MA Financial group (ASX: MAF)
What is MM current view on MA Financial and why has its share price dropped so steeply this year including post results?
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Answer
Hi Angela,
MA Financial (MAF) has been a frustrating stock this year because earnings have remained strong, while the market has become increasingly cautious on private credit.
The 1H26 result was solid, with underlying revenue up 31% to $215m, EBITDA up 43% to $68m and underlying NPAT up 58% to $36m. MA Money also continues to grow strongly, while management’s FY29 targets point to a materially larger business.
The issue is sentiment and confidence around private credit. MA recently limited redemptions from its flagship MA Secured Loan Series to 1% of fund FUM per month, which management has positioned as a prudent liquidity measure rather than a response to a specific credit problem. However, the optics are still poor. Restricting redemptions inevitably raises questions around fund liquidity, future inflows and whether private-credit AUM can continue growing at the rates previously expected.
That is important because a meaningful part of MAF’s growth story rests on attracting more capital into alternative assets and private credit. If investor confidence weakens, AUM growth slows and the market places a lower multiple on those earnings.
This helps explain why the stock has fallen so sharply despite earnings continuing to rise. The market is no longer just asking “are profits growing?”, but “how durable is the private-credit growth engine?”
We still like and hold MAF in the Emerging Companies Portfolio, and the valuation is becoming increasingly attractive after the sell-off. However, we think the shares will struggle to materially re-rate until redemption pressure eases and confidence in the private-credit platform improves.
