atonrâ mobile payments certificate
ATONRÂ MOBILE PAYMENTS CERTIFICATE The AtonRâ Mobile Payments is a long-only, monthly rebalanced, EUR-based activelymanaged certificate. It aims to benefit from the expected rise of contactless payments around the world as consumers move to their smartphones and tablets for everyday purchases at the expense of cash.
Main Features Asset Class Inception Date Currency Type of Return Ticker (EUR Inst. Class) ISIN (inst. Class EUR) ISIN (Retail Class EUR) ISIN (Retail $USD Class) Issuer Issue Price Last Price Sharpe Ratio Correlation Beta Benchmark
While the mobile payment infrastructure is now in place (NFC-enabled phones and POS terminals, various payment platforms such Apple Pay), we are about to enter the second phase of growth for the theme, which is mass adoption of payment solutions by consumers. Indeed, the increasing marketing around payment platforms and the deployment of value-added services (such as rewards, loyalty and couponing) should give a major boost to consumer engagement as soon as 2017, and mainly benefit companies with strong and predictable cash-flows that handle electronic transactions.
Equity 22-Apr-14 Euro Total Return IND1AMPE CH0239656462 CH0239656603 CH0239657494 Société Générale 100.0 162.8 1.22 0.73 1.04 MSCI World Net Return (EUR)
MONTHLY RETURNS (%) JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2017 4.3% 7.1% 2.9% 1.6% 2016 -5.6% -1.5% 0.7% 0.7% 7.5% -3.9% 2.7% -0.5% 1.7% -0.3% -0.3% -0.6% 2015 6.1% 4.9% 4.8% 1.0% 6.5% -8.9% 2.9% -4.1% -2.9% 9.4% 8.5% -3.7% 2014 0.2% 5.6% 2.1% -6.1% 4.4% 0.0% -1.1% 8.3% -1.8%
170
ANNUAL 16.8% 0.0% 25.0% 11.2%
160 150 140 130 120
Dec-16
Mar-17
Sep-16
90
Jun-16
16-Oct-14
Dec-15
94.6
Mar-16
All Time Low
100
Sep-15
28-Apr-17
Jun-15
162.8
Dec-14
All Time High
110
Mar-15
Date
Sep-14
Price
Jun-14
HIGHS/LOWS
April 2017 highlights The AtonRâ Mobile Payments certificate gained 1.6% in April, outperforming the MSCI World Net Return by 2%. Year-to-date, it outperforms by 12.3% and, launch-to-date (April 22, 2014 launch), it outperforms by 12.6%. An interesting survey released by Tencent shows that the penetration rate of mobile payments in China (including WeChat Pay, Apple Pay…) is impressive: 94.1% in first-tier cities, with roughly 60% of people in these cities preferring digital payments over cash and credit/debit cards. Considering that China is a couple of years ahead of western countries when it comes to mobile usage (mobile gaming for instance took off in Asia), this is a highly encouraging sign for the adoption of mobile payments in the U.S. and Europe which, admittedly, remains low (a recent survey published in the Wall Street Journal found that 60% of iPhone users are not familiar with mobile payments). Hence, quite naturally, WhatsApp’s initiative in India (the company is mulling a person-to-person payments service in the next six months) is likely to follow the same pattern: launching first in emerging markets where mobile usage is high, before expanding the service to the U.S. and Europe. In all, we stick to our view that this is not a question of if but when mobile payments will become ubiquitous, with 2017-18 likely to mark an inflection point thanks to numerous catalysts (increased marketing around payment platforms, new features such as coupons and loyalty programs, in-car payment solutions, governments’ incentives…). Against this backdrop, we see the current low adoption numbers in the western world as a major investment opportunity, not as a concern. Mass adoption of mobile payment solutions is just ahead of us and will arguably fuel double digit revenue growth across the payment processing industry over coming years, well above expectations. Combined with the scalability of the business model, this will probably give rise to a 20-30% earnings growth outlook for payment processors, suggesting that current valuation multiples (below 20x) are way too low. In terms of corporate newsflow, PayPal stood out last month. On top of a solid set of quarterly figures, the company announced a surprising partnership with Android Pay through which consumers will have the opportunity to use PayPal over the Android Pay / Discover acceptance network. While PayPal has its own in-store payment solutions, this partnership will allow it to reach a larger number of merchants and will strengthen its rather weak position in the physical retail market. At the same time, Android Pay gets an additional funding source for its users.
