# EPY - ePay Asia



## dmasvar (20 July 2006)

Hi,

I'm curious, I've being following this company formely skynetglobal of which it is no more,its into pre paid top ups for mobile phones,it provides the systems and so forth..

anyway, in four countries, they have what i would have considered some very decent numbers coming through the system..

does anyone else follow this,a search on the forum shows no one has posted about it..

running at PE of 15, forward looking growth rate of 50% at least..

first quarter $1.33m, recent 2nd quarter $2.1m net earnings!!

191m shares outstanding..

why aren't people giving it the attention it deserves?

too much mining i suspect?

any thoughts.. last 6 months of announcement is worth reading to give a good picture of what its doing..



*Admin Note:* ePay Asia (EPY) was formerly known as SkyNetGlobal (SKG). You can find discussion on SKG here: https://www.aussiestockforums.com/forums/showthread.php?t=1723


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## dmasvar (23 July 2006)

should be a good month ahead for epy as they hit the road..

is anyone else following this stock..?


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## dmasvar (31 July 2006)

One stock which I have followed is the turnaround story and transition of skynetglobal, which although was once a dog is no longer a dog, its one of those rare reverse floats which has done incredible well but exposure or lack of it including correct and updated coverage is one of its key problems.

Just quickly.

They are in the business of providing pre paid top up systems for mobile and disuel fule.

In the last six months, it has more than delivered as per prospectus.

I believe all the interest with uranium and mining in general with other big weighty stocks has left the performance of EPY unnoticed.

Operate in 4 countries, Malaysia (90% of revenue), Indonesia (06' will make for them some $350 000 in USD), Pakistan (recently signed with 2nd largest telecom company there to introduce pre paid technology) and Thailand.

Now here are the financials.

1. 1st QTR, $1.33m net earnings attributed to them, which represented 140% increase in net earnings compared to last quarter.

2. 2nd QTR, $2.10m net earnings attributed to them, which represent some 277% increase in net earnings compared to 2nd quarter of last year!  Has any company on the ASX or for that matter a small company on the ASX performed this well (forward looking we're talking most probably very close to triple digit as Indonesia will have kicked in, Pakistan will also have begun, their petrol top up introduced in Malaysia will also begin contributing and the consolidation of Malaysia's pre paid top up will continue).

The other financials are equally impressive, they are growing or this year are growing at triple digit rates and next year forward growth should be at least around 50% to 80%, if you use a PEG ratio adjusted for growth, this is an attractive company.

At prices of 46cents, with 191m shares, its a 14 to 15 PE, cheap when compared to financials and growth rate forcast and evidence of turnaround already provided.  

EPY provides true exposure to Asian growth in telecommunication as well as other large industries (recently introduced pre paid top up for diseul fuel).

Additionally, some sensitve news of last 6 months.

1. They announced 1 and 2nd quarter results as mentioned.

2. They ditched entirely the W home business or wi fi business associated with the legacy business of skynetglobal,  complete to Big Air (also listed) for $500 000, part cash and part $350 000 of shares in Big Air, unrestricted.

3. They teamed up with Ufone of Pakistan, 2nd biggest player there to start introducing the system.

4. They have bought out the minority shareholder of Indonesia. E Pay Asia now owns 63% or there abouts of E Pay Indonesia.  Indonesia is making money for them and is profitable, will make some $500 000 USD, E Pay Asia shares of $350 000 USD.  Because E Pay Malaysia is owned 60% by E pay Asia, they get 60% of the $500 000, the 40% of E Pay Malaysia is owned by Euro Net (who runs E Pay system in Australia and other western countries).

The structure looks initially complicated but isn't,the primary business is Epay Malaysia which generates 90% of the income.

5. They have introduced a pre paid petrol top up system and signed contract to do this with 1000 diself fule stations across malaysia (they have a major investor connected with Malaysian Government finance arm and this probably helps with negotations)

6. They have paid for Mobiepay a developer of mobile pre payment technology which will assist with the entry into China later in 07'.

It is amazing how uncovered this company is.. it represents hardly any risk for the medium term, only risk is illiquidy and lack of exposure (though this is improving over time as increasingly it can't be ignored).

7. They also announced 20% increase in net earnings, from $5m in prospect to $6m.

They have already earned net earnings of $3.4m ($1.3 first quarter and $2.1 2nd quarter)... this doesn't include the money from Indonesia or the other 2 countries of Pakistan and Thailand, the also make some money from leasing the technology).

They have being in business for 3 years before floating and have made a profit from year 1.. they are experiencing the growth that may have being associated with successful outfits like WTF wotif, but wotif experienced most of their successful growth while a private company, EPY is doing it righ tnow before our eyes..

