MoneyMax Financial Services: pawnbroking, Malaysia and the move to the Mainboard

Moneymax Financial Services Limited began with its first store in 2008 and was listed on the Catalist board in 2013. Today, it has developed into an integrated financial services, retail, and trading platform operating 113 outlets across Singapore and Malaysia. The vision of our organization is to provide access to credit to unbanked and underbanked in Southeast Asia. Now, we we understand that for our customers, sometimes they may not be recognized as traditionally creditworthy.

And maybe because of the age, maybe because the income is irregular. It may simply also be because the assets that they have are not assets that the banks would typically like to finance. The question we ask would then be how can we then continue to serve these customers in a sustainable manner? Our answer lies in collateralized lending.

And so, if you take a look at all our lending portfolios, pawn broking, automotive financing, real estate financing. The undercurrent of it all is that they are a collateralized form of lending. Gold for pawn broking, cars, and of course real estate. While investors often assume pawn broking is highly sensitive to gold prices, it is actually driven by very different consumer dynamics.

We look to manage our businesses for the long term across different gold price cycles. We generally avoid making business decisions based on short-term price movements. I think it's important to understand the nature of the pawn broking business. Ours is primarily a needs-based business in the sense that our customers come to us for a short-term funding solution for a particular matter they may have in their personal lives.

These needs will not go away simply because the gold price is up or the gold price is down. Demand for the pawn broking business will continue to remain resilient and robust regardless of gold price changes. Malaysia is increasingly important as its revenue rose sharply by 54% year-on-year to 79 million Singapore dollars in FY25, accounting for 15% of total revenue. We have been expanding in Malaysia over the past 3 to 4 years.

the reason for this is very simple. We believe in the potential of the market. we can simply look at this from a population perspective. in Singapore, we have population of approximately 6 million.

Right across the causeway, we're looking at a population of about 35 million. Just on that potential market size itself, I believe it really explains for itself. Now, while Singapore still remains as a core market for us, we believe Malaysia is where the potential is at in in the long run. In our recent expansion plans in in in Malaysia, we have pushed out a drive-through pawn broking concept.

To date, we have 15 pawn broking drive-through outlets in Malaysia. And I think this puts us as one of the largest pawn broking drive-through operators in the region. The perception is volatility in gold prices is a risk, but in reality, it is not. The common thinking is that there is some sort of correlation between gold prices and redemption rates in the industry.

Now, the question then becomes as to why would a customer still choose to pawn the item if they're looking to maximize the liquidity in the collateral. Now, the answer we think lies in sentimental value of this. If you take a look at this, the majority of the collaterals that we receive from our customers tend to be personal artifacts that have some sort of personal significance to them. So, fundamentally, pawn broking customers are people who choose to believe that they can redeem their items back eventually.

What we can share is that our rate of forfeiture, which is the non-performing loans in in in this business, has historically always been in low single digits. We believe price movements do not exactly affect, you know, the redemption pattern of our customers. The benefits of its coming migration to main board is manifold. We have been listed on the Catalist since 2013.

From then to where we are today, I think the company has grown quite a fair bit. We believe the move into the main board will be aligned with the company's organizations' ambitions for the next few years as well. It's also important to us because we feel like the move to the main board would allow us to enhance our asset base. And this will definitely raise our profile in the capital markets and aid us in our future initiatives moving forward.

The group's FY25 net profit surged 83% year-on-year to 76 million sing dollars. And FY25 revenue increased 39% year-on-year to 542 million sing dollars. 7% in FY24. With record FY2025 earnings, expanding margins, its growing presence in Malaysia, and other catalysts including its impending main board transfer, MoneyMax is poised for its next phase of growth.

Currently, MoneyMax is trading in line with the Singapore peers at between 7 and 10 times current earnings.