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
Licensed to conquer Europe
Target
Upside 14.0%
Price (CHF) 175.1
Market Cap (CHFM) 2,684
Perf. 1W: 6.70%
Perf. 1M: 28.8%
Perf. 3M: 47.3%
Perf Ytd: 31.2%
10 day relative perf. to stoxx600: 14.1%
20 day relative perf. to stoxx600: 21.7%
Target Change28/09/2022

Markets don't help but client growth is a sustainability guarantor

Change in Target PriceCHF 186 vs 211-11.8%

We reduce our TP integrating the last financials.
The cut is mainly driven by reduced revenue expectations from crypto assets. Tumbling equity markets also have a negative impact on clients’ assets.
On the other hand, we continue to expect strong client asset inflows on the back of client account openings. Coupled with higher interest rates, this should partly offset the drop from transaction-based revenues.
Overall, our estimates for FY 22 land at the bottom of the firm’s guidance (CHF400m net revenues vs. CHF400m-420m) and below that of 2025. Despite that, fundamentals still imply a strong upside to the current share price, the latter pricing a worst-case scenario.
Our thesis does not change in that we strongly believe that the continued growing customer base is pure dry powder for better financial markets’ times.



Change in EPS2022 : CHF 10.7 vs 12.3-13.7%
2023 : CHF 13.1 vs 14.0-6.04%

Our EPS is reduced as we decreased our top-line expectations (from CHF463m to CHF 400m in 2022 and CHF 512m to CHF 476m in 2023). Our PBT margins are even slightly increased (46.5% in 2022 vs. 45.7% previously) as Swissquote has a mighty control over its costs (a material part of these being employees’ bonuses linked to the firm’s performance).



Change in NAVCHF 152 vs 194-21.3%

The NAV target is slightly cut as we have kept the same P/E multiple (10.5x) but decreased the average earnings over (23-24) to CHF 216m.



Change in DCFCHF 220 vs 257-14.4%

We cut our DCF valuation on the back of reduced revenue expectations for the next 3 years.



Updates

16 Jan 23 Earnings/sales releases
Swissquote meets 2022 expectations; onwards ...

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 ...

123Next
.