Company Review - Maxi-Cash Fin.


In this post, I will be covering Maxi-Cash Financial Services Corporation Ltd (Maxi-Cash for short), listed on SGX under the ticker: 5UF. It has a relatively high dividend yield (roughly 8% now) compared to the usual REITs that I cover, and so with higher skepticism I take deeper look in this post to determine if it could be a viable addition to my portfolio.

Financial Performance

Maxi-Cash has managed to consistently grow their revenue stream in the past few years. While profits saw a dip between 2017 and 2018, it seems to be back on track in the last reported FY. However, EPS has been less consistent, as the number of shares outstanding has increases over the years, due to scripts and two rounds of rights issue in 2017 and 2018. 

While Maxi-Cash does not have a fixed dividend policy, it is nice to see that they have not inflated and distributed beyond their earnings, as seen from the table above. This provides an assurance that the management is committed to sustainable dividend payout.

Lastly, cash position steadily increased from 2015 to 2018, but dropped in 2019 due to some property purchases.

Business Segments

Maxi-Cash's business can be split into three main groups, with a brief description below:


Maxi-Cash provides micro-loans to individuals, who leave with them items of similar value as collateral. The loan quantum disbursed is usually less than the value of the collateral item, which acts as a safety margin for Maxi-Cash. Individuals will pay interests of up to 1.5% per month, for up to a fixed number of months. In the event that the loan isn't repaid by the end of the period, the item will be seized by Maxi-Cash after a 1 month notice period. 

Sale of jewellery and branded merchandise

Maxi-Cash also sells and trades pre-loved luxury goods such as jewellery, watches, branded bags, along with brand new jewellery.

Money Lending

The last major business segment extends loans to borrowers overseas. These loans are typically secured by land or property related assets. As these involve overseas corporations and currencies, Maxi-Cash has a hedging policy to mitigate forex fluctuations and exposure. This segment started in 2017, and was the primary reason behind the two rights issue rounds that Maxi-Cash went through.

Segment Performance

In terms of the top line, Retail/Trading and Pawnbroking continued to maintain steady growth of 9% and 5% year on year, while the Secured Lending business shrank by 11%. 

Bottom line wise, all three segments showed healthy improvement in profits year on year, with Secured Lending turning back into the green. While results have been good, profits for Retail/Trading and Secured Lending have been shaky across the years, so investors should closely monitor their FY20 results to see if the recovery and growth is sustainable.

Geographic Breakdown

Maxi-Cash started expanding regionally in the past few years, and in FY2019, it stepped into the Ireland and Malaysia market. While detailed figures aren't available, we can slowly see the venture into Australia slowly stabilizing in terms of revenue. It will be interesting to see how the three overseas markets play out in the next few years.


In collating the information, I decided to only show the interest rates for bank borrowings, as the term loans are insignificant in value in comparison (for those interested, the rates are quite close to the ones shown above). 

While the effective interest rate has steadily increased since 2016, up from 2.04% to 3.37% in 2019, the silver lining is that total borrowings has stabilized in the past three years. 

As a proxy to financial health, we can also look at the current ratio, which is the ratio of current assets over current liabilities. Current assets typically include cash or assets that will be turned into cash in a year or less, and current liabilities include liabilities that will be paid in a year or less.

A current ratio below 1.0 could raise a red flag, as it means that the company will be unable to cover short-term liabilities with the existing liquid assets. On the other hand, a high current ratio could also reflect an inefficient usage of cash. By this metric, Maxi-Cash's ratio of 1.3 to 1.6 strikes a decent balance in my opinion.

Recent Results (1H 2020)

Maxi-Cash decided to forego quarterly reporting. Hence, we can only assess it's recent performance with the 1H results, while waiting for full year to come out in the next month or so. I pulled out a couple of things from the report, but please check out the full report for more details if you're interested!

There isn't much to say here, top and bottom line both improved, along with EPS. Their cash position also increased by a sizable amount. I think this bodes well for FY20 results, showing how their business is largely unaffected by the pandemic.

As a side note, over the last 6 months net asset grew 4.6% to $145.3 million, while net current asset grew 7.3% to $148.9 million, both good things in general.

Parting Thoughts

While Maxi-Cash seems to be a relatively stable (at least in my opinion) business to invest in, it will take some time to see how their overseas ventures pan out. I think that the overseas expansion will be quite crucial, as the local market seems to be experiencing slower growth in recent years, possibly due to market saturation.

Investors should also be aware of the low free float for this counter (16.4%), which could result in poor liquidity. There has also been several IPTs (Interested Party Transactions) in recent times that investors should take note of. While justifications have been made from Maxi-Cash's end for the transactions, investors should form their own opinion on whether the actions have merit. Take a look at the links here for more information. 

Property acquisition:

Bond purchase:

I hope that the this article gave you some valuable insights into this company. As someone who just started looking into this counter, I've learnt a great deal through my research, and I hope that (potential) investors can use and benefit from this information too!



Author's note:

At the point of writing, I am not a shareholder of Maxi-Cash. I have put in my best effort to ensure that the facts are accurate, but I do not guarantee it. Opinions are my own and do not constitute any recommendations. Data sourced from 2015 - 2019 Annual Reports, Investor Presentations, along with some numbers from