They have expecdtation in 07' to enter another 4 countries, China, Vietnam, Singaore and Phillipines.

In Malayasia they have a stronghold of 60% of the market for pre paid top up.

Asian countries will be using pre paid for a long timne to come yet.. they like cash, its developing economy and the penetration and credit worthiness is not there for the majority of people to pass credit card checks.

Can't see this stock going backward.

Also the infrastructure of some 15 000 point of sales in Malaysia and 4500 ATM top up system means a sizeable asset to cross use to assist make payments like eftpos or billexpress in Australia..

Essentially, you have a reasonably priced stock at 14 to 15, you have exceptional growth and continual growth forcast, in addition to proven 2 quarters of net profit earnings.  They have also stated to pay 40% dividend out.  They have proven ability to deploy the system.  The technology backed by large European company, Euronet.

They will have to revise towards their financial year end of 31st December 2006 upwards (and this will provide the impetus towards $1).  Its very likely that people aren't going to not make calls just to spite the company for the next 2 quarters.. so 06' projection will again be exceeded.

There is enough financials to cover the stock and make some tentative recommendation to clients and its unlikely they will not be rewarded?


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## dmasvar (3 August 2006)

*EPY - E - Pay Asia - Special Cross Trade $1.7m*

Hi,

I'm not an expert with the intricate mechanics of the market processes, but in my westpac screen, there is a new and very large and unexpected what they term "special cross trade" of $1.7m, that's a huge amount for this stock,so it means somebody is finally taking notice of the stock and its recent 6 months of amazing announcements .. solid business of pre paid top up of mobile and petrol.

anyway, how does a special cross trade work, who are the participants, is it institutionals talking to each other over the phone and coming to agreement to make the trade.. so they don't have to effectively list the by and sell orders on the market, only the resulting trade..


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## chris1983 (3 August 2006)

I really like this stock.  I think it has great potential.  I just dont have the funds to buy it atm.  I definately would consider investing in this stock.  Their revenues have been increasing over the last 5 years and they are going to start becoming profitable.  Great company with the future for mobile phone top-ups


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## dmasvar (3 August 2006)

*Re: EPY - ePay Asia - new volumne high 4.2m*

exactly, its such a little unknown,but today is different, today we saw a cross trade worth $1.7m or 4.2m shares exchanged hands with somebody, likely the  company themselves...

so a big investor finally and its just the start..

as far as profitable,they already are..currently after tax first quarter $1.33m, 2nd quarter after tax $2.1m, that's $3.43m alreayd for 6 months of trading, which is NPAT, they already accounted for tax in these figures..

hence its likely that this company will make some $7m, with 90% of revenue in Malaysia.. there are the other countries to kick in,particularly Indonesia which is already profitable and made $350k USD for them...

its amazing potential and for a long term investor say 3 years, you can't go wrong, even less than that..  its a serious $2 and more company..

compared to PWK, WTF and others, this is a convervative company, growing exponentially, conservative by gearing and so forth, cash generative...

we are experiencing the explosive growth that WTF had, but WTF has a private company when it experienced its growth momentum..


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## dmasvar (5 August 2006)

*EPY - E-Pay Asia*

website: www.e-payasia.com


One important thing that people should be aware of with this stock is that for the december year end for this company of 06,they will make over $6m NET of TAXES, as all earnings are overseas and particularly in Malaysia, of which 80% of revenue is derived, they have tax exempt status for another 5 years as a developing company so net earnings stated quarterly is actually net earnings of any tax expected.

There will be no australian tax on this,so you have a company trading around 10 to 14 PE that will make close to $7m (for six months to june, they made already $3.43m)

They will continue to increase by 50% expected for 07 and 08, if you use a Price Earnings Multiple adjusted for Growth, this is cheap value for this company.

Also there is no debt with the company.

Another important thing to bear in mind when reading their financials is that they must pay for air time that they provide for their card holders from telecommunication company and this amounts to some $6m every week..

So you will see short term debt of around $6m, this is working capital that turns over and over.


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## runlikehell (9 August 2006)

*Re: EPY - consistent, steady buying today*

good sign today,

there is interest and it looks like he's roadshow is causing the interrest.

curiously enough although at the announcement of 2nd quarter earnings he made mention about a road show he has not announced when this will begin..

hence it has not begun but people are buying in preparation for this roadshow to spike the share price...


