Scott Gordon Investor Relations, Co-Founder, President, Editor-In-Chief at CORE IR
Darren Mercer Chief Executive Officer
Moran Amran Controller
Brian Kinstlinger Alliance Global Partners
Call transcript
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Ladies and gentlemen, thank you for standing by. Good morning. And welcome to the MICT first quarter 2021 financial results and corporate update conference call. At this time, all participants are in a listen-only mode. [Operator Instructions]. will opportunity there ask presentation, today's be to an questions. After Instructions]. [Operator this Participants call that the and is are audio advised broadcast recorded playback of be over is call live of also Internet the purposes. for being this conference the call webcast the available approximately end May XX, XXXX. will one A call be after hour of the replay through of I Scott Relations CORE of company's Investor Gordon, firm. would IR, now like to turn the President conference call over to the Sire, please ahead. go

Scott Gordon

for us MICT and update thank Thank XXXX you results first you Jamie. morning financial joining quarter Good conference everyone for call. the and corporate

Joining Executive us Controller and today for from of Amran, MICT are Darren Mercer, Moran Officer Chief MICT. MICT

During for this including expectations future statements performance forward-looking or be call, management operational making MICT's statements that address results. will

may from differ statements actual cause Forward-looking factors results those involve materially risks and that statements. to other

of today law, disclaims or XXXX. call the to It call. of MICT. obligation pleasure turn Except May as my to information today MICT's about this MICT or reports filed recently risk update statements and to Darren required to Form call with please MICT's particularly content call, refer the Officer information is X-K ahead. and revise over occur to XX-Q contains in by risks, publicly accurate reflect that periodic in described precautionary Darren, it. these information Executive this after that of Form XX, and any to The filed any factors press Mercer, SEC For release the accompanies events most as this that on only please circumstances time-sensitive go is XX-K Chief Form more the now

Darren Mercer

strong to on call deal for If can the straight great time. and we webcast joining have Scott. slide of and been Good you we company morning Thank please presentation, short today. for a amount a thank It's you three. the a the achieved to in go quarter us very the on and and turn

broker to Kong phase From the Hong further launch to enables space, products provides products month the a higher The trading enable insurance move to insurance We us the of from we we have a in remarkable us also will BXC BXC regulatory us our offer business to us in a nationwide customers, our for to rapid expect Chinese into licenses, testing. foundation achieved in of SFC, we acquired terms initiate platform our facilitate and license our late each to In margin which a trading of the in approval technological become to the direct strong China. this terms player. expect is In building we database quarter, and acquisition made progress. volume second performance and growth stock in enables which standpoint, margin. on will BXBXC app, of insurance which

our we rollout an As larger June platform platform trading stages BXC this stock of insurance soft our late we expectation in I of indicated, quarter into July. with final occur with just the during moved testing in to a and launched launch anticipated have the

they commodities that our further and of trading on also provide development have We platform further become the updates as begun will available.

of balance strong great fintech the to in economic in over quarter in regions course progress the fundraisings the of are and technology us growing We our created has in an extremely licenses, in world. create fastest terms of our shape a the that great platform sheet one enables

cash. was a great in and the to excited market last year time which which of majority and very small about are the importantly, divisions We during we QX strong paying cap This Micronet, each the management is a have beyond. are very extremely can we in makes? certification now had they of to executing corresponding growth $X orders please. million market. showing of we only turn also to of the off. underwhelming our Finally, What a we were next year, a is and this If shareholder, in well Most XXXX, T-Mobile in with signs are the company and global our slide, signed teams connect and a difference network. fintech Whereas minority the obtained Micronet, and quarter underperforming shareholder having space and key productivity, very move

sector. concentrate you we for and path, leaders being competitive believe we life trading business-to-business We opinion that BXC platform The in nationwide is our stock to Our we second efforts the lies are the products the online please. driver prepare in the sales our The order drive success in the it move business cash quarter profits to performed this and as wide also prove second over a to competitive beyond. of of please. enabling allowed and three advantages will extremely spaces need significant more The increased Asia $ with better and lines. that China slide, Southeast and well business for platform, to of can allows Chinese our during increased developments is quarter next into insurance that about strong will has sitting us the business. during if have growth to begin million having well, beyond garnered launch insurance in into a come key and our margins, of the develop the the area our in sales the trading along commodities business. performing key the But being in to on believe we of business with lucrative launch we in that revenue in license stock BXB in cornerstones support first next key is business And acquisition platform insurance. one expect our to us And of is well to which offer to emerging to markets. we very trading quarter. In each three continue the range slide and as our health the quarter grow which comparable It the received the

