Venteny Fortuna International (VTNY IJ) - Delivering the growth momentum through attractive propositions in MSMEs segments

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Venteny Fortuna International (VTNY IJ)

Delivering the growth momentum through attractive propositions in MSMEs segments

VTNY targets ~twofold FY24F revenues growth, offering fintech and employee solutions in the untapped SME and B2B2E segments.
Its growth in fintech and digital app revenue streams will be supported by new funding for loan disbursements and frontloading.
VTNY currently trades at a premium 2023 PBV of 2.9x and 2024 EV/revenues of 5.8x, justified as it is in an early growth stage.

Holistic approach catering to the Micro and SME segments.

Venteny is engaged with the lucrative B2B segment with 440 MSME clients via offline channels offering vital liquidity loans (as the clients are unable to borrow through conventional banks). It also caters to employees working in those SMEs (~239,000 employees count in 3Q23) via its digital app. This setup has allowed Venteny to deliver solid revenue of Rp100bn in 9M23 (+125%yoy, with 59/41% fintech and superapp revenue contributions).

Building momentum in the employee digital app.

Inline with its IPO commitments, the employee “Venteny Superapp” has shown signs of robust traction, supported by growth in app downloads and more ecommerce transactions for digital products (1.3mn in 3Q23, +430%qoq, / 1.6mn in 9M23, +425%yoy). Venteny’s has taken initiatives to scale up its employee app by acquiring stake in DPI in Jan24 to utilize its e-wallet license. Furthermore, some 16% of its IPO funds went on IT spending.

Penetrating micro and SMEs with attractive loan propositions.

Venteny disbursed ~Rp1.4tr of loans in FY23E to SMEs (3Q23 outstanding: Rp339bn) channeling the funds through its P2P partners. The funding liquidity is sourced at a manageable cost (the effective cost of the fund on the total borrowings of Rp449bn was 9.8% as of 9M23, 68% from yen loans) owed to Venteny’s CEO liaisons with Japanese institutions, realizing sizeable interest margins (effective interest income at 24.3% in 9M23). Moreover, Venteny runs loan approvals (<5 days) relatively fast, with Venteny channeling loans through P2P with additional assessments and monitoring layers in place. Also, this lending route is attractive to SMEs as it requires no collateral for loan issuance.

Venteny is in the early stage of growth, thus deserving high multiples

Venteny has provided guidance for a twofold increase in FY24F revenue with equal contributions from fintech and its app. The growth will be supported by new funds with Venteny currently looking to raise total disbursements to Rp2tr in FY24F. The services provided in Venteny’s app are expected to be expanded. Venteny currently trades at 2023E PBV of 2.9x vs. 2.7x for its peers, while on a 2024 EV/revenue basis it trades at 5.8x vs. 2.3x for its peers. The premium valuation appears justified as Venteny’s is on track in delivering its high growth.

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