MICT Inc (NASDAQ: MICT) is setting the stage for a strong day in the market today after releasing its financial results for the fourth quarter. Not only did the results show strong revenue and a minimal non-GAAP loss, the company’s performance in a year when the COVID-19 pandemic took hold around the world is impressive and the company’s cash position is something you never see among companies of its size.
Here’s what’s going on:
MICT Reports Financial Results
As mentioned above, MICT reported its financial results for the fourth quarter and full year this morning, which proved to be overwhelmingly exciting.
During the year, the company generated $1.2 million in revenue, representing a 146% increase over 2019. Importantly, $824,000 of the revenue was generated in the fourth quarter, largely as a result of the company’s strong performance in the insurance market, which is expected to grow at a compelling rate throughout this year and beyond. Moreover, the non-GAAP loss came in at just $3.9 million.
Importantly, in the fourth quarter of the year, the company entered into an agreement to acquire Huapei, a Hong Kong Securities and investment firm. This acquisition was completed early this year, setting the stage for the company to move forward with its proprietary stock trading platform, which MICT says its testing as we speak.
Importantly, the insurance platform launched ahead of schedule, driving compelling revenues in December, which are likely to expand greatly as the 2021 year continues to roll. The growth potential here is exciting, especially considering the nationwide licence the company acquired to distribute its products throughout China in February.
While all of the above is impressive, the cash position here is something we never see with companies of this size. The company closed the 2020 year with $29 million in the bank. So far this year, it has raised another $114 million. So, all told, we’re talking about a company with a market cap of about $200 million that’s holding nearly three quarters of that total value in cash!
In a statement, Darren Mercer, CEO at MICT, had the following to offer:
The year 2020 was pivotal for MICT as we made the transition from telematics to fintech in the China and Southeast Asia market, and established a significant cash balance to execute and support that strategy. Whilst the year presented overall loss, this can be balanced by the very significant one-off costs necessary to achieve the acquisitions that formed the basis of our go-forward strategy, and we began to reap the benefit of those investments at the end of the year.
Our insurance business started strongly following an encouraging launch in the fourth quarter of 2020, and we continue to see those revenues grow. Additionally, we are excited about the impending launch of both our proprietary stock trading platform, driven by an innovative and targeted marketing strategy and our commodities and futures trading platform, which is supported through our unique relationship with a major force in the Chinese oil and gas industry.
Whilst the investment in Micronet has begun to show promise, we are especially excited about the potential of our three fintech verticals. The importance of our strong cash balance cannot be understated, given the support it offers to fuel the company’s growth. Both the insurance division and stock trading division have significant resources to support their current respective growth plans, and we are excited to share our upcoming successes with our shareholders as we execute on these carefully crafted plans.
The Bottom Line
The bottom line here is simple. MICT is firing on all cylinders and reporting record revenues as a result. With a trading platform that’s likely to launch in the very near term, and compelling revenues coming out of the insurance side of the business, if you’re not paying attention to the ticker yet, you’re missing out.
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Disclosure. CNA Finance is not a financial advisor or broker dealer. This article does not constitute a solicitation to buy any stock mentioned. The article represents the honest opinions of the author, but not necessarilly the outlet it was published on. CNA Finance has a monetary relationship with MICT. Trading in penny stocks can result in the loss of capital.