Not quite. Look at the revenue generated on the gross loan book...

Not quite. Look at the revenue generated on the gross loan book (annualised)
Adjust for bad debts & provisions
Adjust for additional variable costs
Then subtract interest charges and taxes

What you end up with will be far greater than 12% of the gross loan book.


@ 52m in revenue on a gross loan book of ~220m(using the average) over 6months...  annualise the figure.
The trick here is the provisioning rate and level of bad debts. Right now they have about 1 years worth of provisions in place at any given time. It's sufficient for me, providing they can maintain this sort of return

Auto loan delinquencies are also recently at their highs (so at a macro level, this would suggest provisioning is sufficient - although 5 years of history is not much)
http://www.copyright link/business/...nquencies-reach-fiveyear-high-20160620-gpnden


As an FYI - if you assume they'll hit their target of 27.5m NPAT, then total equity (book value) will be approx. $182m
Market cap right now is 195m.

You're basically paying 1.1 times book...