Eservglobal Share Discussion Threads

[gerihatrick] 10/12/2017 14:58

In my diary the 31st December is a Sunday!

[bamboo2] 10/12/2017 13:23

For info, 31 December 2017 Results [for 12 months to 31 October 2017]

[astralvision] 08/12/2017 16:20

excellent piece Hastings.
This is not some 10% minority holding , but 35% inventor of the system. With seats on the board the minority partners are intimately aware of what is happening. Yes, mastercard hold the upper hand, there is no denying that, in fact I'm pretty sure they wouldn't have come on board unless they did. In that respect, I'm quite surprised that ESG managed to get a 35% slice of the pie, that's one big slice of pie!
Yes, Mastercard will take out the minority partners at some point, but that will only be after Homesend has grown substantially and the t/out price will reflect that. it's in everyones interests for all parties to co-operate and get on. 10 bagger? Maybe not, but I still expect 'several bags' from here, given the risk/reard, I'm very happy with that.

[wigwammer] 08/12/2017 16:11

Kin - that is interesting, but with half the board seats and a 45% combined share I think the minorities retain serious clout, as Hastings alludes.I also believe that in an age where large companies frequently rely on smaller tech peers to keep up, it is in MC's interests to be seen to play fairly or get a reputation for not be a desirable partner.I agree with your conclusion - likely outcome is a deal in the not so distant future at a significant premium, but unlikely to be the 10+ bagger suggested by the forecasts.

[kinbasket] 08/12/2017 12:08

Apparently so. According to the note, Mastercard have the whip hand and there is no remittance without their say so.

[wigwammer] 08/12/2017 11:54

"I think the clue to Mastercards intentions is the lack of a mechanism for remitting profits from HomeSend back to BICS or ESG.."Is that true? Between them bics and esg have 3 of the 6 seats on the board.

[kinbasket] 08/12/2017 11:47

I've had a couple of nibbles here this morning. The note is interesting. The investment case is pretty much as I thought. If they have something (and on balance I think they probably have) there is no way Mastercard will allow that benefit to accrue to another small business. So if they have something, they'll get bought out, probably in the not too distant future, before any big money starts rolling in and pushing up the value. If they don't have something of value in Homesend then there's not much else here. In fact I'd rather they just shut up shop on the rest of the business and awaited the outcome of Homesend. It's a fairly binary outcome.

The unfortunate thing is the valuations based on massive future revenues are kind of pointless. If there is any hint of that happening, Mastercard will take it in house in a flash. This means Shareholders here are unlikely to get a ten bagger, They'll be settling for a take out value. I'm happy with that as a target.

I think the clue to Mastercards intentions is the lack of a mechanism for remitting profits from HomeSend back to BICS or ESG. I don't think Mastercard have any intention of that ever happening.

GLA. and thanks for the info.

[wigwammer] 07/12/2017 17:58

Just to chip in my tuppence again.Homesend/MC is the technology that enables the banks (with 90%+ of the western market) to compete with new entrants in international money transfer.I suspect it sits in a pretty unique and advantageous position right now.

[kinbasket] 07/12/2017 14:27

Got it thanks..

[astralvision] 07/12/2017 14:20

kinbasket, replied and sent

[kinbasket] 07/12/2017 13:33

PM sent, thanks

[astralvision] 07/12/2017 13:23

KinbasketIf you send me a pm with your email I can send the FinnCap note to you.

[kinbasket] 07/12/2017 13:13

Agree with your final point, that's why I'm looking at ESG. I need to get my head around how HomeSend fits into the bigger picture.

Have you got a copy of the Finncapp ? or is it available anywhere ?

[astralvision] 07/12/2017 12:41

kinbasket

Final thought for now, you mentioned WeChat, Alipay, which are run by ten cent and Ali baba respectively. Now the valuations for those two companies are something like $500bn and $350bn. Yes, they are mega and into practically everything and very successful to.
The point being you can invest in Mastercard's HomeSend via ESG, ESG having a market valuation of under £100m and 35% of Homesend. You even get ESG's exisiting business chucked in as well, ok, the existing business is not worth a lot, pennies, but when your share price is only 10p even that is worthwhile.
It's not very often you get a chance to get a significant stake in something like Homesend and I'm taking full advantage of that.

[astralvision] 07/12/2017 12:29

The note really needs to be read in full to understand there is a pretty amazing opportunity on offer here.
yes, brokers can often get it wrong, but we are talking about very significant upside just from already signed contracts, let alone further deals which are bound to happen.