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## zztop (10 August 2006)

hello fro england,
had two really good days tradeing,good buying volume,seems to have turned the corner,all we need is for you aussies to start buying! lol







today in uk


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## zztop (10 August 2006)

hello again from england...

if any of you epy shareholders want to join/post on one of the top BB in the uk, and keep an eye on the uk side of things,plus keep us updated of any new developments,you are most welcome..( at the moment we are down around 8% here.)

main site.

http://www.advfn.com/

epy BB

http://www.advfn.com/p.php?pid=qkquote&epic=epy&x=12&y=10


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## runlikehell (10 August 2006)

thanks zztop.. this is really helpful..

saves me a lot of time looking..

he're something new from this wire for aussies

E-Pay Asia Limited e-pay Asia to roll out electronic top up network to Malaysia's post offices

        LONDON (AFX) - e-pay Asia Limited said that following a six month pilot
project, it has entered into an agreement with Pos Malaysia Berhad to extend its
electronic top up network throughout the Malaysian national postal company's
more than 900 post offices.
    The provider of electronic payments said the agreement strengthens its
Malaysian distribution network, and with the national roll out of additional
terminals scheduled to be completed within six months, it will have 10,000
points of sale.
newsdesk@afxnews.com
cml


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## runlikehell (10 August 2006)

what is really interesting is that they have made an announcement but it hasn't appeared in the ASX.. is this a normal thing, seems this stock also listed on AIM, there was announcement today but the news is still not on ASX?


news about deal with malaysia postal service


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## zztop (11 August 2006)

HI runlikehell
 we dropped a penny today in the UK,spose it was to be expected after some good gains of late,EPY shareholders here seem to be happy enough at the moment cos as they say we are getting higher lows,if you know what i mean,we do seem to have a 50k seller which seemed to effect the sp today,and the 50k seller has been around for the past few days,most here seem to think a upward move to 30p min (aus that woud be around a$0.60?)is over due,we do seem to take the lead from auatralia,so poor in aus,we get poor uk,the news you posted earlier, was released in the uk,but had little effect on the sp,but after the terror threat,the markets are poor,
in general,i feel we are in a quiet period for the uk markets( holiday season,lasts till the end of august)so when everyone returns i expect major action here,most in uk seem to buy more on any weakness,some days EPY are hard to buy in good amounts,all trades are delayed!  i hold a shed load,like most over here, have a good one..

steve
who lives in England..  :O)


http://mwprices.ft.com/custom/ft2-c...site=&company=NEW&selected=E-Pay+Asia+Limited


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## zztop (11 August 2006)

HIgher lows uk graph


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## zztop (11 August 2006)

runlikehell.

most of the time news is released on ASX first, we have to wait. today we got it first,lets see some +ve movement in the sp..from your end..


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## runlikehell (12 August 2006)

thanks for the post zztop..

keep coming back as i need to speak to people with an interest in epy and how its seen in the UK and this really helps.

the other question i had is how does it work with a dual listed ocmpany on the ASX and the AIM board..

in a perfect world, one should influence the other, but does it work this way, does what happen on AIM affect how EPY is going to be priced in Australia.. or vice versa..

1. how many shares are listed on the ASX compared to AIM?

2. how many shares are there freely floating (this is one question I've yet to find the answer too.. i've tried but can't quite make out what this would be, i know that now 44% of the issued capital is held by simon loh given his sell down to the department connected with the malaysian government finance arm).

so that means the is a lot of freely floating stocks...

3. what about crossed trade, 2 2weeks ago we saw $1.7m dollar purchase in aussie dollars which was at around 41 cents and gave them some 4.2m shares.. who is this party .. any idea? is there someone accumlating..

4. simon loh given the 2nd quarter announcement made mention about the road show but has this materialised, he's not said a peep after this, i remember the first quarter that he did hit the road and it gave a little support.. hopefully he's going out soon and 2 quarters should be sufficient to get this happening..

5. i agree epy should be around 60cents aussie.. but heck there seems to be a lot of sellers but no buyers.. or they are shy.... last friday there was volume of 110 000 units..

if you can answer any of these questions i'd appreciate this...


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## runlikehell (12 August 2006)

the other thing is zztop

is there any links on UK articles or stuff on epy

its terrible in that in australia, a company that announces results like 140% increase first quarter and 277% increase second quarter doesn't even get a mention in the papers..

i think i'll do my bit on the local newspapers..
how is epy perceived in the media.. ? have the 2 quarter results been in the papers in the UK?


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## zztop (13 August 2006)

runlikehell...

