60.6)

(71.3)

(82.7)

Gross Profit

34.3

36.7

43.8

53.8

67.6

EBITDA

 

 

(15.6)

(6.8)

(1.9)

5.0

13.7

Normalised operating profit

 

 

(21.5)

(14.0)

(6.8)

(0.8)

6.5

Exceptionals

(19.5)

(15.5)

0.0

0.0

0.0

Share-based payments

0.0

(0.5)

(0.5)

(0.5)

(0.5)

Reported operating profit

(41.0)

(30.0)

(7.3)

(1.3)

6.0

Net Interest

(7.6)

(18.2)

2.6

2.4

1.9

Change in FV of financial instruments

(1.1)

(57.3)

0.0

0.0

0.0

Exceptionals

0.0

(67.0)

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

(30.2)

(156.5)

(4.2)

1.7

8.4

Profit Before Tax (reported)

 

 

(49.7)

(172.5)

(4.7)

1.2

7.9

Reported tax

0.3

(0.1)

0.8

(0.2)

(1.3)

Profit After Tax (norm)

(25.2)

(129.9)

(3.5)

1.4

7.0

Profit After Tax (reported)

(49.4)

(172.6)

(3.9)

1.0

6.6

Minority interests

0.0

0.0

0.0

0.0

0.0

Discontinued operations

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

(25.2)

(129.9)

(3.5)

1.4

7.0

Net income (reported)

(49.4)

(172.6)

(3.9)

1.0

6.6

Basic average number of shares outstanding (m)

0.5

9.6

42.9

42.9

42.9

EPS - normalised ($)

 

 

(52.17)

(13.49)

(0.08)

0.03

0.16

EPS - normalised fully diluted ($)

 

 

(52.17)

(13.49)

(0.08)

0.03

0.16

EPS - basic reported ($)

 

 

(102.40)

(17.90)

(0.09)

0.02

0.15

Dividend ($)

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

18.4

29.4

19.8

20.2

Gross Margin (%)

50.3

45.5

42.0

43.0

45.0

EBITDA Margin (%)

-23.0

-8.5

-1.9

4.0

9.1

Normalised Operating Margin (%)

-31.5

-17.4

-6.5

-0.6

4.3

BALANCE SHEET

Fixed Assets

 

 

15.6

8.1

7.0

5.8

3.6

Intangible Assets

14.4

7.3

6.1

4.5

2.3

Tangible Assets

1.1

0.8

1.0

1.2

1.3

Investments & other

0.1

0.0

0.0

0.0

0.0

Current Assets

 

 

48.6

106.9

112.6

119.1

133.0

Contract assets

11.1

16.0

20.9

22.5

25.6

Debtors

13.2

22.1

28.9

32.4

34.9

Cash & cash equivalents

24.1

68.6

62.7

64.0

72.4

Other

0.2

0.2

0.2

0.2

0.2

Current Liabilities

 

 

(39.0)

(35.7)

(44.3)

(48.5)

(53.7)

Creditors

(23.2)

(33.2)

(41.8)

(46.0)

(51.2)

Short term borrowings

0.0

0.0

0.0

0.0

0.0

Finance leases

(0.5)

(0.6)

(0.6)

(0.6)

(0.6)

Other

(15.3)

(1.9)

(1.9)

(1.9)

(1.9)

Long Term Liabilities

 

 

(9.4)

(0.3)

(0.3)

(0.3)

(0.3)

Long term borrowings

(8.7)

0.0

0.0

0.0

0.0

Other long term liabilities

(0.7)

(0.3)

(0.3)

(0.3)

(0.3)

Net Assets

 

 

15.8

79.1

75.1

76.1

82.7

Minority interests

0.0

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

15.8

79.1

75.1

76.1

82.7

CASH FLOW

Op Cash Flow before WC and tax

(44.9)

(172.5)

(2.3)

1.2

7.9

Working capital

1.9

(3.7)

(3.1)

(0.9)

(0.4)

Exceptional & other

28.4

159.2

(0.1)

3.3

5.2

Tax

0.0

0.0

0.8

(0.2)

(1.3)

Net operating cash flow

 

 

(14.6)

(17.0)

(4.8)

3.4

11.5

Capex

(5.0)

(2.2)

(3.5)

(4.3)

(4.8)

Net interest

(7.8)

(18.2)

2.6

2.4

1.9

Equity financing

0.0

91.5

0.0

0.0

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

Other

42.6

(9.4)

(0.2)

(0.2)

(0.2)

Net Cash Flow

15.2

44.7

(6.0)

1.3

8.4

Opening net debt/(cash) (including leases)

 

3.6

(14.5)

(68.0)

(62.1)

(63.4)

FX

(0.3)

(0.1)

0.0

0.0

0.0

Other non-cash movements

0.0

0.0

0.0

0.0

0.0

Closing net debt/(cash) (including leases)

 

(14.5)

(68.0)

(62.1)

(63.4)

(71.8)

Source: MoneyHero accounts, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by MoneyHero and prepared and issued by Edison, in consideration of a fee payable by MoneyHero. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by MoneyHero and prepared and issued by Edison, in consideration of a fee payable by MoneyHero. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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