Steady GCash growth seen pre-IPO
Mynt Inc.’s next phase of growth will depend on getting existing GCash users to use more financial services, analysts said, as the fintech giant prepares for its stock market debut on Tuesday.
Investment banker Stephen CuUnjieng said Mynt’s extensive domestic reach leaves less room to expand through new users.
Raising average revenue per user will therefore be a key challenge.
CuUnjieng said investors could expect steady but modest returns as the company grows at a pace more typical of a mature business.
“Shareholders who are patient will probably be happy because it is a different kind of financial services company that is very efficient and has fantastic scale,” he said.
Mynt’s P60.9-billion initial public offering (IPO) covers 9.23 billion primary and secondary shares priced at P6.60 each.
The offer valued the GCash operator at about P441.5 billion. The sale of primary shares is expected to generate P10.6 billion in gross proceeds intended to support expansion.
CuUnjieng said strong demand at the offer price reflected investor confidence in the company’s fundamentals.
Eric Jurado, hedge fund manager at SEA Focus Portfolio, said Mynt’s large customer base, growing financial product offerings and economies of scale could support compounded earnings growth.
“Its historical earnings growth and returns on equity offer evidence of its ability to generate profits. The longer-term question is whether it can sustain those results while continuing to innovate, manage risks and grow earnings per share,” Jurado said.
He added that wider adoption could attract more merchants and partners, while additional services could encourage existing customers to use the platform more frequently.
GCash’s services also enable small merchants to accept electronic payments and give consumers access to financial products.
Jonathan Ravelas, senior adviser at Reyes Tacandong and Co., highlighted the platform’s financial inclusion and sustainability initiatives.
Ravelas said mobile access to payments, savings, investments, insurance and credit had helped bring unbanked Filipinos into the formal financial system.
He also cited GForest and GCash’s partnership with the International Finance Corp. and Ant International on a Sustainability Impact Scorecard.
The tool aims to help Philippine micro, small and medium enterprises assess and improve their environmental, social and governance performance.