FTSE Constituent AIM1 Epic EPY 
Market Sector software & computer services Sedol B063187 
Shares in issue (m) 190.755896 Isin AU000000EPY3 
Market Cap (GBP m) 34.33 Address Level 7, 451 Pitt Street Sydney NSW 2000 Australia 
PE Ratio 0 EPS  
Dividend Yield 0 Dividend Cover


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## zztop (13 August 2006)

yeh' its is strange when a company has great results,and nowt happens...but the drag seems to be from your side...think it dropped nearly 10% on asx last friday...wonder why?


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## chris1983 (13 August 2006)

I dont currently have this stock but my dad holds them.  Its only a matter of time till they are taken notice of.  Investors will see the potential.  As long as they continue to put out healthy messages you can be comfortable with your investment.

If I get spare cash or make a profit on one of my other stocks i'll definately consider investing in these.


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## runlikehell (15 August 2006)

all i can think of about the lack of attention in aussie media is that its business isn't here.. and that's part of the problem, check liek recent ones like GPO, where they have flagged intention to do more with China and already have done work with China..

maybe they are right after all, they are going into China as a perception thingo, and than people will give them the premium it deserves...? perverse logic, ie. based on expectation someting big will happen.. as everything is big in China..

well it would be interesting to see the year close with this stock and see how they fair and what they say to the market.. about strategies for 07...

i would prefer they stitch some more distribution deals with Indonesia.. they are quiet on this front.. all the trading seems to be now around 40 to 41 !! narrow..


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## zztop (16 August 2006)

over 450,000 shares traded to day in the uk,around 350,000 where buys,we recoverd and had a strong finish to the day,we feel very positive in the uk to epy's short and longterm status,we rate this a strong buy..,so whats stoppin ya!!! GET IN!!  :O)


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## zztop (17 August 2006)

another good day here inthe uk,up nearly 10%


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## zztop (17 August 2006)

up 10% here,now we need a good follow on in the uk...then we could be on a roll...   :O)


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## runlikehell (17 August 2006)

*EPY strong buying pressure !*

somebody is accumulating, willing to pay more for the stock.. hopefully sellers can hold tight..


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## zztop (18 August 2006)

runlikehell,can you post the trades page from australia TIA,another good day in the uk... by the way..up around 5%


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## zztop (18 August 2006)

may be of interest..

http://www.lse.co.uk/SharePrice.asp?shareprice=EPY&share=E-PAY_ASIA_LD_ORD_NPV


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## zztop (18 August 2006)

i was just wondering,if you lot had anything left in the tank for today...we need another 5/8% at least..in blighty..  :O)


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## stockpanther (21 August 2006)

hey guys - i'm also a  holder, just bought in recently at a costbase of 42.3cents


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## stockpanther (22 August 2006)

Market depth currently looking very sick here in oz!..

Could be a buying opportunity coming up soon.


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## runlikehell (31 August 2006)

Following on from my previous analysis of EPY

To recap.

Net earnings for 6 months of $3.43m after paying Euronet their 40% share. Before Euronet,its $4.9m (which is even after tax!), so this is quite a cashcow..

Especially if they can do the same in Indonesia..

They noted they make up 20% of all pre paid sold in Malaysia in the report...

With Indonesia a population of some over 200m and Malaysia only 20m, we can start to understand what's going on.. its 10 times the size of Malaysia..

If Malaysia makes up 80% of revenue thus far for EPY, say 80% of 3.43, ie. $2.74m for 6 months or $5.1m for 12 months (let's say after 3 years of gestation in Indonesia).. with similar 20% of pre paid sold in Indonesia by EPY, than the figures could become fairly astronomical.. we times by 10 because Malaysia is 1/10 the size of Indonesia..

So $5.1m * 10 equals $51m (assuming similar taxation exempt status).

You can understand why they want to be part of the bigger game that is China!


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## zztop (7 September 2006)

posted uk bb

Anyone listned to this???????

E-pay Asia Limited
06 September 2006


COMPANY ANNOUNCEMENTS
Australian Stock Exchange and AIM, London Stock Exchange

6 September 2006


Audio Broadcast - EPY 2006 Interim Results

Investor can listen to EPY's audio broadcast titled "2006 Interim Results" at:

http://www.brr.com.au/event/EPY/1842/14508/wmp/55cifnsfwh

To listen, simply click on the Windows Media Player, QuickTime or MP3 icon.
Additionally, the presentation can be accessed at www.boardroomradio.com where
it will also be archived for future on-demand listening.

