AlphaValue Corporate Services Fundamental Analysis FR
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AlphaValue Corporate Services
This research has been commissioned and paid for by the company and is deemed to constitute an acceptable minor non-monetary benefit as defined in MiFID II

Swissquote Group Holding

CR
Bloomberg   SQN SW
Internet banking/Fintech  /  Switzerland  Web Site   |   Investors Relation
Exporting high quality financial technology
Target
Upside 33.6%
Price (CHF) 158.8
Market Cap (CHFM) 2,434
Benchmarks Current multiplesWeightValues (CHF)Upside 
DCF (Edit and simulate)  35%22542%
NAV/SOTP per share   20%18416%
EV/Ebitda Peers 8.2 x 20%22240%
P/E Peers 12.6 x 10%27875%
Dividend Yield Peers 2.4% 10%18919%
P/Book Peers 4.1 x 5%107-32%
Target Price  100%21234% 
Valuation matters

Peers

Concerning its peers, we consider Viel & CIE (Tradition’s main shareholder) as Swissquote’s closest peer (in our coverage). Euronext, Deutsche Boerse and the LSEG are also reasonable proxies of the Swiss Fintech as they are more and more tech-focused and remain dependent on trading volumes. Asset managers Amundi and DWS are dependent as well on the financial markets. As Swissquote is in theory a bank, we find it right to compare it to Swiss banks UBS and Julius Baer which are also mainly dependent on fees (wealth management).

We apply a 50% discount on the yield-based valuation as, contrary to all its peers apart from the market venues, Swissquote prefers investing rather than paying out dividends (in line with its DNA as a fintech company).

DCF

The DCF is based on a computed 10-year revenue and EBITDA growth of 3% to factor in the higher growth of fintech banks compared to traditional ones.

Comparison Based Valuation
Computed on 18 month forecastsMcap (€M]P/E (x)Ev/Ebitda (x)P/Book (x)Yield(%)
Peers ratios 19.1 11.9 1.86 2.68
Swissquote Group Holding's ratios 12.6 8.19 4.11 2.40
Premium 15.0% 0.00% 50.0% 25.0%
Default comparison based valuation (CHF) 278 222 107 189
London Stock Exchange Group 49,906 26.613.81.731.65
Deutsche Boerse 29,868 22.414.83.952.20
Amundi 14,397 13.68.691.375.14
Julius Baer 12,909 14.010.91.753.12
Euronext NV 9,250 16.611.31.902.95
DWS 7,432 10.44.840.995.68
DCF Valuation Per Share Help View DCF history
WACC % 8.50
PV of cashflow FY1-FY11 CHFM 1,344
FY11CF CHFM 266
Normalised long-term growth"g" % 2.00
Sustainability "g" % 1.95
Terminal value CHFM 4,056
PV terminal value CHFM 1,794
PV terminal value in % of total... % 57.2
Total PV CHFM 3,138
Avg net debt (cash) at book v... CHFM -216
Provisions CHFM 1.00
Unrecognised actuarial losses... CHFM 0.00
Financial assets at market price CHFM 0.00
Minorities interests (fair value) CHFM 0.00
Equity value CHFM 3,353
Number of shares Mio 14.9
Implied equity value per share CHF 225
Sustainability impact on DCF % -0.41
Assessing The Cost Of Capital Help
Synthetic default risk free rate % 3.50
Target equity risk premium % 5.00
Tax advantage of debt financ... % 30.0
Average debt maturity Year 5
Sector asset beta x 1.00
Debt beta x 0.40
Market capitalisation CHFM 2,363
Net debt (cash) at book value CHFM -168
Net debt (cash) at market value CHFM -168
Company debt spread bp 200
Marginal Company cost of debt % 5.50
Company beta (leveraged) x 0.95
Company gearing at market v... % -7.12
Company market gearing % -7.67
Required return on geared eq... % 8.25
Cost of debt % 3.85
Cost of ungeared equity % 8.50
WACC % 8.50
DCF Calculation Help
  12/20A 12/21E 12/22E 12/23E Growth 12/24E
Sales CHFM   317 465 489 514 4.00% 535   
EBITDA CHFM   135 242 254 268 4.00% 279   
EBITDA Margin %   42.5 52.0 52.0 52.2 52.2   
Change in WCR CHFM   0.00 0.00 0.00 0.00 4.00% 0.00   
Total operating cash flows (pre tax) CHFM   176 144 222 235 279   
Corporate tax CHFM   -14.6 -31.5 -33.1 -35.0 4.00% -36.4   
Net tax shield CHFM   0.00 0.00 0.00 0.00 4.00% 0.00   
Capital expenditure CHFM   -30.7 -39.0 -41.0 -43.0 4.00% -44.8   
Capex/Sales %   -9.67 -8.40 -8.39 -8.37 -8.37   
Pre financing costs FCF (for DCF purposes) CHFM   131 73.3 148 157 198   
Various add backs (incl. R&D, etc.) for DCF... CHFM     
Free cash flow adjusted CHFM   131 73.3 148 157 198   
Discounted free cash flows CHFM   131 73.3 136 134 155   
Invested capital CHF   307 269 275 273 284   
NAV/SOTP Calculation
 % ownedValuation technique Multiple used Valuation at 100%
(CHFM)
Stake
valuation
(CHFM)
In currency per share
(CHF)
% of gross assets
Swissquote 100% P/Operating profit 12 2,520 2,520 169 100%
Other
Total gross assets 2,520 169 100%
Net cash/(debt) by year end 216 14.5 8.56%
Commitments to pay
Commitments received
NAV/SOTP 2,736 184 109%
Number of shares net of treasury shares - year end (Mio) 14.9
NAV/SOTP per share (CHF) 184
Current discount to NAV/SOTP (%) 13.6 View history

Changes to Story : 09/08/2021, Changes to Forecasts : 09/08/2021.