[astralvision] 07/12/2017 12:26

This is the opening paragraph to the 24 page Finncap broker note from just over a month ago:

It’s now ‘when’ not ‘if’ for HomeSend CORP

HomeSend, eServGlobal’s JV with Mastercard and BICS of Belgium, has
always represented a very exciting prospect. With the backing of the giant
credit-card agency, it stood a good chance of securing a significant share of
the US$600bn global remittance market. With a relatively minimal cost base,
the transaction volumes from even a tiny share would have delivered
US$100m in earnings for eServGlobal’s 35% stake – and Mastercard’s 26% of
the global credit-card market suggested a far greater share was possible.
Now, after recent announcements, we realise: firstly, that the applicable
market size was woefully underestimated; secondly, that its share will not be
tiny but significant; and thirdly, that success for HomeSend is becoming a
certainty. On the contracts already signed, HomeSend will generate revenue
and profits of hundreds of millions of dollars; it is now simply a matter of
when its transaction corridors go live and the commission streams ramp up.
We understand that that, too, will be faster than thought.

[wigwammer] 07/12/2017 12:10

The Homesend USP is that it enables banks everywhere to lower the cost of overseas transaction and transfer, thus making them more than competitive with the new transaction technologies.Currently >90% of money transfer occurs through bank channels - consumers like transferring with the institutions they know.Homesend means they can now do that at a competitive price. As a consumer, I am much happier allowing my bank to deal with money transfer with MasterCard than through a Chinese operation I do not know, especially when the cost is the same.I suspect it is many of the new transfer fintechs that are going to find life tough going forward, and the banks will keep a very large part of that 90%.

[astralvision] 07/12/2017 11:44

ESG have already in effect sold their 'USP' to Mastercard.
HomeSend is where the excitement is, and that is owned by Mastercard, something like 55%, with ESG having 35% and another party 10%.
Do not underestimate Mastercard. And for ESG to have 35% of something that has Mastercard's global push is really something quite special.
I will post some details from the brokers note in a minute to help.

[kinbasket] 07/12/2017 11:39

I'm not convinced having a partner like Mastercard means as much as we in the west might think. Wechat payment volumes and values are at least as large as Mastercard (it's a guess because of its +30% CAGR) and they are all on what is essentially the new digital platform.

i.e. they are already doing what a lot of the western payments companies are only just setting out to do.

Rolling those technologies into whatever markets they want doesn't seem like too much of a stretch of the imagination to me.

ESG is interesting if they have a particular USP that a larger company will buy. Either to use it for their own or to eliminate as potential competition. I've read a couple of the presentations but it's not obvious to me what that is. If someone can point me in the right direction i'm ready to change my mind. It's a relatively cheap business after all.

[astralvision] 07/12/2017 10:29

kinbasket

ESG has got MasterCard as the main partner, that makes a masive difference
Also HomeSend is moving into a different market, beyond the person to person type transactions, it's moving onto the much much larget financial institutions shifting money, see recent RNS re Standard Chartered bank.
Will try and post a bit more to explain the above better later. But I just don't see Ten Cent and Ali Pay as a much of a competitor in the market they are in. Mind you, the market is so massive there is probably enough for everyone anyway.

[kinbasket] 07/12/2017 09:44

I'm having a bit of a look at ESG this morning. Whilst it's obvious that digitised payments of all kinds are the future my one concern with all new electronic payment services is Tencent Wechat. I've spent some time in China and it's hard for anyone who's not been recently to comprehend how massive they are. Payments through Wechat are 10X Applepay, 1m transactions a minute, 800m users etc etc. Credit cards and cash are effectively obsolete. They are the giant in this sector.

And then there's Alipay. Same again.

With the overseas expansion of theses giants already underway, how does a company like ESG or any other mobile/electronic/digital payments company (including Apple) fit in ?

Aren't they all just waiting to get steamrollered ?

Is there some specific USP ESG has that may be of value to a buyer? Something that maybe a partner might buy to corner a particular part of this market ?

[astralvision] 06/12/2017 17:29

Looks like a 400K buy went through this morning. It's looking good value here, wouldn't be surprised if it pops up north soon.

[hpcg] 26/11/2017 05:41

Yes, good to see that rather than a list headed by Hargreaves Landsdown, Barclays, TDW etc.

[someuwin] 23/11/2017 10:35

Lombard Odier Investment Managers (25.02%)

Hargreave Hale Investment Managers (15.23%)

Legal & General Investment Management (13.74%)

Individuals (7.11%)

Blue Lake Partners (5.11%)

Walker Crips Stockbrokers (4.39%)

Colonial First State Global Asset Management (3.91%)

Acorn Capital Partners (3.86%)