Report Overview

Fintech: Buy Now Pay Later sector performing strongly

  • Publish Date December 9, 2020

• China is Australia’s largest trading partner, by a very long way.  Arguably our exposure to China is greater than our exposure to COVID-19, at least in word with effective vaccines. With diplomatic relations at an all-time low, we review the size and significance of our largest trading partner. Both countries have benefited extensively from this trade which appears to have become fragile.

• Australia’s BNPL sector has performed strongly since an initial fallout following the first wave of COVID-19. For the 3 months, share prices are significantly up including APT (58%), Z1P (19%) SZL (189%) and SPT (99%).

• Notwithstanding some detractors, the share price performance reflects strong growth in online sales both in Australia and globally, and increased confidence in the Buy Now Pay Later (BNPL) sector.  Afterpay released its FY20 results, reporting strong growth in GMV (up 112% from $5.2b in FY19 to $11.1b in FY20) and Total Income (up 103% from $247m in FY19 to $519m in FY20). Afterpay now has a market capitalisation of approximately $24b, making it the largest market cap of the ASX All Technology Companies (followed by Rea Group with a market cap of $16b).

• A full interactive share price trackers and valuation multiple trackers can be found here.

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