Disruptive Electronic Payments Company GH Capital,
Post# of 273249
In an aged bull market, investors must focus on economic trends in order to find alpha, or outperformance. While marijuana and lithium may be two of the major standout industries, there are others that are being overlooked and under-reported. Two industries, in particular, that have strong growth and potential are digital payments and the global IPO market.
Digital Payments
The global digital payments industry is poised for strong growth for the next several years. According to Statista, the global total transactional value of digital payments is forecast to post a compound annual growth rate (CAGR) of 14.8% from 2017 to 2021. Not surprising, digital commerce continues to be seen as the main driver of the transactional growth. Digital commerce has effectively pushed traditional retail to the brink of collapse, as retail bankruptcies are hitting levels not seen since the Great Recession.
Global IPO Markets
Recently, EY, a research and consulting firm, published a report showing that the first quarter 2017 was the strongest quarter for global IPOs since 2007. During Q1, there were 369 IPOs raising $33.7 billion from the investment community. This represents a 92% increase in IPOs and 146% increase in proceeds from the same quarter 2016.
The massive U.S. technology IPO of Snap, Inc. (NYSE: SNAP), low volatility, and global economic growth are cited as the main drivers of the red-hot initial public offering market. As a result of the findings, EY continues to forecast a very active global IPO market for the remainder of 2017.
While there are several notable companies in both industries, there is one company that stands to benefit, and capitalize from both: GH Capital, Inc. (OTCQB: GHHC).
Overview: GH Capital, Inc. (OTCQB: GHHC)
GH Capital, Inc. (OTCQB: GHHC) operates as a FinTech holding company, with two main businesses: Digital payment processing and an IPO advisory service.
ClickDirectPay
The FinTech company’s digital payment platform is called ClickDirectPay, which allows digital wire transfer transactions for online customers and merchants. The platform currently is focusing on the European digital payment processing market.
As of May 2017, ClickDirectPay has 350 online merchants. Constantly updating and evolving, GH Capital, Inc. (OTCQB: GHHC) management is forecasting 10,000 online merchants by 2018. This shows that the planned upgrades and changes are likely to increase business and jumpstart earnings growth.
“Using ClickDirectPay, the customer has the ability to do a bank transfer quickly, easily and securely with his personal online banking information. After using ClickDirectPay the merchant will receive a confirmation for the transaction in real time.
As stated on the Company’s website… “A risk-free delivery of goods and services and the accounting transactions of electronic- money are guaranteed,”
IPO Advisory Service
As the red-hot global IPO market continues to thrive at its 10-year high, many investment research firms and banks seem to believe the bullish IPO market is likely to continue through at least the remainder of 2017.
GH Capital, Inc. (OTCQB: GHHC)’s provides private companies with a seamless path to a public listing. Rather than being bogged down with hiring and managing, attorneys, accountants, investor relations and other “go public” professionals, GH Capital, Inc. (OTCQB: GHHC) provides a one-stop shop and takes care of the entire process.
This not only saves money, but allows the client to focus on why they are going public in the first place… To grow their business.
GH Capital Inc.’s (OTCQB: GHHC) competitive advantage is the provision of one point of contact for taking firms public. The company helps small firms in reducing their point of contacts for going public. It uses in-house capabilities and specialist partners for a seamless initial public offering. GH Capital Inc’s services mimic outsourcing and that’s one of the reasons they’re cost effective.
As the global IPO markets continue to see explosive growth, GH Capital, Inc. (OTCQB: GHHC) could benefit greatly, as it attracts new clients for its private to public straightforward and cost-effective means to a listing. The company plans to step up marketing and awareness efforts of its IPO advisory service in order to draw in new clients.
GHHC: Financial and Industry Analysis
GH Capital, Inc. (OTCQB: GHHC) holds a market cap valuation of $60.45 million, as of May 2017. Furthermore, the FinTech company maintains a share structure consisting of 400 million authorized shares, 59.85 million outstanding shares, and a micro float of 700,250 shares, as of April 2017.
