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HMY 20251103 - Return to growth for NZ portfolio.pdf

Read Trim Capital Group's research report below on Harmoney Corp (HMY.ASX): Return to growth for NZ portfolio.

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Source: Return to growth for NZ portfolio

NZ loan book rebounded after 7 quarters of contraction and contributed to overall loan growth. Secured car loan was recently launched in both markets, which is expected to further boost originations. Our updated valuation is at $2.60.

1Q26 results as expected: Loans grew 8% year-over-year to $833m driven by Australian loan book (+18%) while New Zealand loan book finally saw some growth (+1%) after 7 quarters of contraction. All metrics (NIM, credit losses, cost-to-income, risk-adjusted income) continued to be strong vs prior quarters and the reaffirmed FY26 guidance were within our forecasts. As economies of Australia and New Zealand are on a rebound, it is good to see management now focused on driving growth while keeping costs and margins steady. This will translate to significant profit growth as the potential of their platform is realised.

Business as usual: In the Q&A section, Harmoney management reiterated their focus on direct-to-consumer and being a platform business (as opposed to doing business through brokers). Despite the changing macro over the past quarter, management said there were no changes in the competitive landscape, average loan values, returning customers, and loan run-off rates in Harmoney’s business.

Valuation suggests 177% upside: Our primary valuation method is a general residual income model and produces a valuation of $2.60, slightly up from the prior $2.53 due to the discounting factor. We made no changes to our underlying forecasts as 1Q26 performance and FY26 guidance were within expectations.

TRIM CAPITAL: Return to growth for NZ portfolio - 3 November 2025