Company Overview 

MoneyMax is one of Singapore?s largest pawnbroking 

chains with 29 outlets located island-wide, operating under 

the brands of ?MoneyMax? and ?Cash Online?. MoneyMax 

also provides retail and trading business of pre-owned gold, 

jewellery and watches. 

 

Two sources of revenue 

 Earns from interest income from providing short-term 

collateralized loans to customers. 

 Profit from sales of pre-owned gold, jewellery and/or 

watches. 

 

Investment Merits 

 Expect increasing demand for pawnshops: 

- Higher cash needs from tighter loan regulations 

- Reducing social stigma on stronger branding and 

better quality of service 

- Cheaper and quicker source of borrowing 

- Wide reach with convenient stops in the heartlands 

- Rising costs likely to boost business 

 Low-risk business model 

 Stronger holding, of interest in jewellery & watches 

 Experienced management team 

 

Peer Comparison ? Maxi-Cash and ValueMax 

 All three pawnshop chains are expected to experience 

increase in their pawnbroking profits 

 MoneyMax may have a higher growth potential from 

existing outlets as compared to ValueMax. 

 MoneyMax?s current P/E valuations lower, more 

attractive than Maxi-cash 

 MoneyMax does not currently give dividends 

 All three pawnshop chains may continue to grow partly 

through the acquisition of older pawnshops 

 

Key Risks 

 Current gold price volatility increases the risk and 

impacts profit margin 

 Increase in interest rates lowers profitability of 

pawnbroking business 

 Licences may fail to be renewed or obtained 

 Regulatory risks 

 

Investment Actions 

Based on our DCF valuations, assuming WACC of 8.0%, 

and terminal growth of 1.0%, we derive a target price of 

S$0.48. This gives an implied FY13E P/E multiple of 21.8X, 

and P/B multiple of 2.7X. While both multiples are high, we 

note the growth potential for MoneyMax and the 

pawnbroking industry. Based on the investment merits 

highlighted above, and current share price, we initiate 

coverage of MoneyMax with a BUY recommendation