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Swissquote Group Holding

CR
Bloomberg   SQN SW
Internet banking/Fintech  /  Switzerland  Web Site   |   Investors Relation
Licensed to conquer Europe
Target
Upside 48.1%
Price (CHF) 134.7
Market Cap (CHFM) 2,065
Perf. 1W: 5.65%
Perf. 1M: 10.8%
Perf. 3M: 19.5%
Perf Ytd: -31.7%
10 day relative perf. to stoxx600: -3.85%
20 day relative perf. to stoxx600: 5.61%
Other news/comments05/10/2022

Swissquote’s own crypto trading exchange magnifies its potential

Swissquote has announced the launch of its own crypto trading exchange, a material innovation to improve its service to customers but also enhance the profitability of these assets. Any recovery from the crypto asset class will be incredibly lucrative for Swissquote.


Fact

Swissquote has hitherto been using the Bitstamp and Coinbase exchanges as liquidity providers for crypto trading as well as custodian services. This means that for any order sent by a Swissquote user to buy BTC or ETH (among others) on the platform, the order would be re-directed to the Bitstamp or Coinbase exchanges. This has meant potential friction, reliance on external providers (potentially decreasing stability) for execution, liquidity and dependent upon their regular maintenance. This has also meant commission for trades (0.5% to 1%).

With its own exchange, which at first will be rolled-out to Bancor (BTN) and progressively to all 36 tokens available on the Swissquote platform, the product should considerably improve.


Analysis

Despite the crypto crash, we are convinced that Swissquote’s efforts to make its exposure even more profitable is worthwhile. This bodes well for the whole investment case on the firm. In times of market turmoil, the performance is obviously impacted, although margins are expected to be maintained given that a material part of Opex is variable compensation for employees indexed on the firm’s performance and that the fact that Swissquote is progressively hedging this exposure with asset-based revenues (driven, in part, by higher interest rates).

However, the continued growth in client accounts and assets is pure dry powder for when markets rebound and further highlights the very attractive and convenient product.

As such, looking at revenues, we see its as only a matter of time before Swissquote fully gains advantage of its growing customer base, even further enhanced by higher profitability on crypto products thanks to the new exchange.


Updates

10 Aug 22 Earnings/sales releases
Revenue decreased but client growth is pure dr...

17 Mar 22 Earnings/sales releases
A record year punctuated by diversification to ...

13 Jan 22 Earnings/sales releases
Buy the dip

06 Aug 21 Earnings/sales releases
Good numbers, increase in guidance, modest ...

17 Jun 21 Opinion change
Impressive again

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