Hong the of approval Kong to between from regulatory the often in premier build Hong is license us the the and customer, the the and Kong SFC from confidence is to as direct party third receive the an Remember, And body licenses that experience. the world. customer first helps a The the Further, trust provider exchanges direct acquisition. one delays the in regarded in which driver license is eliminates important SFC. trades

software, a competitors flexible position that ultimately our which maximizing pricing company's margins. other to are Next software provides is white flexibility reduces product we whilst proprietary in label offer development. Having platforms, developed our own Many of of margins.

we proprietary own of the allows and maintain Importantly, of use our which value. we and not to key of software do our driver, thereby have database, data a share believe our own all us with shareholder to provider, own own platform means

that $XXX leverage Kong believe the frontline support balance key [AUDIO is marketplace. SFC is GAP] is the million, the can And sheet, times margin label because is five sheet extremely a white also rules, this sheet we finance profitable of more our balance providers We in leveraging companies reserves finance for final balance cash with to a platform to possible. provider, flexibility have Under the only Ergo, our maximum. for larger strong margin customers. provide rather are success for to the their but margin incredible Hong margin finance. margin our we financing not only than Margin


reconnect attempt appears Ladies we to remain that ask technical it while patience. and we line. gentlemen, have patient with speaker you the your Thank difficulty that you some for do We line.

Darren Mercer

I left about Okay. can were Thank you to When up, my there. everybody. presentation, glitch please. Perhaps slide get seven. Apologies. start Technical that we we

which to trading customers Turning Asia, of offering with will and provide complete our financial our products. this China Southeast fintech out in slide, a business, suite commodities rounds our

XX% exchanges exchange's to margin provide Our to account affords and relationship some Center, billion to easier financing capabilities. major and partner traders, third-party of will China's a a as and opportunity dollar commodity the acting Petroleum customers the to trading, us key with Shanghai gas approximately execution, this provide partner Trading Gas as make multi-hundred in trade trade China's us of oil with marketplace. clearing whose inroads access strategic commodities Natural with for clients largest Working

slide, to the of Micronet discuss meaningful please. early and would in sales second revenue has I commission moment our which to of the a can generate platform half through the some We Perhaps to XXXX. the take business, quarter. the impressive course are like next over hopeful we had turn now to successes first

our While quarter. the has Micronet's in investments shown promise business Micronet in is fintech offering, now core during our

its a $XXX,XXX. for certification order the X,XXX for a valued reported the first saw recent additional providers million, important the we for operate But during technology $XXX,XXX. products order for to financial perhaps service be And with the for SmartCam for most the XXXX look for we $X.X of follow-on significant will key and and like believe growth Amran to forward similar call a This Moran providers Micronet execution now to subsidiary. T-Mobile certification which global continued first with that the turn review the a over network. order world's XXXX, of quarter largest one opportunities additional of for we a traction quarter the on to to we is First, the additional quarter. is global has telematics units achieved at SmartCam that I with an other company would fourth

Moran Amran

was the year in $X.X quarter the million prior higher quarter versus in the versus the prior you, launch result versus QX The was and net loss $X.X in Gross attributed versus period. The into a was the was year of fintech Thank a QX Darren. market. zero in loss R&D in QX marketing General in insurance was million versus you expense of in expenses versus quarter loss loss of increase zero operating year $XXX,XXX which in in was Selling profit the division, XXXX. million third expense million and The administrative million Darren. a ago in first year company operating $XXX,XXX $X.X year the were million increase of was the $XXX,XXX prior zero in associated in period. Net operating $X.X period QX the QX and ago was Back result a loss $X.X loss in with to expense versus the $X.X late the the period. zero to China December. first in MICT period. year Revenue the of in in QX million in were $X the period. in launched ago

Darren Mercer

Thank you Moran.

