Orion rises 15% on prospects as next 'fintech giant'

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KUALA LUMPUR (Jan 11): Shares in Orion IXL Bhd garnered investors' attention today, rising 14.8% or two sen to its 10-month high of 15.5 sen, after an analyst remarked that the ACE Market-listed company could be a "fintech giant in the making".

At the time of writing, the stock was traded at 15 sen, with a total of 44.76 million shares done, giving Orion an RM89.84 million market capitalisation. In comparison, the counter's 200-day average trading volume stood at 8.29 million shares.

In a note to client today, CIMB Research pointed out that the non-rated Orion has the first-mover advantage in the country as a pioneer in providing fintech solutions for non-bank financial institutions and related industries.

This follows the company's recent launch of a fintech end-to-end online loan application and approval system for MyAngkasa Holdings, which earns a fee of 1.275% on co-op loans approved. The system — dubbed MyAzZahra — could deliver a pretax margin of 35% to 40%.

"Orion aims for MyAzZahra to be linked with most, if not all, of the 12 largest credit co-ops in the country. According to the Co-operative Societies Commission of Malaysia (SKM), the country's credit and non-credit co-ops lent RM6.7 billion in 2017, comprising mainly personal loans to government staff.

"Orion said that it aims for MyAzZahra to deliver pretax margin of 35-40%. If the MyAzZahra fintech system handles RM1 billion to RM5 billion loan approvals for the co-ops over the next 12 months, Orion estimates this segment could record pretax profit of RM9.1 million to RM29.5 million in 2019," read the note.