Yoma Strategic’s proposed acquisition of a 34 percent stake in Myanmar fintech Wave Money has huge potential, DBS said in a note on Wednesday.
DBS said Wave Money’s business is “hugely scalable” in Myanmar amid a lack of formal banking infrastructure. Wave Money offers mobile payments and services for remittance and an e-wallet, and it is aiming to provide financial services without heavy infrastructure investment, DBS noted.
“We believe the acquisition allows Yoma to rise on the accelerating growth demonstrated by Wave Money in the past few months as the business is just coming out of the incubation phase,” it said.
“The ability for Wave Money to scale up is supported by the lack of formal banking infrastructure (banks are capital constrained and operate under an under-developed retail financial regulatory framework) in Myanmar and aided by the high mobile penetration rate in the country” of greater than 100 percent, DBS said.
DBS rates Yoma at Buy with a target price of S$0.75.
The stock ended Wednesday up 1.19 percent at S$0.425.