As see, market. I can well-positioned Chinese impacts from emerging MICT is hope you significant see fintech clearly the to

has our toward directly reach original the seeing significant BXBXC offerings. to see emerging insurance and begun through as expect business increase customer expand BXB insurance just this and are the BXC our and and revenue Our we from already services themselves

innovative well-planned a our targeted investments highly already platform trading in a launch and significant stock team. Huapei acquisition We driven software to and are experienced our poised our management marketing development, strategy by of

expect futures the to through relationship major supported gas and launch thereafter, focus shortly oil and We is trading platform which with also commodities in our a industry. our unique Chinese

cash extremely opportunities. in current significant respective execute providing division us resources insurance our We to in million sheet balance plans growth stock will result the and which $XXX strong and that trading will larger both have support their trading enable strategy, an profit with growth to division margin on support

turn develops. Q&A are about the to progress thank sharing I we We with and session. it be continued call our could now for excited MICT. you we as for you getting We Gordon to of just your Scott will our and back forward more over support look started the not future

Scott Gordon

these Thank continued received repetitive. and feedback today's were for investors company questions support you of we call you from your for Darren. shareholders. questions thank of many Many interest, The and

today's we on the frequently so asked questions. be And call, will most addressing

the number that a a as price number the not forward-looking regarding trading of Additionally, are company by information company the or its about share has questions shares. of seeking fluctuations disclosed and things are questions received of activities well

shareholders' the market reason you market. financial and the forward-looking regulatory what its comments matter did As first strategies of offer company guidance do on do or and it was the a how the With the compliance, capital believe is, for shares you that, interim of fundraising question update, the or performance or policy in does interest? recent in operational not

Darren Mercer

Thank you.

really from is our insurance fintech short created capital have think growth a and I that Southeast huge just three capital access business markets And required. to the and China business. to growth we which mind, already I we or within we to our the to bear capital. not businesses, fuel If opportunity is look as have and what in the of Asia one more three the at additional have we fintech growth cash long-winded enormity is, pace is consider think answer we create benefiting answer look at The at to additional requirements. working but is

the launch and peers Additionally, with in financial and in trading secured lucrative platform, Hong we a have now stock China we licenses opportunity itself. service to and most exciting Kong the compete one is very of what with our the vertical highly

As to also we believe, trading, of huge to of is us fundraise require And for to underlying a be this course, also going clients facilities. margin we to as I for blue said, financing and mentioned that clients. the a presentation, be drive. empowers And in slide to be offer the that it commodities leveraging on going division. contributor, that our critical itself is enables chip will our able profitability to And

will us. focus this growth also, capital one have, starve our choose than we raising on by again, of guess rather growth the needed be believe, having capital. area we of or a the to more three I fintech lucrative and businesses can for of so, that all And one

Scott Gordon

you burn changing question. funds raised the And the What burn? near future? cash The that to do burn? Were anticipate next in Thank you accommodate company's Darren. that current is

Darren Mercer

That's question. a good

when previous As was further And cash growth take end you I in cost and $XXX of QX at million answer, cash we The cash which, comes in we XXXX, a the capital. have if our raised position cash look could then cash the what million $XX had down just burn. around you $XXX around we to not out, raised bank have was was raised for at the for said the million. since in

cash the acquisitions funded development, So, research bearing we in our you costs and small. forth, so two during completed the rather actually and and mind that is we see can so have also on quarter, burn pre-launch

capital our are for clients. answer, As our primarily I previous said enable to in underlying funds offer facilities the us growth to leveraging

Scott Gordon

the the and deliver operating beyond? QX Thank to do you. for was business loss And QX? What insurance in it of profit you expect or profit

Darren Mercer


First think I statements. am to of not that all, I allowed give I forward-looking should say

margin, what the am believe But around really profitable I And that comment or as have I will now. when not I to become division that in this of please say $XXX,XXX. very going particularly and us continuing is move on much. we loss grow was with can and the So is higher towards more announcements gross we products they today, to contribute continuing that business BXC to said BXBXC will And very, as profit. clearly the much

way I So permitted answer only question. that's that the am

Scott Gordon

Thank you you. the that stock likes confident achieve your UP Futu Why Fintech? be of and able to are will app so trading

Darren Mercer


So I say. I should two things, think

by as UP the darling those cap known the market that's billion-dollar NASDAQ company don't is often is Futu stock of So the industry, trading. And in name. Tiger, $XX for know who official

Some really questions. good

things. a So of couple I think

Fintech week. a presentation, a results the was there last critical. and feel what upon three really basis I you, in a said Hong Hong license amounts Kong is giving provide I important the the Asia, regulatory. is to this when really to Kong are, large for business. will their Interesting results And Futu license. In their has money lot areas of it stock Kong you customers Kong before Futu's think regarded got as Southeast carry their one. we a a trading conferences importance large your with As Hong stock presentation, of of of underlying the it's those said of UP gives security And hasn't in successful on, protected. without the main we And are money components marketplaces. is comfort is premier doubt a Hong in license user. amounts three as that is And exchange that first and the presentation trading are

I acquisition. advantage why for a Zealand. But New ask significant has it them, have customer in think the And to it us licenses that's you gives really case.

