At the time of writing, the share price of Credit Intelligence Ltd [ASX:CI1] is down more than 12%, trading at 6.8 cents.
You can see a gigantic spike in the CI1 share price in the chart below which tells a familiar BNPL story:
We take a look at the announcement that sparked the massive Credit Intelligence move and the financial report that followed. We also look at the outlook for the CI1 share price.
Highlights of the launch of the BNPL product from CI1
Here are the highlights from the announcement that sparked that big spike (in the company’s own words):
- “CI1’s unique BNPL service launched for the SME market leveraging the AI engine developed in collaboration with UTS Sydney offering borrowers a range of exclusive features started SME lending business
- YOZO Pay BNPL offers SME borrowers a line of credit with more flexible repayment frequency options where costs are only generated on the drawdowns of the facility
- Using the AI engine, YOZO Pay BNPL offers same day loan approvals and automatic borrower limit changes based on repayment histories with minimal human interaction required in the process
- YOZO Pay financing is provided from the income of the business without the need for a real estate guarantee‘
And the semester highlights below:
‘• Half-year profit up 42% compared to the previous half-year
- Half-year profit attributable to members of the parent company up 25% compared to the previous half-year
- Turnover up 21% compared to the previous semester‘
What to do with all this?
Here is my opinion.
CI1 share price outlook
If you look at the most recent semester, this business is actually profitable, and both its revenue and profits have increased by about 20-25%.
Not bad by BNPL standards so maybe the hype is somewhat justified.
That being said, I’m still of the opinion that we may be reaching a saturated market on the ASX with so many new entrants into the BNPL space.
Which in turn can play a role in regulatory risk, in addition to competition risk.
As with many small cap breakouts, today’s retracement is not surprising either.
From there, some sideways trading can take place while investors wait for more news from the company.
You can see a detailed breakdown of CI1’s prospects in the video below:
You can also check out our special fintech report here – all of the companies featured are still quite small with serious growth potential.
For Silver morning