MoneyMax: Growth potential; relatively undervalued

Key Financial Summary

Profitability

	FY 2010	FY 2011	FY 2012
Revenue (million)	41.68	62.93	75.57
Net Income	1.16	3.50	5.83
Net profit margin (%)	2.78	5.56	7.71

Increasing Revenue and improving Net profit margin.

Liquidity & Solvency

Current Ratio	1.36
Quick Ratio	1.25
Total Debt/Equity	2.26
Total Debt/Total Assets	0.26
Avg Assets/Avg Equity	3.49
Interest Coverage Ratio	5.95

MoneyMax is solvent and does not face much difficulty in keeping up with interest payments.

Peer Comparison

	MoneyMax	MaxiCash
ROA(%)	0.47	0.11
ROE(%)	1.64	0.31
PE	17.99	44.39
P/BV	2.92	3.22

MoneyMax has better ROA and ROE; and relatively undervalued.

Growth stimuli for MoneyMax and the sector

• Rising population increases customer base
• Rising affluence fuelling demand for jewellery/ timepieces
• Rising cost of living and depressed wages may drive pawnbroking activity, as more individuals obtain short-term loans
• Possible unsecured lending curbs result in higher pawnbroking activity from consumers unable to obtain unsecured credit
• Demand for gold as a safe haven is beneficial to its retail and trading operations