Yours sincerely,

Jonathan Soon
Director and Company Secretary

e-pay Asia Limited
E: jonathan@e-payasia.com
T: +61416168816


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## zztop (12 September 2006)

E-PAY ASIA

We have recently published a note on e-pay Asia summarising recent changes
in the company. We are quite impressed by the number of new partners the
company is managing to sign up – there is definite progress being made. Also,
the favourable tax status of the Malaysian activities has been confirmed. This is important for immediate and short term earnings. By the time this status comes up for renewal again the company will be generating a much greater proportion of its revenue from other countries in the region. This is the most direct way possible for investors to participate in the rapid spread of mobile telephony in the Asian region. Call for a copy of our new research note.

http://www.hardmanandco.com/Research/monthly/Monthly_Sept_06.pdf


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## zztop (12 September 2006)

lookin good....and i mean really good!

http://www.hardmanandco.com/Research/epayasia_sept06f.pdf


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## stockpanther (17 September 2006)

I still think e-pay can be a great long term holder. The potential organic growth is just massive. We are paying a bit of a premium, but e-pays markets are growing at well over 20% per year.....

I'd like to think in 3 years time we will have doubled our money on this one.


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## Julia (17 September 2006)

stockpanther said:
			
		

> I still think e-pay can be a great long term holder. The potential organic growth is just massive. We are paying a bit of a premium, but e-pays markets are growing at well over 20% per year.....
> 
> I'd like to think in 3 years time we will have doubled our money on this one.




I don't mean to throw cold water on your hopes, guys, but just reading this thread,  the posts seem to be based on a lot of hope and little evidence.
"I'd like to think in 3 years time we will have doubled our money on this one"!!!!
Well, yes, I guess we would all like to think that about every stock we buy.
But why exactly do you think this is going anywhere?
The chart shows no progress in the last year.
Compare this with, e.g. any of the big banks, Woolworths, etc or any number of other blue chips, and tell me why you would stuff about with something like this?  
Wouldn't you be better off with a fewer number of some excellent blue chip company with a consistent record of growth and a reliable dividend yield and 100% franking, than risking your money like this?

I don't mean to be critical.  I'm just puzzled as to why you'd risk money on some nothing of a stock like this when you could buy something which would provide you with a guaranteed return.

Julia


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## tasmanian (17 September 2006)

Gday julia,

firstly i dont own this stock but ive looked at it alot fa and ta.once people get to know this stock a bit better it wont double in 3yrs i believe it can be a 10 bagger at least.im just sitting on the sidelines until the volumes come.if thats 1yr or 2 im in no rush.

when you say put your money in the banks etc for a guaranteed return I wouldnt be so confident about a guaranteed return with the banks over the next few years.I would be very suprised if they make new highs in the next 3years.bull markets dont last forever you have to pick your stocks carefully and not just the bluechips and expect them too rise.banks are in for a much tougher time in the next few years.

just keep your eye on epy you might be suprised might not be the next week,month but when it goes it will go.thats one of the biggest stage 1's u will come cross.You should really read the announcements and look at the financials of EPY and not just have a quick glance at the chart.Charts only tell the past not the future.ive got a feeling holders of this stock might have the last laugh.must agree though i think they are in abit early.lol

good luck


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## chris1983 (17 September 2006)

Julia said:
			
		

> I don't mean to be critical.  I'm just puzzled as to why you'd risk money on some nothing of a stock like this when you could buy something which would provide you with a guaranteed return.
> 
> Julia




Their increased revenues and expansion over the past 5 years should be enough evidence to put your mind at rest.  See link below.  They also had another increase in revenue for the quarter in 2006.  They are now making profits.

http://www.e-payasia.com/about_keyfacts.html

I think they have great potential.  You also invest in a stock such as epay-asia for faster gains.  More risk can give you greater gains.  I also believe in their technology of mobile phone top ups via ATM's.  Very clever in my mind.

PS.  I dont hold.  I just think they have potential.


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## zztop (18 September 2006)

we are expecting a bit of action here in the uk,in the coming week.we had unusually high volume on friday,with 2 large buys both 250,000.(we seemed to have had a big 100k buyer for the last week)
to say epy to double in 3 years,more like before the end of this year imo..
http://www.lse.co.uk/SharePrice.asp?shareprice=EPY&share=E-PAY_ASIA_LD_ORD_NPV


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## stockpanther (19 September 2006)

Julia...my apologies for not providing rationale in my post, I struggle to find time to post all my reasons on various forums, but over the next couple of days i will attempt to find some time to address some points.

I urge you to look at the growth characteristics of e-pay's markets (on average growing at over 20%/year for next 4 years), it's success in malaysia (and to a lesser extent indonesia) which can be replicated in exactly the same fasion in other markets and the nature of its business model.

This company is profitable, it has a proven track record of growth. It's market cap is currently about 84 million, (i think its closer to 110 million when fully diluted) which is quite high, but the company will turn in at least a $6.5million profit this year....for the growth characteristics and past success this isn't an unreasonable premium by any stretch.

