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
Suited for all market seasons
Target
Upside 19.7%
Price (CHF) 226.8
Market Cap (CHFM) 3,477
Benchmarks Current multiplesWeightValues (CHF)Upside 
DCF (Edit and simulate)  35%25613%
NAV/SOTP per share   20%27019%
EV/Ebitda Peers 7.5 x 20%37364%
P/E Peers 11.9 x 10%27622%
Dividend Yield Peers 1.6% 10%114-50%
P/Book Peers 3.1 x 5%29028%
Target Price  100%27220% 
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 16.1 21.9 4.73 3.26
Swissquote Group Holding's ratios 11.9 7.53 3.14 1.63
Premium -10.0% -40.0% -15.0% 0.00%
Default comparison based valuation (CHF) 276 373 290 114
SwedenNordnet(Consensus) 4,065 18.112.36.263.99
SwedenAvanza(Consensus) 3,052 17.937.75.694.45
GermanyflatexDEGIRO AG(Consensus) 1,090 11.86.342.79n/a
GermanySmartbroker Holding AG(Consensus) 104 6.434.321.330.00
sino AG 89.8 ns34.810.20.26
DCF Valuation Per Share Help View DCF history
WACC % 8.88
PV of cashflow FY1-FY11 CHFM 1,537
FY11CF CHFM 296
Normalised long-term growth"g" % 2.00
Sustainability "g" % 2.20
Terminal value CHFM 4,427
PV terminal value CHFM 1,891
PV terminal value in % of total... % 55.2
Total PV CHFM 3,427
Avg net debt (cash) at book v... CHFM -407
Provisions CHFM 32.4
Unrecognised actuarial losses... CHFM 0.00
Financial assets at market price CHFM 2.12
Minorities interests (fair value) CHFM 0.00
Equity value CHFM 3,804
Number of shares Mio 14.9
Implied equity value per share CHF 256
Sustainability impact on DCF % 1.47
Assessing The Cost Of Capital Help
Synthetic default risk free rate % 3.50
Target equity risk premium % 5.00
Tax advantage of debt financ... % 25.0
Average debt maturity Year 5
Sector asset beta x 1.08
Debt beta x 0.05
Market capitalisation CHFM 3,375
Net debt (cash) at book value CHFM -339
Net debt (cash) at market value CHFM -339
Company debt spread bp 25.0
Marginal Company cost of debt % 3.75
Company beta (leveraged) x 0.99
Company gearing at market v... % -10.1
Company market gearing % -11.2
Required return on geared eq... % 8.47
Cost of debt % 2.81
Cost of ungeared equity % 8.88
WACC % 8.88
DCF Calculation Help
  12/22A 12/23E 12/24E 12/25E Growth 12/26E
Sales CHFM   408 546 653 697 3.00% 718   
EBITDA CHFM   226 311 383 407 3.00% 420   
EBITDA Margin %   55.4 56.9 58.7 58.5 58.5   
Change in WCR CHFM   0.00 0.00 0.00 0.00 3.00% 0.00   
Total operating cash flows (pre tax) CHFM   153 236 306 353 420   
Corporate tax CHFM   -29.0 -38.9 -48.4 -51.7 3.00% -53.3   
Net tax shield CHFM   0.00 0.00 0.00 0.00 0.00% 0.00   
Capital expenditure CHFM   -51.7 -54.6 -65.3 -69.7 3.00% -71.8   
Capex/Sales %   -12.7 -10.0 -10.0 -10.0 -10.0   
Pre financing costs FCF (for DCF purposes) CHFM   72.2 143 192 231 294   
Various add backs (incl. R&D, etc.) for DCF... CHFM   -57.0 -58.7   
Free cash flow adjusted CHFM   72.2 143 192 174 236   
Discounted free cash flows CHFM   72.2 143 177 147 183   
Invested capital CHF   324 346 372 401 354   
NAV/SOTP Calculation
 % ownedValuation technique Multiple used Valuation at 100%
(CHFM)
Stake
valuation
(CHFM)
In currency per share
(CHF)
% of gross assets
Swissquote 100% EV/EBITDA 10 3,681 3,681 247 100%
Other
Total gross assets 3,681 247 100%
Net cash/(debt) by year end 339 22.8 9.22%
Commitments to pay
Commitments received
NAV/SOTP 4,020 270 109%
Number of shares net of treasury shares - year end (Mio) 14.9
NAV/SOTP per share (CHF) 270
Current discount to NAV/SOTP (%) 16.1 View history

Changes to Story : 02/11/2023, Changes to Forecasts : 02/11/2023.