ASX Small Cap Favourites: ChimpChange Limited
We’ve been keeping a close eye on Chimpchange over the past few months. Results haven’t been impressive and the stock price has come back after a strong rally following the IPO. There are many doubts in the market over the growth of this business. There’s no doubt it’s playing in the right pond – it’s a matter of how big a fish it can become among the giants who swim in the US banking space. Time will tell.
We were pleased to see some good news last week in a trading update to the market. According to the company “…during August, ChimpChange acquired 5,700 customers, an increase of 42% on July account openings. This increase in customer acquisition means ChimpChange has now created more than 100,000 customer accounts on its digital banking platform as at the date of this announcement”
The business also said “…the majority of new ChimpChange customers continue to come from the millennial demographic (age 18 – 35), representing approximately 70% of the customers acquired during the month. The Company continues to acquire more customers from California than from any other state in the USA…”
Chimpchange continues to add customers through social channels, with Facebook the largest platform followed by Instagram and Google. The marketing team is headed by Malek Khalusi who joined the business from DollarShaveClub. So the stage is set for either some earnings growth in the near term or a large traditional banking incumbent casting an eye over the stock for future growth potential. If none of these materialise, Chimpchange will need to continue growing its customer and user base by a large amount to offset lingering doubts.
Interesting times ahead.
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Chief Market Analyst
Peter Esho is a member of Invast’s Investment Committee and Chief Market Analyst at Invast Financial Services in Australia. The Invast’s Investment Committee constructs professionally constructed global thematic portfolios of Direct Market Access (DMA) CFDs over highly liquid global shares and ETFs through its new PortfolioInvestor platform. Since 1960, the Invast Group has grown to become one of the largest and most successful global brokerage firms, offering state-of-the-art trading technology and unparalleled service catering to all levels of traders.
Invast Financial Services Pty Ltd (ABN 48 162 400 035) is regulated by the Australian Securities and Investments Commission and holds an AFS Licence 438283 which authorises it to carry on a financial services business in Australia.