Expectations for 2017 Results, page-4

I think you are being very optimistic, particularily the dividend assumption. They are retaining profits to loan back out to customers given the funding costs are so high. 2.75c is appropriate, if a dividend at all really. Why not retain all the profits to re-invest into the loan book? A crazy idea?

I am just going on the May presentation which is a great projection. That is 18c a share and a great result if achieved. From there I'm personally assuming 10% per annum eps growth for the next few years thereafter. This is similar to the forward FY18(20c) and FY19(22c) forecasts I've seen. I think 10% is realistic given last 5 and 10 years has achieved 11.9% and 12.5% eps growth respectively. As the business grows this will become harder and harder to achieve this figure, as you can imagine. However, they do have low penetration into the auto loans market so here's hoping there is plenty of scope there to achieve that 10% longer term number.

Yes, they can cut costs and refinance and better rates, 12% is a lot, and this may boost things further but that is just a bonus.

If this comes to pass I actually get a $4+ valuation, but I doubt it would get there. That would be a FY17 price to earnings of 22 which isn't unreasonable given the growth ahead, but because the sector is out of favour, and broadly finance stocks don't trade on those multiples, it is unlikely. Look at CCP, it has an amazing track record of returns, lots of growth projected and it trades on a multiple of 16.

It is certainly extremely 'cheap' by traditional metrics. 15 times the forward FY18 20c eps forecast is $3 and I think that is a more realistic price target for the medium term. So 100% upside, but with the industry unloved a lot of patience may be required for MNY to achieve a traditional valuation. Then you have a new set of higher numbers by that time justifying a higher valuation ect ect. I think the voting machine/ weighing machine analogy is a good fit for MNY.

I did get an opinion that because the car loan business is still quite new it is still a bit unproven for the market. Quote, 'unproven business model'. The secured car loans business is outside what used to be their core business of unsecured cash loans. So, potentially after however long MNY proves it is a serious player in the space then it may command a higher valution, combined with the undelying earnings driving it up.