Northern Securities analyst Sameet Kanade says Tio Networks is a Buy

Tio Network’s CEO Hamed Shahbazi. Northern Securities analyst Sameet Kanade says the company could be a takeover candidate. Tio Networks (TSXV:TNC) today announced it has licensed its bill-payment technology to BAF Global Group of the Bahamas. The company says it is already processing walk-up bill payments for Grand Bahamas Power, which is the largest power company on Grand Bahama in the Bahamas.

“We are proud to have partnered with BAF for the launch of our first international licensing arrangement,” said Tio CEO Hamed Shahbazi, adding: “With this integration, BAF is now able to on board their own billers without having to create the transaction engine on their own, while enabling biller partners to offer a variety of convenient walk-up payment solutions for end customers.”

Northern Securities analyst Sameet Kanade says that while today’s contract isn’t meaningful revenue wise, it could be a stepping stone towards more international business. He notes that a recent pullback in the company’s share price has brought it back in line with other TSX Venture smallcaps, but Tio’s fundamentals have improved every quarter. In an update to clients today, Kanade reiterated his BUY recommendation and $0.80 cent target price on Tio Networks.

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Founded in 1997, Vancouver-based Tio Networks specializes in billing solutions to the “unbanked”; a segment of society that, in the US alone, could be as many as thirty million households that simply do not deal with conventional banks. The company, which now boasts more than 60,000 physical location endpoints to its bill payment processing network, rose to public attention early in 2011, when PG&E, the utility that powers two-thirds of California turned to Tio for a mobile payment app. Tio’s revenue has grown from $14.2-million in 2008 to $36.5-million in fiscal 2011.

Kanade says that while Tio is likely well on its way towards expanding its network of operators in international markets, he would not be surprised if a potential bidder were to arise for the company, because its valuation relative to its US peer group is attractive.

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