Headquartered in Montreal, Quebec, Peak is the parent company of a group of financial technology subsidiaries operating in China’s commercial lending industry.
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I’m Cassandra Bolinski for Investmentpitch Media
Today’s latest Equity Research report comes from eResearch Corporation.
Analyst Chris Thompson gives Peak Positioning Technologies a one-year target price of $0.20, a premium of 400% to the $0.04 price on March 4th, 2020, the day the report was issued.
The full report is available on www.eResearch.com.
Headquartered in Montreal, Quebec, Peak is the parent company of a group of financial technology subsidiaries operating in China’s commercial lending industry.
In March 2017, Peak signed a 10-year agreement with Cubeler Inc. for the exclusive rights to the Cubeler commercial lending platform, which Peak has branded the Lending Hub, for use in China, subject to a 5% royalty fee.
The licensing agreement allows Peak to use, modify, sublicense, and market the platform, as well as to develop and distribute new product and services derived from the platform.
In China, the commercial credit/lending industry includes three major participants: financial institutional lenders, business borrowers and credit/loan brokers.
The Lending Hub platform offers credit-matching services between these parties, automating various aspects of the transactions, including financial due diligence and qualification for borrowers, making it faster and easier for a Chinese small or medium enterprise to obtain credit, while reducing the risk for corporate lenders.
At its core, the Lending Hub is both a FinTech platform and an ecosystem comprised of lenders, borrowers and loan brokers where lenders find borrowers, borrowers find lenders and loan brokers submit leads and earn commissions.
FinTech, which describes the application of technology to automate, improve, and/or customize the delivery and use of financial services, is disrupting traditional loan origination by providing mobile technology solutions aimed at a digital generation demanding easy-to-use products with low fees.
These online solutions are taking market share from traditional financial institutions that have been slower to implement lower fees solutions.
Emerging markets are leading the way with a FinTech adoption rate of 87% in China, far ahead of Canada which sits at 50%.
Lending Hub uses a proprietary analytics engine and artificial intelligence to analyze data and qualify prospective borrowers for loans and match them with the appropriate lenders.
The data analyzed on Lending Hub comes from the platform’s participants and from various private and public data sources including some popular social media platforms, as evidenced by the company’s announcement of a WeChat financial data validation feature in the summer of 2019.
WeChat is a social media, messaging and payments app that has over 1 billion active monthly users in China.
In addition to Peak’s 6 operating subsidiaries, as of January 2020, the Lending Hub ecosystem included, 10 banks, 20 lending companies, 5 loan insurance companies, and 8 strategic partners.
The latest strategic partner, Jinxiaoer, which translates to “Financial Waiter” is a loan brokerage platform with over 40,000 registered sales reps and brand recognition in over 30 cities, including large metropolitan centres such as Shanghai and Shenzhen is expected to fuel loan leads and transactions for the Lending Hub.
Analyst Chris Thompson stated: “Regulators are also now dealing with increasing concerns over the health of the Chinese banking industry as bad debt levels have surged to the highest in at least 15 years, prompting bank seizures and bailouts. This issue of bad debt has put pressure on lenders to be more effective in their lending practices and created an
opportunity for lenders to implement Peak’s technology. Peak’s service offering automates the process by which
lenders find and, more importantly, qualify borrowers to help reduce the default rates, and allows banks and lenders
to increase the number of loans to meet the imposed minimum SME loan targets with helping to reduce bad debt.”
Global Information Technology spending remains robust as companies look to find ways of increasing productivity while reducing costs.
According to Gartner’s latest survey of global IT spending published in July 2019, Global IT spending should reach US$3.74 trillion in 2019, and increase US$140 billion to US$3.88 trillion this year.
According to PwC’s Global FinTech Survey 2019, 76% of financial institutions expect to create a new strategic alliance or joint venture and the largest area of collaboration is with a FinTech company
Peak management believes it has a competitive advantage in the Chinese market with its dedicated team of experienced business executives with strong ties to China, who understand technology, the Chinese culture and marketplace, and what it takes to be successful in China.
Peak has reported 6 consecutive quarters of revenue growth since Q1/2018 when Peak shifted the business to focus on Financial Services Revenue.
With its shares trading at $0.04, a significant discount to eResearch’s $0.20 target price, Peak provides an investment vehicle for North American investors looking to participate in the digitization of China’s financial services industry.
For more information please visit the company’s website www.PeakPositioning.com, or contact Johnson Joseph, President and CEO at 514-340-7775 ext. 501 or by email at investors@PeakPositioning.com.
Investor Relations is handled by Cathy Hume, CEO of CHF Capital Markets, who can be reached at 416-868-1079 ext. 231 or by email at cathy@chfir.com.
Chris Thompson, Director of Equity Research, commented on eResearch’s products: “eResearch Corporation, founded in 2000, is a respected source for institutional-quality, equity research focused primarily on small- and mid-cap companies. Our focus is to identify companies that have near-term catalysts, sound management, and significant potential for share price appreciation. We complement our corporate research coverage with a diversified selection of informative, insightful, and thought-provoking research publications from a wide variety of investment professionals. We provide our professional investment research and analysis directly to our extensive subscriber network of discerning investors, and electronically through our website, www.eresearch.com.”
I’m Cassandra Bolinski for Investmentpitch Media