That's all I have time for, for now.


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## Julia (19 September 2006)

stockpanther said:
			
		

> Julia...my apologies for not providing rationale in my post, I struggle to find time to post all my reasons on various forums, but over the next couple of days i will attempt to find some time to address some points.
> 
> I urge you to look at the growth characteristics of e-pay's markets (on average growing at over 20%/year for next 4 years), it's success in malaysia (and to a lesser extent indonesia) which can be replicated in exactly the same fasion in other markets and the nature of its business model.
> 
> ...




Stockpanther et al,

Thanks for your responses.  I'm glad to know you don't actually have money in this company.  

My point was not to do with how good the company is, or its potential, but simply that none of that matters if the market doesn't recognise and/or agree with  how great you think it is.  Presuming you are here to make money, it's only a rising SP that is going to do that for you.

So if you buy on a company's "potential" (and lots of people do - I've done it myself) and nothing else you can waste a lot of time and money.

I was just suggesting that if real money is involved, then there are more profitable places to put it.

Good luck to you all.  Hope it makes a motza for you!

Julia


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## stockpanther (26 September 2006)

I've got some money in this company. The downside isn't massive as EPS is going to be approx 3.5cents per share, placing it on not an overly high p/e. Yes this is a growth stock, but it isn't trading at a massive premium.

I encourage you to all read the 26 page report written by pegasus at this link: http://www.e-payasia.com/investor_pressandresearch.html

Another huge trade of e-pay at close today, almost 1 million shares at $0.40.


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## tasmanian (26 September 2006)

thanks alot stockpanther will have a look through it.

im not holding yet but will be eventually.i like alot what ive read about this company.one of those stocks that just cant see to get moving atm.im sure it will soon alot of potential here imo.once it starts rising i think it will be one u can hold for a few years and 5-10x your money.

thanks again


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## zztop (29 October 2006)

hello from england,just to let you all know,EPY has had a good week,volume has been good on one day we had a 100k buy  :O)  that was nice...we are expecting a rise from our base position,which seems to be happening


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## smoothsatin (29 October 2006)

There was a 10 million share sell in the last week or so. Not sure what to make of it, but it is a bit concerning.


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## shinobi346 (29 October 2006)

zztop said:
			
		

> hello from england,just to let you all know,EPY has had a good week,volume has been good on one day we had a 100k buy  :O)  that was nice...we are expecting a rise from our base position,which seems to be happening




who's "we". If you're going to use "we" please at least identify who "we" is. Do you work for Epay?


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## smoothsatin (29 October 2006)

shinobi346 said:
			
		

> who's "we". If you're going to use "we" please at least identify who "we" is. Do you work for Epay?




I would suggest he owns it?


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## stockpanther (30 October 2006)

Finally, the bloody share price has moved in the right direction! up 13.9% so far today.

3rd quarter results released, along with an upgrade in earnings from $6m to $7m, and it looks like potential for the end of year results to be $8m.

Out of the red on this one now, with a nice little 6.5% gain to show for it.


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## deftfear (30 October 2006)

The sp seems to jump on their quarterly announcements and comes down slowly afterwards, last quarter the earnings increase was 277% and it came back down to 40c within a few weeks. 

Hopefully it doesn't drop back again, as it has great potential, constant 60% growth, 2007 profit of appprox $7m and a market cap of $88m you would think that the sp would keep moving. A P/E of less than 13 and the growth rate that it has should be enough to get some upward movement, but it hasn't happened in the past as yet. Doing some investor meetings might help as well....but it has the potential to flatline again even with all the good things going for it.


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## stockpanther (31 October 2006)

15% dilution coming at end of FY..


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## zztop (31 October 2006)

we had another great day here,and we are all very happy,great results


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## stockpanther (31 October 2006)

I bought some more today at 41c

Why is the SP not going up, why is all this trading happening?

Is there something the insiders know that we don't that could screw us?


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## Ken (31 October 2006)

i dont trust the poms...

probably their way of victory as they will not win the ashes.


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## Ken (2 November 2006)

EPY...

is kicking goals...

8th seller is 94 cents...  not many sellers...  lots of buyers though...

is this a deception....

hmmm...


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## stockpanther (3 November 2006)

we've cracked 50c!! hopefully it stays above there


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## zztop (5 November 2006)

E.pay tipped in the UK's leading tip sheet

http://www.e-payasia.com/pressresearch/Investors Chronicle 22-09-06.pdf


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## Costa (11 November 2006)

Hi all,

I have been following EPY for the past year, having invested in March 06 and topping up again in July 06.  I have been involved on a couple of other share forums re EPY, however it appears this one has more people following EPY so thought I would join in!