AtonRâ Partners SA 12 rue Pierre Fatio - 1204 Geneva - Switzerland - +41 22 310 15 01 - http://www.atonra.ch
ATONRÂ MOBILE PAYMENTS CERTIFICATE
Top 3 Performers
Worst 3 Performers
Name
Name
QIWI PLC-SPONSORED ADR TENCENT HOLDINGS LTD-UNS ADR PAYPAL HOLDINGS INC
GMO PAYMENT GATEWAY INC VANTIV INC - CL A BLACKHAWK NETWORK HOLDINGS
Top 3 Holdings Name SQUARE INC - A GLOBAL PAYMENTS INC VANTIV INC
Geographical Breakdown
5.1% 2.6% 23.0% 54.3%
Currency exposure
UK
5.1% 4.5%
Japan Emerging markets Europe
15.0% US
68.7%
4.1%
Asset Allocation GBP
2.6%
BRL
15.0%
KRW
Equities
JPY
Cash
EUR
100%
USD
Important Information All net estimated returns are based on unaudited, internally prepared assessments and have not been independently verified. The net estimated returns are subject to adjustments as a result of changes or delays in AtonRâ's calculations of the profit and loss of the portfolio. Any such adjustments could have a material impact on the estimated net returns of the AtonRâ Basket. Net returns are reported after deduction of AtonRâ's management and/or performance fees. Past performance is not indicative or a guarantee of future results. Investment losses may occur, and investors could lose some or all of their investment. Although AtonRâ Partners SA believes that the information provided in this document is based on reliable sources, it cannot assume responsibility for the quality, correctness, timeliness or completeness of the information contained in this report. The information contained in these publications is sent to you by way of information and cannot be divulged to a third party without the prior consent of AtonRâ Partners. It cannot be considered under any circumstances as an offer to sell, or a solicitation of any offer to buy financial instruments. Any indices cited herein are provided only as examples of general market performance and no index is directly comparable to the past or future performance of the Certificate. It should not be assumed that the Certificate will invest in any specific securities that comprise any index, nor should it be understood to mean that there is a correlation between the Certificate’s returns and any index returns. Any material provided to you is intended only for discussion purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security and should not be relied upon by you in evaluating the merits of investing in any securities.
AtonRâ Partners SA 12 rue Pierre Fatio - 1204 Geneva - Switzerland - +41 22 310 15 01 - http://www.atonra.ch
Main Features Asset Class Inception Date Currency Type of Return Ticker (EUR Inst. Class) ISIN (inst. Class EUR) ISIN (Retail Class EUR) ISIN (Retail $USD Class) Issuer Issue Price Last Price Sharpe Ratio Correlation Beta Benchmark
While the mobile payment infrastructure is now in place (NFC-enabled phones and POS terminals, various payment platforms such Apple Pay), we are about to enter the second phase of growth for the theme, which is mass adoption of payment solutions by consumers. Indeed, the increasing marketing around payment platforms and the deployment of value-added services (such as rewards, loyalty and couponing) should give a major boost to consumer engagement as soon as 2017, and mainly benefit companies with strong and predictable cash-flows that handle electronic transactions.
