ASA International Group PLC (lon:asai)
ASAI – Never Heard Of Them!

ASA International Group PLC Financials

ItemCurrent PeriodPrevious Period
Year20182017
Period12 Months12 Months
Revenue£141m£107m
Earnings
Adjusted Earnings
EBITDA
Adjusted EBITDA
Statutory Profit£25m£29m
Adjusted Profit
Total Debt£277m£268m
Net Debt£213m£215m
ASA International Group PLC Share Price
Grade:No grade has been assigned to this company
Title: ASAI – Never Heard Of Them!
Company: ASAI - ASA International Group PLC
Share Price Then: 55.2p
Author: Ian Smith
Date: Mon 27 Apr 2020
Comments: ASA International Group PLC are provider a of Micro Finance in Africa and Asia, their average loan value is around $189.

Floated in July 2018 they have mostly traded in the 260p-450p range, tumbling to 60p starting in March, despite this they are not a new business having started in 2007 with $2m from the Gates Foundation.

On the 16th of April they announced that they would delay the 2019 full year accounts, under normal circumstances this is usually a sign of a big issue, but in this case it is about the impact of COVID-19 post the reporting period.

The year end trading update was pretty positive, 2.5 million clients up by 14%, $466m of loans up by 23%

The negatives are significant currency depreciation in Pakistan and Ghana and results slightly below expectations because of adverse market conditions in India, Nigeria and Sri Lanka.

Overall loan portfolio quality remains good with PAR>30 (Portfolio At Risk due to no payment/overdue payment of 30 days or more) at 1.5% but in Sri Lanka PAR>30 is up to 10%.

Historically its loan book has been attractive, the 2018 results say Since inception, ASA disbursed more than USD3.3bn in loans, less than USD 9m … has been written off.

With PAR>30 = 0.6 in 2018 and 1.5% in 2019 this measure seems to be growing.

The downsides for me are currency exchange risks and the costs of hedging against them and that a lot of the money that they lend is not theirs. In 2018 they had made $378m of loans but have about $280m of debt.

Another concern is the objective of Gradually increase volume of loans per client. Micro Finance has worked in the past because the borrowers have felt that they have been offered a favour and honour requires that the loan be repaid. Surely the more a Micro Finance operator moves into a more conventional bank/customer model the more likely it is to see conventional default rates.

The really big problem for me is that the average daily trade volume for the company’s shares is around 100,000 which seems quite low for a company with a market cap of around £60m now or £300m only a few weeks ago.
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