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  1. #1

    Post TFL - TasFoods Limited

    The following explains todays massive buying interest:

    Investment aces back Oncard
    By Alan Kohler

    PORTFOLIO POINT: Oncard’s cash card numbers are exploding in China. It’s a hot business investors are yet to discover.

    It’s always a good idea to invest in the slipstream of rich, successful investors where possible, so how would you like to come in behind Peter Scanlon, Dick Pratt and James Packer — in a company they think is good thing?

    We don’t give a lot of share tips at Eureka Report and we’re certainly not into trading. But we are always looking for ways to help you grow your wealth over the long term, and there is no doubt that the absolute best way to do that is to invest in tomorrow’s success stories.

    These investment opportunities are rare and hard to find, but I think Oncard International is one of them.

    So do Peter Scanlon (previously the biggest individual shareholder in Patrick Corporation), Dick Pratt and James Packer; in fact a joint venture between Scanlon’s Brencorp and the Hong Kong-based investment bank First Capital Partners, called FCP China Investments, is the cornerstone investor in Oncard, with 40%. The Pratt family’s Thorney Investments and the Packers’ CPH are also big investors.

    Oncard used to be called DCS Technologies, operating loyalty card schemes out of New Zealand. In 2002 the company turned to Peter Abotomey, a former banker with ANZ, to help them restructure and he promptly put the company into voluntary administration.

    Creditors were paid 100 cents in the dollar, new investors were brought in, including members of the Murdoch family (David Calvert-Jones), and the company’s business was restructured and focused on China and the Asian region.

    The business is now growing incredibly quickly, and the market has not yet discovered it. Peter Abotomey is now starting to make presentations to institutional investors and it is likely that the institutions will start re-rating the shares soon.

    The key to business at this stage, as Peter Abotomey explains in today’s interview, is the “float” Oncard controls as a result of the “cash smart card” it is selling in China. The money deposited on the cards is temporarily in the hands of Oncard and the company gets to keep the interest on it; this is now at $100 million on deposit and rising fast.

    On average, 60% of the money deposited on the cards stays with Oncard for a year. In addition Oncard gets to keep any cash that is not spent within two years, which equals about 10% of the money.

    The other revenue from the cards is a merchant fee, averaging 2% of every transaction, paid by the retailer at which it is used.

    The first card was issued in China on November 1, 2005. By the end of 2005, one million cards had been issued; by November 2006, it was three million cards, by December 2006 it was four million cards; now it is five million.

    As a result, Oncard is making $2 million revenue per day. It has no debt and the growth is phenomenal.

    The biggest customer is the Chinese Government, followed by the banks and retailers. The cards are being largely bought by employers to give to staff as a benefit, because under Chinese tax law, up to 14% of salary can be made up of benefits — tax free.

    Peter Abotomey says that the biggest supermarket in Shanghai already has 8% of its turnover accounted by Oncard’s cash cards.

    In addition to this cash card, Oncard has three other operations: loyalty cards in Australia, New Zealand, Hong Kong, China, Singapore, Malaysia and Taiwan; a dining discount card in Hong Kong and Southern China, and a card-based hotel marketing scheme. Peter Abotomey says he is also looking at a petrol saver card for New Zealand.

    It sounds a bit like a blizzard of activity, perhaps more than this small, growing company can handle. But Abotomey says the common theme is cards — anything to do with cards.

    And the fact that Peter Scanlon, Dick Pratt and James Packer are looking over his shoulder gives me some confidence that he will handle the company’s obvious success.

    I plan to buy Oncard shares for my family’s super fund, but not ahead of you. In line with Eureka Report’s policy of always putting subscribers first, I’ll be waiting at least 24 hours. The shares last sold at 21.5¢.

    The interview

    Alan Kohler: Peter can you give us an overview of your business?

    Peter Abotomey: Oncard is, as we say: if it’s on a card it’s Oncard. Oncard does loyalty, rewards and payments.

    And when did you get involved with the company?

    I became involved with the company four years ago when it was called DCS Technologies and it had some baggage, which we cleaned up. In the past 18 months we’ve been concentrating more and more on doing card-based systems and principally the one which is our growth market at the moment is in China. We issued our first card in China 15 months ago. We had one million cards a year ago and we have five million cards today.

    What are the cards and how does the business work?

