Credit Intelligence’s Yozo and OneStep platforms will diversify the company’s revenue streams over the next few years, and complement its core businesses in Hong Kong and Singapore.

Innovative fintech company Credit Intelligence (ASX:CI1) released its full year preliminary report today which were highlighted by significant gains in key metrics, including a material improvement in its financial position.

Although revenue decreased slightly by 7% to $12.7m, the company managed to reduce both its current and non-current liabilities during the year – moves which left it with a stronger balance sheet to pursue growth in the years ahead.

Investors responded positively to the announcement, sending CI1 shares more than 15% higher in afternoon trade.

CI1’s current liabilities stood at just $4.6m at the end of FY21, compared to $14.7m in FY20.

Non-current liabilities meanwhile, were reduced from $2.1m in FY20 to $0.7m in FY21.

It rounds out a productive year for the company, in which it executed a couple of major acquisitions as well as launching the BNPL platform, Yozo.

The acquisitions included a 60% stake in debt restructuring company Chapter Two, and a 60% stake in Hong-Kong based fintech, OneStep.

Highlights for the year

CI1 says demand for credit from individuals and SMEs remained strong in FY21, as COVID-19 caused a burden on finances.

This has led to the company’s core business of Bankruptcy administration and Individual Voluntary Arrangement in Hong Kong to outperform.

CI1’s Singapore’s subsidiaries ICS and HHC have also performed well in FY21, and have contributed positive albeit reduced profits to the group results.

When the pandemic first hit, CHT saw a downturn in business due to the Government’s implementation of measures to protect Australians from the collection of debt.

As a result, there were fewer enquiries to CHT as debtors did not require the assistance of debt solution providers.  However, the business soon recovered when these measures were relaxed.

In the BNPL segment, FY21 saw the launch of CI1’s flagship Yozo platform in the Australian market.

The platform leverages Yozo’s existing database and offers unique, data-led BNPL services to the SME market leveraging its proprietary analytical software.

Developed in collaboration with the University of Technology Sydney (UTS), the Yozo platform has adopted artificial intelligence (AI) and big data analytics to power its smart lending engine.

Yozo is aiming to further enhance and improve the fintech platform to be able to lend to SME 24/7 – with assessment, approval, and funding completed within minutes – in the near future.

Moreover, Yozo has developed extensive partnerships with various SME leading industry firms to diversify its products and services to them.

The Australian segment of CHT and Yozo has started generating revenue streams for CI1 this year, which allows for revenue stream diversification going forward.

In Hong Kong, CI1’s debt management business has maintained good performance with outstanding revenue and profit, and remained stable compared to last year.

However, the Singapore business reported a decrease in revenue due to the Singapore Government continuing to provide interest subsidies to SMEs.

CI1’s new acquisition OneStep platform meanwhile, provides comprehensive corporate services to its clients.

This includes services such as the incorporation of companies, presentation of statutory corporate documents, company secretary services, bookkeeping, auditing and trademark registration services.

Although OneStep has not generated any revenue, CI1 believes that Onestep will generate revenue within the next 12 months.

Outlook ahead

CI1 expects the Hong Kong business to remain strong, and in the short term, to contribute the most to the group’s operations.

As more and more people in Hong Kong take up COVID-19 vaccines, the economy is expected to normalise and potentially increase CI1’s  business in the coming year.

In Singapore, CHT will release a mobile app and community portal to the public in the coming months.

The App will allow customers to have all of their debts in one place, enabling access to their credit file which is updated monthly by CI1.

Given that this technology does not exist in Australia, CHT has an opportunity to further engage with Australian consumers to build out an additional market vertical.

CI1 is also expected to launch the OneStep platform in mid-September 2021.

Taken in aggregate, it makes for an exciting year ahead as the company converts its M&A activity and development projects into long-term revenue generating units.

This article was developed in collaboration with Credit Intelligence, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.