As the company continues to build its online merchant base, management is forecasting 2018 to be a strong year. Specifically, the company is aiming to grow its online merchant base to 10,000, which translates to roughly €3.5-4 million in revenue. In addition, the company plans to continue to be active in acquiring new private to public clients.
Here are five companies that have somewhat similar operations to GH Capital, Inc. (OTCQB: GHHC) and could be used to find a fair value for the company:
Computer Services, Inc. (OTCQX: CSVI) operates as a diversified mobile and online banking company. The digital payment processing company has a market cap value of $623.11 million, as of May 2017. Furthermore, Computer Services, Inc. has a share structure consisting of 60 million authorized shares, 14.01 million outstanding shares, and a float consisting of 12.97 million shares, as of November 2016. During the payment company’s last quarter, which ended on November 30, 2016, it reported total revenue of $60.54 million and net income of $8.33 million.
Moelis & Company (NYSE: MC) operates as a corporate consulting firm, which advises companies on strategic and financial matters. The company provides a number of specific advising specialties, including: IPOs, mergers & acquisitions, restructurings, capital markets, recapitalizations, and more. As of May 2017, Moelis & Company had a market cap of $2.07 billion, 26.03 million shares outstanding, and a float consisting of 25.91 million shares. During the first quarter of 2017, the corporate advisory company reported total revenue of $173.26 million and net income of $15.28 million.
Evercore Partners, Inc. (NYSE: EVR) is a diversified investment banking advisory company, which operates two core business segments: Investment Banking and Investment Management. Within the Investment Banking unit, the company operates its Advisory services business, which covers everything from IPOs and M&A to divestitures and strategic transactions. The investment banking advisory firm maintains a market cap of $3.37 billion, 41.11 million shares outstanding, and a float consisting of 39.33 million shares, as of May 2017. During the first quarter of 2017, Evercore Partners, Inc. reported total revenue of $392.02 million and net income of $80.77 million.
PayPal Holdings, Inc. (NASDAQ: PYPL) operates as a digital payment solutions company. The company’s technology-based platform allows users to send payments through mobile or online access. In addition to be a consumer payment platform, PayPal Holdings, Inc. has a variety of merchant solutions to support e-commerce and payment solutions. Overall, the company operates a diverse portfolio of payment processing platforms: PayPal, PayPal Credit, Braintree, Venmo, Xoom and Paydiant. As of May 2017, PayPal Holdings, Inc. maintains a market cap of $59.69 billion, 1.21 billion outstanding shares, and a float consisting of 1.14 billion shares. During the first quarter of 2017, the payment processing company saw total revenue of $2.98 billion and net income of $384 million.
Visa, Inc. (NYSE: V) is widely known as being a traditional payment processing company, which provides a massive retail electronic payment network for buyers and businesses. However, as mobile computing has continued to advance, Visa, Inc. and rival, Mastercard, Inc. (NYSE: MA), have put a major emphasis on “digital wallet” capabilities. The digital wallet allows consumers to use their smartphone in order to pay for goods and services. The move into alternative payment processing shows that there continues to not only be strong growth, but that the payments industry is evolving. As of May 2017, Visa, Inc. holds a market cap of $125.50 billion, 2.46 billion outstanding shares, and a float consisting of 1.86 billion shares. Visa, Inc. reported total revenue of $4.48 billion and net income of $430 million, during the first quarter of 2017.
In order to achieve outperformance, it is important to understand market trends. Recently, marijuana and lithium seem to be the market’s main focus, as very compelling growth stories continue to unfold within these two emerging industries. However, economic data shows that the global digital payments and IPO markets are forecast to see very impressive growth. Yet, the digital payment industry with an annual growth rate of 14.8% and the global IPO market at a 10-year high, seems to be under-reported and under-appreciated. GH Capital, Inc. (OTCQB: GHHC) is in a great position to be a viable contender in both the digital payments and IPO advisory markets, thanks to the company’s streamlined, stress-free and straightforward approach. As the company continues to get its ClickDirectPay and IPO advisory business in full-swing, management says they are preparing for massive growth in 2018.
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