an own platform. your Secondly, I proprietarial innovative think technology, to a it's important have and robust

platform. can because we believe we will best the suite brokers. the product. believe [indiscernible] the we that when of white have like So product again, own the to and you you many People with has that's contrasts own if and really weakness. think customers of there interactive different reasons. And create And our use that benefits of all flexibility as firstly, stock those a change enterprise marketplace. trade many we its and a this need a think We arises our Futu in get platform don't it label

Secondly we you margin keep the don't, all proprietary in of yourself. owning your platform,

to is as think sharing clients away third-party often a cross of minute giving not about a presentation in just throughout all commodities one drive you this significant we the in moment provider, use I to that information third-party And we group the provider. your through the data, value. data, pollinate And the said are and through The your control to with ability importance the it lose data. going business. You of trading not forgotten our to insurance going be you underlying business think, data, that and of ago. the shareholder the help I is is but And very start think, important,

sheet, book. balance a to for. you on is fund ability progress going significant wish competitive raise, that he you that landscape, the are million is full area one now thing. to why range with raises first a we hard have Having third we to make what cannot margin And and very fund great this of to you the services we $XXX place. did this of is. if But finance that one The a did the in offer With Having or it the customers main app and another. hope underlying back your reasons it goes to license in find is provide

to One from this level our is the things regulated of of Kong, cash only strictly leverage we times ourselves five regulated in balance market we in Hong the need being sheet. the premium remember can on

clearly, the have to more times I part said we so going have, business. as be can more the And And a important we several cash today, it's leverage. the profitable of very

Scott Gordon

do you what launch to stock trading tell Thank app about us you. expect can When plan? And the launch? you the

Darren Mercer


there July. we launch think end that the are with rollout earlier be today I at soft full launching, a we of June said a will in

we plans But competitors, keep them exciting excited As the what not for are right. that's all excited. if with very would and rather by will got, I powder share is, the I have dry very my our product say itself, we

are about very are about developments We about launch we the excited we excited to made the have are embark upon. and we that very

Scott Gordon

Thank And and trading plan to to do futures? with other expand commodities are gas? services What you. provide you to and after planning to commodities regard oil you

Darren Mercer


that's terms companies, trading. and we here commodity the gas can't China stock the fees looking more we in some do who Are disclose trading we very profitable China's provide very are that in center of as are. areas. stage. we large and of markets the in largest on like So commissions we Needless China's and access those we very what and in well leading I many provide for as we in bureaus, But are largest is, to companies return how world. are Shandong trades than exchanges, Yes, And other because one the Dalian which service in state-owned Gas underlying clients, at this in at corporations Sinopec to departments do blue very government oil should execution clients chip includes similar say, this futures the or Oil service really and what exchange something the it's again commodity also indeed. amongst finance. market open to, margin and And we

Scott Gordon

one-off you. Thank you more little out regarding loss for a XXXX cost us performance back financial adding bit tell Can about Micronet's QX non-GAAP after and losses? your stripping

Darren Mercer

R&D amortization The $X.X million And agreements intangible assets and and this, costs down was of nets non-gap quarter after which get development and adjustments loss for will I into all after to $X.X for launch well expenses cost losses Okay. better after relating Micronet's calculator. my the pre-launch account, to out our as settlement million. of taking of as $XXX,XXX, businesses. our stripping

Scott Gordon

Thank you.

the as these a say shareholder price two dilution fell raises, after points? significantly the of result you the to Regarding share second raise. back on can fund reassure What QX investors

Darren Mercer

deliver It's a believer asked. value. am the or the in question a I and the I we is sometimes we important think, irrelevant. will am dilution, will strong you I to, I stake. say way I the percentage deliver investment expect in misused And far a expecting is that business largely we a have the who to and most, to misunderstood any word. agree shareholder say, Yes. that that often And And that is also hold in that are with out those more is growth experts about What if

fintech would When rather of capital, owner As all. have times opportunities they it creating I world. company growth very hasn't several shareholder reality the often be diluted in have X% tell other I of owner in today, in an the said people, value I required been XXX% than and nearly we at of have of Apple space amazing finished

were the this outstanding bank back where of loan only fact, we and divisions insurance I and The of the us or showed we is outstanding, quarter been keep impact significant able three quite did last the is seeing XXXX unsung million go perhaps upon $XXX as shareholder positive XX% come today, which immeasurably, the the deliver the added are great and prices we growing and in of pleasing the in hero would fundraises share well online and about price as share $XX.X at share its and price have stake our our argue be deliver two we and accretion I I business trading I shown in only had itself is plans to and today. to to where now shares are in promise $X we a XX% in a the million Micronet. funded were exchange, today have Look and to we stock the is would just platform commodities where where as saying, and deliver shareholder on volatile. what in In we all end. is not year, $X in, But value. QX on right the preference believe slide time million on to And may then They of contrary. value. million argues, will

Scott Gordon

you. Thank

company's Our analyst is you do analyst final covers analyst At question. value. understand the near market in it future? help potential research, the to to expect research be When can important expect we channels your first And the published?