    They’re prepaid charge cards and Chinese companies buy off us. We do a business to business, we’re not business to consumer. The Chinese company buys the cards off us to give their employees as a benefit. We provide a tax invoice which the tax office will accept and then the company will give those cards to their employees and the employees all do benefit. They’ll go to the supermarket. They’ll go shopping, a restaurant, the barber shop, the gym.

    So the cards and the money on them are issued as a part of salary?

    In effect.

    And it’s tax-free?

    In China, 14% of your payroll total can be used for employee benefits.

    Does it only go to employees?

    Our biggest customers are the Chinese Government, followed by the Chinese banks and then Carrefour, which is the large supermarket chain, the French one in China, the biggest foreign one there, and what they do is they give the cards to their employees and I think leading up into Chinese New Year, which is just on at the moment, I think they also gift the cards to some of their customers.

    How do you make money out of it?

    When we sell the cards we keep the money on the card invested so we get the float on the money, and when the card is used we get a merchant service fee … and when the card expires after a period of time, if there’s any services still on the card, they’re expired and we keep those as well.

    How big is the float?

    It’s very close to $A100 million.

    So you’re earning interest on $100 million?

    We are.

    How fast is that growing?

    For the previous six weeks we were taking $A2 million per day.

    How much money are you making?

    The company has never made a profit to date. We’ll be announcing our half-year results at the end of February and because we’ve been investing so heavily in a lot of our businesses, it will be a negative result. But we are well on track to have our first profit for the full year on June 30.

    What other businesses do you have?

    We also have a company called Market Smart International, which is based in Auckland, New Zealand. It processes loyalty programs for companies in New Zealand, Australia and Hong Kong. It’s unknown for people who are outside the loyalty business because our name’s not seen. We do Fly Buys processing for some companies in New Zealand. We do processing here for Dymock’s through a third party and also for the Qantas-Telstra program.

    But you’ve got some other card operations, haven’t you, apart from the Cash card in China?

    We do. We also operate … we operate in seven countries. We’re in Australia, New Zealand, Hong Kong, Singapore, Malaysia, Taiwan and China. It’s the prepaid charge cards in China. It’s the Market Smart loyalty programs in Australia and New Zealand; and in Hong Kong, Singapore, Malaysia, we market loyalty dining programs. Everything we do is on a card. It’s either loyalty, rewards or payments and what we do is we’re building a foundation for growth. With the cards in Hong Kong, Singapore, Malaysia, we sell a subscription and then the person can go to a number of restaurants and get a discount at the restaurant.

    Can you tell us a bit about how rapidly you’ve been growing as a company?

    We issued our first card in China in about November 2005 so we had one card. By December 2005 we had one million cards. By November 2006 we had three million cards. And at the end of December 2006 we had four million cards and, as I say, we have over five million cards.

    But how much more can you grow do you think?

    We put a plan together two years ago … 18 months ago … to have 10 million cards in 10 countries in five years. Now we’re well in front of that plan. The growth in China, whether it will grow at that same speed I’m not so sure, but I think it might; we’re going to make our target of 10 million cards well within the timeframe.

    And how much money will you be making on 10 million cards?

    Good, good money. Good money. I’m reluctant to give a forecast in such a rapidly growing market other than to say that we intend to be profitable this year and to remain profitable.

  2. #2

    Default Re: onc

    Nice PICK !!!!
    Interesting.........for investor not traders, I would say......
    Solid fundamentals especially their market is in China.......
    I am bullish with something in regards to China customer discretion shares......

  3. #3

    Default Re: ONC - Oncard

    Up again today on volume of 3mil.

    It's currently showing as Cum Entitlement, however, the Chairman has confirmed that this is an error as there is no current entitlement.

  4. #4

    Default Re: ONC - Oncard

    Hi Pussycat,

    do you mind showing me the link of to the report you mentioned ?

    Thank u in advance............

  5. #5

    Default Re: ONC - Oncard

    This seems to be running hard again today, up 34% on volume of 1.2m

  6. #6

    Default Re: ONC - Oncard

    seems that only couple of poeple interested in this share.......in ASF

  7. #7

    Default Re: ONC - Oncard

    From Fig Jam's Ferret post

    Around the Traps ... with THE FERRET
    08:28, Monday, February 26, 2007

    Sydney - Monday - February 26: (RWE Australian Business News) -

    That ONCARD INTERNATIONAL (ONC) is an intriguing stock.

