MC Payment - RHB Invest 2021-05-05: Riding The E-payment Bandwagon


MC Payment - Riding The E-payment Bandwagon

  • MC Payment (SGX:TVV) - the first SGX-listed proxy to growth in the ASEAN digital payments industry given its presence in four countries.
  • Gross transaction value of digital payments in ASEAN is expected to double to US$1,200bn by 2025 from US$600bn in 2019.
  • Provides an integrated digital payment infrastructure for merchants by offering a one-stop solution to accept all forms of digital payment and enabling them to run their businesses both online and offline.
  • Experienced management team with extensive industry experience and proven business planning and execution capabilities;
  • Similar company in the region has delivered ~30% profit CAGR in the last five years and is trading at over 100x P/E.

MC Payment - Company Profile

  • Established in 2005 and regulated by the Monetary Authority of Singapore (MAS), MC Payment holds a major payment institution licence and is a Singapore-based, online-to-offline financial services technology company with a focus on servicing merchants in the retail, transportation and F&B industries.
  • MC Payment (SGX:TVV) became the first fintech company listed on the Singapore Exchange (SGX), through a reverse takeover (RTO) of special purpose acquisition company, Artivision Technologies (SGX:TVV).
  • MC Payment has a presence in four countries, namely Singapore, Malaysia, Indonesia, and Thailand. It operates in two business segments:
    • merchant payment services (MPS) and
    • digital commerce enabling solutions (DCES).

MC Payment - Investment Highlights

Strong growth drivers for payments industry in ASEAN.

  • South-East Asia’s demographics and rising affluence has created a ripe ground for rapid growth in the digitalisation trend. As per research, ~60% of the ASEAN population is below 35 years of age and more than 90% of South-East Asians are connected to the internet primarily through smartphones. Once economic growth returns, higher disposal income will drive consumer spending in ASEAN.
  • The COVID-19 pandemic has given a shot in the arm to digitalisation trends as consumers and SMEs have adopted digital financial services like never before. Barriers to adoption of digital payment were lowered by the pandemic as the move towards online transactions and increased trust of online transactions have accelerated the shift away from cash.
  • There is also increased encouragement and support from regulators for consumers to adopt digital financial services. We believe there will be a rise of omni-channels with increasing merchants having an online-to-offline presence. As per the e-Conomy SEA 2020 report by Google, Temasek and Bain, the gross transaction value of digital payments in ASEAN is expected to double to US$1,200bn by 2025 from US$600bn in 2019.

First SGX-listed proxy to growth in ASEAN digital payments with high barriers to entry.

  • MC Payment is the first digital payments company to be listed in Singapore, making it a proxy for local investors looking to ride on the rise of digital payments. With its business presence in Singapore, Malaysia, Indonesia and Thailand, MC Payment is also well placed to benefit from the rapid adoption of digital payments across ASEAN. Moreover, the payment sector is highly regulated, and licences take a long time to be awarded, serving as high barriers to entry to the sector.
  • In Singapore, MC Payment is one of only four companies to have the merchant acquisition licence.

Omni-channel capabilities in merchant payment services (MPS).

  • As a payment gateway and processor, MC Payment provides a unified platform and smart software, which can either be installed onto or integrated with smart devices for merchants with physical stores. Alternatively, it could also integrated into merchants’ websites and applications. This enables merchants to run their businesses online and offline.
  • As a payment aggregator, MC Payment also enables merchants to adopt digital payments, by giving them a one-stop solution to accept all forms of digital payments under a unified platform. MC Payment collects a fee for each payment transaction it processes. MPS accounts for 85% of its revenue and generates ~50% GPM.

MC Payment - Report Card

Latest results.

  • For 1H20, MC Payment reported revenue of S$6m (+127% y-o-y) mainly due to growth in the number of transactions and value of transactions it processed. This was attributable mainly to an increase in the number of merchants and number of payment methods offered by the group. 85% of 1H20 revenue was accrued from MC Payment’s core business of MPS. Gross profit doubled to S$2.5m in 1H20 from S$1.2m in 1H19.
  • MC Payment reported a net profit for S$0.7m for 1H20 vs a net loss of S$1.3m in 1H219.


  • The co-founders and Executive Directors of MC Payment, Anthony Koh and Kim Moon Soo are also the CEO and COO. Each has over 16 years of experience in the internet or fintech industries, in particular, relating to digital payment processing. They have both overseen the growth of MC Payment in Singapore, and regionally since its inception in 2005.
  • Ching Chiat Kwong, CEO of property developer Oxley (OHL SP, BUY, Target price: S$0.27), is the controlling shareholder of MC Payment.

MC Payment - Investment Case

A good proxy to rising adoption of digital payments in ASEAN.

Key risks.

  • Loss of key merchants and partners, increased competitive intensity in the e-payments landscape, regulatory risks, and a sharp economic downturn.

MC Payment (SGX:TVV) is highlighted as one of the RHB's 20 Jewels (2021 Edition) - Top Singapore Small Cap Companies.

Shekhar Jaiswal RHB Securities Research | https://www.rhbinvest.com.sg/ 2021-05-05
SGX Stock Analyst Report NOT RATED MAINTAIN NOT RATED 99998 SAME 99998