Outlook for 2017Ever since the idea of having its own financial institution subsidiary began to circulate in Q4 2016, the Company began the process to find the right financial partners for a potential joint venture that would lead to the creation of that subsidiary, named Asia Synergy Financial Capital ("ASFC"). Considering the impact that ASFC is expected to have on the Company's Chinese operations and its bottom line, a great deal of attention will be allocated by the Company's management in 2017 to sign agreements with one or more financial partners to get ASFC established as quickly as possible. As of the date of this news release the Company was in discussions with a number of potential financial partners who had expressed an interest in making a direct investment in a joint venture transaction with the Company for the creation of ASFC.
Once it's up and running, ASFC will be the only financial institution on Gold River, and as such will earn interest only on the credit it extends on the platform. However, things will be different on Cubeler as the platform is intended to have many other lenders who will be extending loans and credit on the platform along with ASFC. Under the Cubeler business model, Asia Synergy Data Solutions ("ASDS"), Peak's newly created subsidiary and the platform operator, will charge and collect a 2% fee on all credit products offered on the platform. That fee will be shared between ASDS, ASFC and the insurance company providing insurance of the platform's credit products. So in addition to earning interest on its own loans, ASFC will also earn a percentage of the value of every loan and credit product extended on the platform by all platform lenders. The more lenders on the platform, the more credit transactions facilitated by the platform, the more revenues ASFC will earn.
"We couldn't be more excited about the prospect of owning our very own financial institution", commented Johnson Joseph, President and CEO of Peak. "From the discussions that I've had with some investors since the release of our revised executive summary presentation, it would unfortunately appear that many of them are so focussed on our lower revised target revenues for AST that they fail to realize that the financial impact that ASFC is expected to have on the Company will more than offset AST's reduced revenue targets. Hopefully, that will be clear once we publish our revenue targets for ASFC in a few weeks" concluded Mr. Joseph.
Investor Conference Call:
Peak will hold a 30-minute investor conference call at 4:15pm (EST) on Monday May 8, 2017 to discuss the Company's Q4 2016 financial results, the adjustment to its business model with the planned creation of a financial institution subsidiary, and its revenue targets for 2017.