No point repeating everything that has been said previously, but I also think EPY has good potential, provided they can continue to successfully implement their ambitious expansion plans ... and as with all stocks only time will tell. However, the results and announcements to date have been encouraging.

A few points to note:

1. As I think Stockpanther pointed out it now looks definite the shareholding will be diluted in early 2006 when Simon Loh gets a further 72.5mm shares issued as part of the original purchase consideration.  It is difficult to determine whether this will have an impact on the SP, however one would assume this is now built into the current SP. The shares are supposedly issued within 14 days after full year results announcement - which leaves the question open as to whether the shares issued will be entitled to receive the final dividend payment? 

2. We should shortly receive an update on how the negotiations with E-Charge are going. The prior announcement in relation to this mentioned formal negotiations have started however to date nothing appears to have been finalised. Hopefully this can be resolved asap and EPY starts deriving revenue from the Indian market.

3. While the results to date have been promising in terms of profit attributable to shareholders, this appears to have largely been driven by improved margins (which can be attributed to the shift towards electronic top-up). However, revenues to date do not appear to have matched the prospectus forecast (AUD 620mm FY2006). It was encouraging to see Q3 revenue top AUD150mm, and hopefully this can be maintained.

Cheers


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## dhukka (12 November 2006)

Costa,

According to the report by Pegasus the extra 72.5m shares will not effect eps until FY07. In calcualting eps for FY06 they have 200m shares rising to 273m in FY07. Pegasus have a FY06 NPAT of 7.31m and eps of 3.66cps giving a PE of 12.9x for FY06. The Pegasus report was written before the release of 3Q06 results and I suspect they may have upgraded their numbers since then. If the company makes NPAT of $7m that will put them on an undemanding PE of 13.4x. However unless my calculations are wrong or there is some serious margin erosion in the 4th quarter I would expect the company report around $8.0m NPAT for FY06. 

Why $8m? Have a look at the attached spreadsheet. The first scenario assumes the company maintains it's margins and reaches their recently stated Sales target of $600m, the second scenario assumes they only match 3Q06 revenue in 4Q06 and keep their margins constant. Even based on the second scenario the company should report approx $7.9m assuming their margins remain constant. That's eps of 3.9cps and a PE of 11.9x. 

looking forward to FY07, the biggest impediment to a major re-rating in the share price is the dilution from the extra 72.5m shares. That's a 36% dilution which means that the company needs to grow NPAT by 36% just to keep eps flat (ie 0% growth). Eps growth will pick up again in FY08 when earnings from China and India really start to kick in and the dilution is out of the way however I suspect that may be a little far out for investors to look just now.


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## Costa (13 November 2006)

Hi Dhukka,

I have also done some calculations - and agree that based on the results to date NPAT should at least be AUD 8mm, which is a very promising first year since listing. 

Interesting times ahead.


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## stockpanther (13 November 2006)

For some reason I thought the dilution was only 30m shares.

Does anyone think that 72.5m is ridiculous? 

I'm not sure how i had this oversight...it seems way too much..


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## Costa (14 November 2006)

Yeah I think it is a ridiculous amount as well - it would nearly be best for all other shareholders if NPAT was less than AUD 6mm and the dilution didn't have to occur! They try and argue that it is effectively delayed consideration for the purchase of the business - and given I don't have enough information on how the valuation was done unfortunately it is difficult to comment.

The 32mm came from the prospectus (although the way they worded it was quite confusing). Basically their are three scenarios, NPAT less than 5mm (in which no additional shares are issued), NPAT between 5mm and 6mm (in which 32mm shares will be issued) and NPAT exceeding 6mm in which 72.5mm shares will be issued which looks to be the likely scenario.

So even though Simon Loh sold a number of his shares earlier in the year (I think he now holds around 42%, following the issue of shares he will be back over 50%. Overall it seems very excessive given he has already directly benefited from the increasing share price.


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## stockpanther (14 November 2006)

Sold today Costa.

You know I love the growth prospects of e-pay, but the issuance of 73m shares is just too much in my opinion...especially when profit of 5-6m is 40m less shares.... coupled with the adjustments ot the results announcements, plus a few other shady things just makes me feel like pocketing my 20% gain and getting on out.

Trust me I can see the prospects that you guys see, it just doesn't quite fit my risk profile and I wish you guys all the best.


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## dhukka (14 November 2006)

Yeah that dilution is a major weight on the share price, as I mentioned before you need to see a 36% increase in NPAT in FY07 just to keep eps flat. Whilst the Indian and Chinese markets provide good growth opportunities in FY08 its a little far out for me personally. 