    On Friday we wrote about how it had soared 23c to 44c before
    closing at 37c on Thursday on huge trading of 9.5 million shares (out of
    a total 137 million).

    We thought it may have been due to a Corporate Presentation by
    the company which had been posted on the ASX news site well after the
    close of trading Wednesday night ... with bullet points such as ...
    revenue increasing, cash-flow very strong, in line for profit in first
    year ... etc.

    However, on Friday we also learnt that an internet investment
    newsletter had written the stock up in the most glowing of terms.

    We don't quite know when it was written but the newsletter said
    the shares "last sold at 21.5c".

    Well the last time they last sold at 21.5c was last Tuesday and
    the stock fell to 21c on Wednesday, which would seem to indicate that
    the newsletter may not have caused the rush.

    On Friday the stock rose again to touch 44.5c and closed at 41c
    as a further 5.8 million shares changed hands.

    A near 100 per cent rise in two days on turnover representing a
    huge percentage of the general shareholding must have raised a few

    A joint venture between Peter Scanlon's Brencorp and a Hong
    Kong-based investment bank is the cornerstone investor in Oncard with 40
    per cent while Richard Pratt's family's Thorney Investments and James
    Packer's CPH are also big investors.

    Hang on, did they say Pratt and Packer?

  8. #8

    Default Re: ONC - Oncard

    Some food for thought:
    direct link: http://www.theaustralian.news.com.au...001641,00.html

    Scanlon and friends target Chinese financial services

    * Billionaires Richard Pratt and James Packer may be part of the FCPB Investments plan writes Matthew Stevens
    * June 22, 2007

    MELBOURNE financial mandarin Peter Scanlon seems to have staked out his slice of China's economic boom by collecting the building blocks for a pan-Asian financial services infrastructure provider.

    And Scanlon is not taking the plunge in the Asian payments system by himself. Billionaire and old mate Richard Pratt, and the currently otherwise-engaged James Packer also appear to be tagging along for the ride.

    Through a joint venture between his private investment company, Brencorp Group, and Chinese M&A specialists, First Capital Partners, Scanlon yesterday delivered an offer to take control and recapitalise Oriel Communications Ltd.

    Under the Scanlon plan, Oriel would be re-badged as FCPB Investments, and with the addition of between $100 to $200 million of new capital, it would become the primary platform for Asian expansion for FCP Brencorp.

    The Asian opportunity defined for the new company, which would be 75 per cent owned by FCP Brencorp, is financial services, logistics and transportation and retail and leisure.

    The Oriel we currently know is a fledgling internet payments system business, which has started making a little fist in China through an internet settlement business called BilltoBill.

    Oriel's biggest coup so far has been signing up Cathay's Dragonair, a deal that required the rollout of a payment service to 20 Chinese cities.

    But the Brencorp plan would profoundly change the China game for Oriel shareholders.

    Scanlon is a major shareholder in two other financial infrastructure providers that have bet on China as a generator of growth.

    They are Customers Ltd, Australia's second-largest owner of ATMs, and OnCard International, which is the dominant player in reward and payment card programs in the Chinese market.

    Pratt's Thorney Holdings is also a declarable shareholder in both companies, while the even bigger billionaire, James Packer, is a major owner of OnCard. Neither Packer nor Pratt has an interest in Oriel though it is understood both may take a slice of FCP Brencorp's action.

    It is very easy to see how these three Chinese foundations can be aligned into an integrated financial services strategy.

    Indeed, FCP Brencorp is already the joint venture partner for Customers' plans for an ATM rollout in China. Under that deal, FCP Brencorp is paying all the initial costs of Customers Asia to earn it a half-share of that joint venture.

    Customers has plans to create a significant Chinese base as part of am ambitious strategy to build and operate an Asian regional ATM payments system over the next five years, which will include the installation of up to 40,000 machines.

    Over that same period, OnCard has plans to issue 10 million pre-paid and rewards cards across 10 Asian countries. OnCard has one of three licences to issue pre-paid cards in Shanghai, and can also issue them in Nanjing.

    The potential of Scanlon's plan was revealed in Oriel's statement to the ASX yesterday. The target noted that FCP Brencorp would deliver "strategic benefits through its network and a number of related investments in the payments sector, such as OnCard and Customers".