Equity 22-Apr-14 Euro Total Return IND1AMPE CH0239656462 CH0239656603 CH0239657494 Société Générale 100.0 162.8 1.22 0.73 1.04 MSCI World Net Return (EUR)
MONTHLY RETURNS (%) JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2017 4.3% 7.1% 2.9% 1.6% 2016 -5.6% -1.5% 0.7% 0.7% 7.5% -3.9% 2.7% -0.5% 1.7% -0.3% -0.3% -0.6% 2015 6.1% 4.9% 4.8% 1.0% 6.5% -8.9% 2.9% -4.1% -2.9% 9.4% 8.5% -3.7% 2014 0.2% 5.6% 2.1% -6.1% 4.4% 0.0% -1.1% 8.3% -1.8%
170
ANNUAL 16.8% 0.0% 25.0% 11.2%
160 150 140 130 120
Dec-16
Mar-17
Sep-16
90
Jun-16
16-Oct-14
Dec-15
94.6
Mar-16
All Time Low
100
Sep-15
28-Apr-17
Jun-15
162.8
Dec-14
All Time High
110
Mar-15
Date
Sep-14
Price
Jun-14
HIGHS/LOWS
April 2017 highlights The AtonRâ Mobile Payments certificate gained 1.6% in April, outperforming the MSCI World Net Return by 2%. Year-to-date, it outperforms by 12.3% and, launch-to-date (April 22, 2014 launch), it outperforms by 12.6%. An interesting survey released by Tencent shows that the penetration rate of mobile payments in China (including WeChat Pay, Apple Pay…) is impressive: 94.1% in first-tier cities, with roughly 60% of people in these cities preferring digital payments over cash and credit/debit cards. Considering that China is a couple of years ahead of western countries when it comes to mobile usage (mobile gaming for instance took off in Asia), this is a highly encouraging sign for the adoption of mobile payments in the U.S. and Europe which, admittedly, remains low (a recent survey published in the Wall Street Journal found that 60% of iPhone users are not familiar with mobile payments). Hence, quite naturally, WhatsApp’s initiative in India (the company is mulling a person-to-person payments service in the next six months) is likely to follow the same pattern: launching first in emerging markets where mobile usage is high, before expanding the service to the U.S. and Europe. In all, we stick to our view that this is not a question of if but when mobile payments will become ubiquitous, with 2017-18 likely to mark an inflection point thanks to numerous catalysts (increased marketing around payment platforms, new features such as coupons and loyalty programs, in-car payment solutions, governments’ incentives…). Against this backdrop, we see the current low adoption numbers in the western world as a major investment opportunity, not as a concern. Mass adoption of mobile payment solutions is just ahead of us and will arguably fuel double digit revenue growth across the payment processing industry over coming years, well above expectations. Combined with the scalability of the business model, this will probably give rise to a 20-30% earnings growth outlook for payment processors, suggesting that current valuation multiples (below 20x) are way too low. In terms of corporate newsflow, PayPal stood out last month. On top of a solid set of quarterly figures, the company announced a surprising partnership with Android Pay through which consumers will have the opportunity to use PayPal over the Android Pay / Discover acceptance network. While PayPal has its own in-store payment solutions, this partnership will allow it to reach a larger number of merchants and will strengthen its rather weak position in the physical retail market. At the same time, Android Pay gets an additional funding source for its users.
AtonRâ Partners SA 12 rue Pierre Fatio - 1204 Geneva - Switzerland - +41 22 310 15 01 - http://www.atonra.ch
ATONRÂ MOBILE PAYMENTS CERTIFICATE
Top 3 Performers
Worst 3 Performers
Name
Name
QIWI PLC-SPONSORED ADR TENCENT HOLDINGS LTD-UNS ADR PAYPAL HOLDINGS INC
GMO PAYMENT GATEWAY INC VANTIV INC - CL A BLACKHAWK NETWORK HOLDINGS
Top 3 Holdings Name SQUARE INC - A GLOBAL PAYMENTS INC VANTIV INC
Geographical Breakdown
5.1% 2.6% 23.0% 54.3%
Currency exposure
UK
5.1% 4.5%
Japan Emerging markets Europe
15.0% US
68.7%
4.1%
Asset Allocation GBP
2.6%
BRL
15.0%
KRW
Equities
JPY
Cash
EUR
100%
USD
Important Information All net estimated returns are based on unaudited, internally prepared assessments and have not been independently verified. The net estimated returns are subject to adjustments as a result of changes or delays in AtonRâ's calculations of the profit and loss of the portfolio. Any such adjustments could have a material impact on the estimated net returns of the AtonRâ Basket. Net returns are reported after deduction of AtonRâ's management and/or performance fees. Past performance is not indicative or a guarantee of future results. Investment losses may occur, and investors could lose some or all of their investment. Although AtonRâ Partners SA believes that the information provided in this document is based on reliable sources, it cannot assume responsibility for the quality, correctness, timeliness or completeness of the information contained in this report. The information contained in these publications is sent to you by way of information and cannot be divulged to a third party without the prior consent of AtonRâ Partners. It cannot be considered under any circumstances as an offer to sell, or a solicitation of any offer to buy financial instruments. Any indices cited herein are provided only as examples of general market performance and no index is directly comparable to the past or future performance of the Certificate. It should not be assumed that the Certificate will invest in any specific securities that comprise any index, nor should it be understood to mean that there is a correlation between the Certificate’s returns and any index returns. Any material provided to you is intended only for discussion purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any security and should not be relied upon by you in evaluating the merits of investing in any securities.
AtonRâ Partners SA 12 rue Pierre Fatio - 1204 Geneva - Switzerland - +41 22 310 15 01 - http://www.atonra.ch
