KGI Research Singapore

Singapore's leading broker offering Futures, FX, Equities and Wealth Management.

OxPay Financial (OPFL SP)

Company Update: 15 March 2022

From losses to profits

  • The turnaround. OxPay announced adjusted net profit of S$3.2mn in FY21 VS FY20’s net loss of S$1.9mn, driven by a surge in revenue of 53.2% YoY in FY21. Gross profit margin jumped to 62% in FY21, from 32% in FY20.
  • Not just a payment service provider. Besides variable revenue generated from its Merchant Payment Services (MPS) segment, the company also has merchant acquisition revenue and buoyant steady recurring income generated under its DCES segment.
  • Multiple partnerships to drive top-line. OxPay recently entered into multiple partnerships in the “Buy Now Pay Later”(BNPL) space and expanded service offerings for merchants via neobanking facilities with its partnership with TranSwap. Capitalising on its specialty in the F&B and retail space, OxPay has also acquired up to 20% stake in AppPOS, a network of over 300 F&B and retail merchants.
  • We maintain OxPay with an OUTPERFORM recommendation but revised our TP down to S$0.30 due to the overall de-rating of valuation multiples across the sector.  

FY2021 financials: A turning point.

OxPay’s revenue jumped 53.2% YoY to S$17mn in FY21, while gross profit surged nearly 2-fold to S$10.6mn. Gross profit margin improved significantly from 32% in FY20 to 62% in FY21, mainly due to an increase in remittance activities from its merchants. Even though the company was in a loss-making position of S$26.8mn in FY21, this was due to one-off RTO listing expenses of S$26.4mn and non-recurring expenses relating to the RTO transaction of S$3.6mn. Excluding these, adjusted net profit stood at S$3.2mn, a turnaround from losses of S$1.9mn recorded a year ago.

Riding on the BNPL trend.

OxPay announced in December 2021 that its wholly-owned subsidiary, MC Payment Malaysia, has entered into a partnership agreement with IOU Pay (Asia). IOU Pay has 20 years of experience in the mobile banking and digital payment space and provides BNPL services for consumers in Malaysia. Pursuant to the partnership, OxPay will be able to add the BNPL option into its online e-invoicing, Quickpay and web payment acceptance platform in Malaysia, thereby catering to the growing consumer demand for deferred payment choices. In addition, OxPay has also collaborated with BNPL brand PaySlowSlow in Singapore and will provide the brand with payment gateway and merchant acquiring services. PaySlowSlow Singapore targets to roll out BNPL services in 1Q22, with 500 merchants and monthly gross transaction value of approximately S$1.0mn, which is expected to translate into additional processing volume for OxPay.

Reinforcing foothold in the F&B and retail space

OxPay will acquire up to 20% shareholding in AppsPOS, enabling it immediate access to AppsPOS’ network of over 300 F&B and retail merchants for both E-commerce and Cloud-Based Point of Sales Solutions. AppsPOS has more than 1mn users on its mobile apps/website in Asia, facilitating over S$300mn worth of Gross Merchant Value annually.

Neobanking in UK and European markets.

OxPay announced earlier this year that it has partnered with TranSwap, a global banking-as-a-service platform with multiple central bank licenses across the UK, Singapore, Hong Kong and Indonesia. TranSwap will integrate its neobank technology stack in OxPay’s current platform. With this partnership, OxPay will offer neobanking products such as the issuance of local and global virtual name bank accounts to clients for collection, payment and conversion of currencies, as well as global cross-border payment and issuance of cards.

Valuation & Action:

We maintain OxPay with an OUTPERFORM recommendation but revised our TP down to S$0.30 due to the overall de-rating of valuation multiples across the sector.  Our TP is based on 18x P/E (Previously 25x) to FY22F EPS of S$0.017.


Downward pressure on margins due to saturated market.


Subscribe Now