    Just how that might be achieved is anyone's guess, but takeovers of one or both cannot be out of the question. Scanlon's proposal for Oriel, meanwhile, ends a two-year search for new capital by chairman Stephen Lucas, who has long worried that once-in-a-lifetime opportunities in China were being missed for want of funding.

    Through that time Lucas has watched a succession of potential investment angels come, and then leave, without taking the bait. Then, in May, Brencorp and First Capital came knocking.

    BENDIGO BANK may well be the corporate pin-up of Victoria's regional cities, a veritable fifth pillar. Untouchable. But it seems to have an awful lot to learn about continuous disclosure.

    It seems to me that the wrong bank announced yesterday that the latest secret negotiations over Bendigo Bank's future had ended.

    At 3.19pm yesterday the now twice-spurned suitor, Bank of Queensland, was left to inform Bendigo's shareholders that a second, all-cash alternative had been rejected by Rob Hunt & Co at Bendigo.

    Just on two hours later, Bendigo popped out a confirmation of the news. Clearly, it had been prepared to let this little matter slip by unannounced. Apparently there was some confusion over whether or not the revised, increased and rejected second offer was confidential or not.

    Certainly though it was too confidential to rate any sort of mention by chief operating officer Mike Hirst in his briefing of UBS clients yesterday.

    Now Bendigo has to be kidding, surely? After the hullabaloo over the rejected first offer, could the bank's board really believe that the rejection of a revised proposal was not material to the market?

    As it is, the market continues to be dreadfully uninformed as to the nature of BoQ's second offer, and why it was considered not good enough.

  9. #9

    Default Re: ONC - Oncard

    Please read Eureka Report of 13 August where Alan Kohler admitted that the price of ONC got halved and he also lost money in this share.
    A big share holder shed its holding only aweek back.
    Probably the future of ONC is doom . It is like we played well but lost the game.

    Miner :
    All sellers are inevitably, and by the meaning of the word, buyers so DYOR .

  10. #10

    Default Re: ONC - Oncard

    Agree (ONC) is looking very promising for a spekkie bet and I am considering getting on board today for a long term buy. The chart is looking strong after the recent downward movement in price between the trend channel since May this year. Note the very small volume on this downward move, which suggests to me that the weak hands were happy to take profits whereas those with the smart money are staying in. A resistance zone has appeared between previous support at $0.33 and the 50% retracement level from all time highs/lows, currently at $0.355. If it can breach this latter level convincingly I will jump aboard this.
    Attached Images

  11. #11

    Default Re: ONC - Oncard

    Hi Lachlan 6

    Any update on your research considering oNC is going to raise $30 M including $5000 each preferential for share holders?
    It is rather a large money considering such a low share performance.

    Looking for any update in addition to what has been posted in ASX today from others as well.
    Is it worth to investment through public and right issue?
    Yes I hold a small parcel bought at 35 cents !


    Miner :
    All sellers are inevitably, and by the meaning of the word, buyers so DYOR .

  12. #12

    Default Re: ONC - Oncard

    Anyone watching ONC? Seems like a fairly financially sound company with the their card numbers increasing alot.. Not much profit increase from 06 to 07 though?

  13. #13

    Default Re: ONC - Oncard

    ONC has no debt. Is at the start of a long growth phase. Is way ahead of their initial 5 year plan targets. Great position to be in considering current world market volatility. According to the last annual report is making profit and has built a solid platform from which to grow.

    Highlights from recent announcements include:

    Outlook | 2008+
     New projects for 2008 onwards:
     Additional prepaid gift card platforms.
     T&E Card concepts.
     Prepaid card partnership possibilities in Thailand and Vietnam.
     Launch loyalty reward based programmes in China.
     Expansion of hotel loyalty platforms.
     Beijing All Payments Co JV with CHIBO.
     Entry into China EFTPOS network.

    The primary strategy for the last financial year was to build our infrastructure across Asia and define our market position as a leading manager and issuer of loyalty, reward and payment programmes. The focus for this financial year will be to add new product services and develop partner opportunities to further grow revenue and card numbers across the region.
    With these solid foundations in place and a strong pipeline of acquisitions and card related opportunities under development, OnCard is well on the way to building a world-class loyalty, rewards and payments network across Asia Pacific that can deliver superior services to its customers and strong ongoing returns for its shareholders. Peter Abotomey

  14. #14

    Default Re: ONC - Oncard

    Is any one on this forum following Oncard ?