Darren Mercer

people delivered want very one advise the conversations It's arrange in number write who a Those rather a we a many didn't I They us I with U.S. see stringent that those are sooner started. we quarter of I say, want That's already received the company that's, Okay. But revenues. really is a numbers question. had to Honestly, is, QX fair to often that research But have of They stage. now would nascent numbers. about analyst have our shareholders on would have. analysts wanted time. write very we in than guess, first. to such of from broker no are they and a

immediate, those of to five, of write. shareholders research and guys The business XX the day pick with motivate about that process tasks can is threads fix. thing through is of very us. of the of about write One before warts again go an The weeks some in three, not they what all aware our next they and over analysts we of must to the analysts diligent up and that and America encourage hope is my and are process great is they be incentivized those those guys couple

a report And started those that progress. to with that take the what is I make But can reported, conversations so number numbers hope weeks. more significant have of we now and can

Scott Gordon

Darren. we Jamie, open queue from go you the questions ahead. will participants. for Please Thank now


[Operator Instructions].

Alliance with go Brian Global ahead from comes question Our your Please first Kinstlinger today question. Partners. from

Brian Kinstlinger

Hi Thanks my Darren. quarter. curious question. stock platform. I Great trading for the on am taking

What's them are to with share willing, make your aware customers? competitive of how you acquire app? to given you plan If can bit, you us, little it's strategy a if the new

Darren Mercer

a in competitor weeks as of it want like possibly that's is the will keep am clear track and evident it question. answer our I I our can. of What to where can that coming world. say giving management acquiring is. be customers as I very would secret of has we record advantage to guarded become I the region really a this Brian, only because going to source this And team the without too I long in away, have

We have they people doing. who from the industry are know what

publicly We very marketing marketplace. I see we think And ideas will have promotion said, we much competitive exciting it's from of team. have a a marketing as great we it. positive too really because, results couple which a I don't want say to

few is weeks I of our that to a just ahead ensues we launch. want still app keep from And Our competitors.

Brian Kinstlinger

the us? that. are I can insurance share second in then into about And Great. business, the We you any with understand details quarter. two-thirds

for has second increases the maybe been you you how on a and about basis number executed share or so been customer You quarter the month-to-month of far? progressing in out quarter anything Can far about in second much of any it's second playing sense is it accounts? the Can with talked talk so already to us how appears about quarter. it the talk stronger

Darren Mercer

today. I that the a week that very a impasse to we lot I for which information publicly differently year I in That's have was give question. it Chinese to remember perhaps we I is only you like by that is Christmas told announced to two, had in quarter a How the three say my lawyers New this can but of can not first Year, answer answer, am And happens. west, fair again,

with scores. February We was yet, don't did have will quarter. what margin was thing in platform. license. nationwide our rates, get in key also second nationwide add left most the of receive still up the of interference is that this So we we And first good a that a really a amongst and And quarter also think of And we the platform to quarter the to thereby going active not launch think do better license. on final quarter to commission delivered quarter. And license of has as fairly on that then I allowed insurance who will higher sooner, a can part. are brokers more coming support that where more getting has BXB relationships stream the to much in key we where sign a BXBXC who sign It's with I get shortly what are allowed we result us And increasing major our to we get us on it's BXC bring allowed to it nationwide margin one sales. Chinese up so us next we

All and hope QX of what increases significant are in see, revenue will beyond. we those in

Brian Kinstlinger

Thanks Great. Darren.

Darren Mercer

Thank you Brian.


[Operator further no showing to closing am to will today's floor audio question-and-answer like conclude any Instructions]. would questions. session. Mercer remarks. Ladies and for gentlemen, I over now I I back Darren

Darren Mercer

us for their time them. except and this have us allowing closing with I everybody remarks, to morning no to sharing thank speak to


you conclude for and the We with today's call thank and presentation. conference joining. that, do gentlemen, ladies And we will

You may your now disconnect lines.