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KinerjaPay Corp: DEEP DIVE
OVERVIEW

KinerjaPay to use $200 million investment for growth, acquisitions

The growing company’s share price gained 90% last week on news of the cash injection.
US dollars
OVERVIEW: KPAY The Big Picture
Wall Street will consider the investment when chairman Edwin Witarsa Ng gives an address at Mar-a-Lago this week

KinerjaPay Corp (OTCMKTS:KPAY) is ready to grow its South-East Asian micropayments and microloans business while evaluating potential acquisitions over the next 12 months.

The American company started in Indonesia and offers digital payments and loans services in the South-East Asian country.

READ:  KinerjaPay surges after receiving commitment from Indonesia’s Wahana Group to invest $200M

These services includes the company’s KinerjaPay IP digital payments and e-wallet system (KPAY) and KinerjaFund (KFUND) microloan service.

Delaware-incorporated KinerjaPay’s focus is on regions with large un-banked and under-banked populations, and areas with minimal use of traditional credit cards.

The company’s share price gained $0.18, or 90%, to $0.38 last week after it reported Indonesia’s PT Investa Wahana Development had agreed to invest $200 million in the company.

KinerjaPay’s market capitalisation was at $7.03 million on Friday evening after last week’s heavy gains.

Over-the-counter-traded KinerjaPay plans to use the proceeds of Wahana’s investment to advance its peer-to-peer lending operations, and make corporate acquisitions and strategic investments.

KinerjaPay chairman & CEO Edwin Witarsa Ng told Proactive Investors the investment would “change everything” for the small company which expected to grow in 2019 and work towards a Nasdaq Stock Market listing by 2020.

Ng said, “We have plans as to how to utilize the funds to make sure that we can maximize the whole investment, so 2019, 2020 will be very exciting years for us.”

KinerjaPay expects to finalise the Wahana investment on January 17, 2019.

Organic growth and acquisitions tipped for this year

Speaking on the company’s expected milestones for the next 12 months, Ng said “We have many acquisitions in the plans.”

Ng said the company expected to grow each of its divisions and evaluate potential acquisitions. “With our business units, we are doing mobile payments, payment portal, e-commerce and also the (payments for) games for the mobile gaming industry.”

In May 2017 the company partnered with UniPin parent company PT 24 Jam Online to offer its KPAY system as a way for UniPin’s more than 1.5 million users to top up their credit to play games across Facebook, Google Play, Steam Wallet and Garena.

Corporate leader Ng said KinerjaPay’s in-house departments were “ready to grow.”

“Number one, we will probably focus internally on things that we already have, Ng said. “Second of all, we will probably reach out and expand the business, but of course there are many categories or so-called prerequisites that we are looking at.

“We’re not going to acquire random businesses using the big money, we have to make sure that the companies that we acquire are going to have to back our business model.”

The chairman-CEO forecast how that business model would change as more devices gained internet connectivity.

“KinerjaPay is a digital company and we have to do things the Internet of Things way — we have to enable many things to make social life easier and affordable to people.

“That is the most important thing in all these businesses we potentially acquire.”

An Internet of Things (IoT) approach involves extending internet services from electronic devices, such as phones, into everyday objects such as vehicles and home appliances.

Ng said KinerjaPay would assess start-up digital companies in Indonesia, South-East Asia and the US this year as it sought to acquire the start-up companies once known as dotcoms.

A mobile top-up business acquisition

The company has already agreed to buy up Indonesian mobile prepaid top-up provider PT Mitra Distribusi Utama (PT MDU), reporting the agreed transaction would add $39 million to company’s annual revenue base.

KinerjaPay had a $1.59 million, or 728.5%, growth in total gross revenue to $1.84 million in the March 2018 financial quarter, when compared to March 2017 quarter results.

The $2.5 million acquisition expected by February 2019 is set to increase annual revenues by about 10-fold, using last year’s March quarter figures.

KinerjaPay’s Ng highlighted the expected growth to the company’s customer base from the MDU acquisition.

It will grow the company’s audience by up to 3.5 million users from its existing base of half a billion users.

Ng said, “Once we have completed the acquisition, we will have a massive database of about three million, three-and-a-half million customers.

“We can cross-sell other products that we have to these three million customers and have these customers shopping online, collecting points (and) paying utility bills using KPAY, instead of just buying prepaid top-ups from the companies that run mobile businesses.

“We could also offer them some peer-to-peer (P2P) lending solutions, (the KFUND) microloans that we announced four months ago.”

The company also plans to buy back stock on the open market in accordance with Securities and Exchange Commission rules.

Ng said the buy-back would be in the order of $5 million and would signal KinerjaPay’s confidence in the company.

A South-East Asian growth opportunity

Commentators have compared Indonesia to the China of 2008, with consumers in Indonesia only receiving broadband in the past four or five years.

Estimates compiled by Statistica put the number of internet users in Indonesia at 112.27 million, tipping this figure would grow to 120 million in 2019 and to 139.54 million in 2022.

Internet penetration in Indonesia was at 50.4% in June 2017.

Digital companies in the South-East Asian country have the potential to grow bigger as internet use becomes ubiquitous.

Ng highlighted an estimated 90% of cell phone users in Indonesia have prepaid accounts for their devices, making the company’s KPAY system a good option for credit top-ups for mobile devices, and utility bill payments.

He said KinerjaPay hoped to expand its service offering to other countries in the South-East Asian region and was engaged in potential partnership negotiations with a party in Malaysia.

In the three years to January 2018, the number of internet users in South-East Asia increased by 162 million people to more than 370 million internet users.

Malaysia had 25.08 million internet users in January 2018, with its internet penetration being 78.8% in June 2017.

KinerjaPay CEO-chairman Edwin Ng will be the South-East Asian region keynote speaker at the WallStreetConference this Wednesday, January 16, 2019, at Mar-a-Lago Palm Beach in Florida.

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