    The share price has been stuck in a bit of a rutt since the last stock jitters early in the year

    Apparently they are into profit now and have exceeded their own expectations in card sales in China ?

    Alan Kohler stated it was a good bet
    With Packer Scanlon and Pratt in there
    He also stated he was going to buy for his superfund ?

    PORTFOLIO POINT: Oncard’s cash card numbers are exploding in China. It’s a hot business investors are yet to discover
    see link

    Any thoughts would be a help
    ONC last traded at .18
    Turnover appears to be just starting to pick up

  15. #15

    Default Re: ONC - Oncard

    I bought back when Alan Kohler was giving ONC a big rap for 0.42 c. Has closed today 0.16c.

    Latest announcement (23/6/08) said there are now over 14m cards in operation and

    "Less than 3 years after an initial investment of US$1 million, Shanghai Smart Service Co Ltd has paid a dividend back to OnCard of A$1.53 million".

    I am just hoping the olympics may have a positive affect on share price.

  16. #16

    Default Re: ONC - Oncard

    Hope so Bobcat
    Thought i did well getting in at .20

    Now looking to bail out close to that figure
    Just appears to be no buyers about just a few cross trades.

    I know a bloke who called them up 2 weeks ago
    Just to see if they were still there ??
    some one answered the phone so i guess they are still trading

  17. #17

    Default Re: ONC - Oncard

    New announcement today (1st August) - Shareholder Report for Quarter ended 30/6/08.

    Pretty brief. Does give new total for cards on issue as 17M (up from 14M last quarter), so I guess that is good.

    I also bought when price was high, have since averaged down to 26.5cents.

    Last sale was at 14cents - hardly any trading of the shares recently.

    Hoping we get some action soon

  18. #18

    Default Re: ONC - Oncard

    Strong Cash Levels:

    In an three-page article for the Eureka Report on Oct 15th, Richard Campbell, the executive director of Peninsula Capital Management, looked at various companies with high cash levels.

    Here is what the said about Oncard:

    "Another well-funded micro cap is Oncard, with $15 million cash and a market cap of $33–35 million. Oncard’s business is cash cards, with the focus on Asia and particularly China where a joint venture operation is represented in about 40 large cities. Staff numbers in China, Hong Kong, Malaysia and Singapore are about 400 and it boasts 7000 merchant and corporate issuers of cards, a current 16 million cards and an aggregate float of more than $100 million.

    The cards are variously used as loyalty, rewards, gift and payment cards, with corporate an almost equally branding part of the service. It helps greatly that Asian countries are tending to leapfrog the cheque system, not only because it is expensive and prone to fraud, but basically no longer necessary now that internet payment systems work well.

    China’s fringe benefit concession on salaries is a key driver as well. Up to 14% of salaries can be paid tax-free to the employee. A tax invoice traces usage. As well as earning interest on the float of advanced funds and the merchant fee, Oncard also had the right to retain unspent amounts after a period. As the card base grows – already matching Australia’s card base – even the residuals will be significant.

    Again, this can’t be described as simply a cash box. It has formed a joint venture with a technical subsidiary of the Bank of China. This company, Beijing All-Payments, is planning a national electronic payments and settlement system.

    Oncard intends to leverage its position more broadly into a pan-Asian card and payments system.

    Profit rose sharply to June as momentum gathered pace. Earnings were just shy of 2¢ a share at 1.9¢ for a multiple of less than 8. Growth in the current year is unlikely to equal the early ramp-up 127% of 2008 but is expected to be solid.

    About $4 million of the cash held is in Yuan and US dollar-linked currencies, so in the past two weeks it has gained a notional 20% in value.

    Excluding the $100 million-plus float, Oncard’s cap/cash ratio is a strong 1.6:1."

  19. #19

    Default Re: ONC - Oncard

    Ive been following this stock for 3 years But been expensive for most of the time, finally got in with average price of last month 13 cents. Good luck guys i expect this stock to be very promising. The acquisition of BilltoBill was a great asset that was underpaid in my opinion. But then again companies are related anyway. I would give this one a 3 yr time frame tho. Can't wait till i analyze th next FR. Should be interesting.

  20. #20

    Default Re: ONC - Oncard

    Just had a look at this company for the first time, got all exited for a minute, then I got to the cash flow statement. Oh well what can you do?.
    If a bargain cannot be obtained today, the market will open again tomorrow offering you a fresh new opportunity and a new price.

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