The other thing I don't like about this company is it's very thin margins. It trades on the kind of margins of a food retailer, even lower. It wouldn't take much of a hike in operating costs to see this already thin margin eroded. Although the guys at pegasus think that the likelihood of a major telco entering the resale space  is very low you could imagine what would happen to EPY if these guys decided they could do the same at a lower cost. Stockpanther I don't blame you for taking your 20% and running. It's a little too risky for my blood as well.


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## Costa (14 November 2006)

Fair enough Stockpanther - your reasons for selling a definately valid. I think that once things become clearer next year (in terms of the impact of the dilution on the SP / EPS, the level of growth EPY manages to achieve into FY2007 and how margins hold up) you may well have the opportunity to buy back in.  

As you mentioned one of the attractive features of this stock is it is one of the few companies listed on the ASX with exposure to the South-East Asian markets.

All I can say is Simon Loh will no doubt be having a good Christmas this year!


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## matti_pacman (27 December 2006)

consolidating at 50c area... it will b interesting when the full yr report comes out... and how the share prices will react when simon loh gets his 73M shares!


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## matti_pacman (10 January 2007)

making a run recently... maybe 60C when the end of yr report comes out later jan/early feb? finger cross for all holders


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## runlikehell (11 January 2007)

*73m additional shares*

Can people advise where I can find out about this additional share issue for Simon upon reaching more than $7m, is it in the prospectus?

I must say I did not read that prospectus very well, anyway. 

If you have the prospectus, anyone like to kindly send to me at cultureshop2000@yahoo.com

Thanks.

Sounds concerning, but like someone mentioned they need to grow 37%, that's not difficult I think even for 2007, I think they would do at least 50%, given the improved concentraiton of revenue from Malaysia and contributions from Indonesia.

Remembering that 2006 they grew triple digits, and not just single triple digits, but at least in the 200%!!..

For a holder who rides out 2007 without selling, it will consolidate and pick up more momentum for 2008 when 2007 was laying further foundations (ie. China)..

Fair is fair, Simon did create this company and of course he'll do what everybody else would do, but we get our rewards later...

Barriers to entry is one attractive thing about this company also!


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## Costa (11 January 2007)

Details of the deferred consideration to be paid to Simon Loh were in the prospectus (I don't have a copy unfortunately and while you used to be able to access an electronic copy via EPY's website not sure if this is still the case).

What people need to remember is that the additional shares to be issued to Simon Loh is just a deferred payment for the sale of his company - given it was difficult at the time of the reverse takeover to precisely value the company, they decided to base the purchase cost partly on first year revenues (which should be indicative of future cash flows). So while prima facie the issue of news shares and the dilution on existing shareholders may seem bad news - the goods news is the profit/growth EPY achieved.

In the absence of any signficant announcements re entry into new markets, I expect the growth rates EPY have achieved to consolidate over 2007. As I have mentioned, the FY2006 results and 2007 guidance will be key.


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## runlikehell (11 January 2007)

I've done a PE calculation and based on 287m shares, with $8m net profit after tax, with a share price of 51cents, it represents a PE of 19, now with the price around 55 to 60, its not going to change much more than say to 22.

Anyway, conservative forecast was for $11m for 07, but obviously that's too conservative, it was struck and forcasted much earlier, from a broker way before the 2 quarters results came out.

So even at $11m compared to $8m, its more than 30% revenue growth, for a PE of 22, so its certainly reasonable. with large upside for future growth.

A good story still.


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## deftfear (27 February 2007)

Does anyone smell a rat here? Net profit after tax was $6,011,365 just $11,365 greater than 6,000,000 that Simon Loh could get bonus shares for nothing. He gets a total of 72,500,000 shares for the profit being over 6,000,000, if it was less than he would receive less shares on a pro rata basis...approx 36.25 shares for every dollar of profit over 4,000,000 up to a maximum of 6,000,000. 

I really think the figures have been massaged up to over 6,000,000 so that Simon Loh gets as many shares as possible, there is a large amount of money sitting in accounts receivable, a lot more compared to 2005, yet accounts payable has barely increased. 

I will take a further look at this when I have time, but I am interested to see what other peoples opinions are. I am seriously considering finding out who the auditor is and contacting them to make sure they are aware of this fact and ask them to take more notice of revenue and expenses (which can be changed to bring the profit figure up)


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## System (4 March 2014)

On March 3rd, 2014, ePay Asia Limited (EPY) was removed from the ASX's official list following the compulsory acquisition notice from GHL Systems Berhad.


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