PKK expects $40-million in 2020 revenue 4 cent stock.... PEAK RELEASES THREE-YEAR FORECAST PROJECTING RAPID GROWTH AND INCREASED PROFITABILITY
Peak Positioning Technologies Inc. has released its revenue and earnings before interest, taxes, depreciation and amortization projections for 2020 to 2022, which are summarized in the included table.
2020 2021 2022
Revenue $40,000,000 $55,000,000 $80,000,000
EBITDA $4,000,000 $22,000,000 $55,000,000
The projections for the upcoming three years were adjusted to reflect the developments that happened in 2019 and what has transpired so far in the first half of Q1 2020, including the effects of the coronavirus on overall business in China.
Johnson Joseph, President and CEO, commented: "The recent tightening of financial regulations in China is forcing some consolidation in the commercial lending space. This is creating a unique opportunity for our Group in China to bring some of the best performing loan brokerage firms under the Peak umbrella. The initial investment in time and money to integrate them to the Peak Group will have us sacrifice some previously anticipated short-term profitability, but will position us to become a dominant figure in the Chinese commercial lending market, which will lead to better profit margins than previously expected beginning in 2022. This means that we'll need less capital to generate more profits in the near future and for years to come."
The main catalyst for the forecasted increased profitability is the recent acquisition of the Jinxiaoer platform. In 2020 the Company plans to focus its efforts on acquiring the best performing Jinxiaoer Service Centres (loan brokers) in strategic locations such as Shanghai and Shenzhen to expand the reach of its Cubeler Lending Hub platform, to which Jinxiaoer will be integrated. Although those expansion plans have been delayed by unfavourable conditions in China, pushing back Jinxiaoer's expected positive impact by a few quarters, Peak still expects a strong second half performance and for Q3 and Q4 to account for most of its revenue in 2020.
The financial projections provided by Peak today were based on a set of reasonable assumptions made by the Company, including the return to normal business operations in China at some point in Q2 2020. However, if a return to business normalcy in China delays beyond that, the Company may have to revise its projections. By the same token, as the Company's ability to grow over the next three years is directly related to how much capital it is able to invest to fuel that growth, should the Company succeed in its efforts to access additional non-dilutive capital, it would likewise revise its projections to show more revenue and greater profits.