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 18.2%
Price (CHF) 167.5
Market Cap (CHFM) 2,568
Benchmarks Current multiplesWeightValues (CHF)Upside 
DCF (Edit and simulate)  35%22333%
NAV/SOTP per share   20%152-9%
EV/Ebitda Peers 7.3 x 20%23943%
P/E Peers 12.2 x 10%23842%
Dividend Yield Peers 1.6% 10%104-38%
P/Book Peers 2.8 x 5%149-11%
Target Price  100%19818% 
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 17.3 11.1 1.66 3.43
Swissquote Group Holding's ratios 12.2 7.26 2.80 1.60
Premium 0.00% 0.00% 50.0% 25.0%
Default comparison based valuation (CHF) 238 239 149 104
London Stock Exchange Group 46,225 23.612.31.511.35
Deutsche Boerse 30,529 19.713.23.392.45
Julius Baer 12,438 13.010.01.774.45
Amundi 12,281 11.48.691.095.71
Euronext NV 7,975 16.510.91.703.01
DWS 6,624 9.714.730.9016.6
DCF Valuation Per Share Help View DCF history
WACC % 8.34
PV of cashflow FY1-FY11 CHFM 1,260
FY11CF CHFM 231
Normalised long-term growth"g" % 2.00
Sustainability "g" % 2.15
Terminal value CHFM 3,739
PV terminal value CHFM 1,679
PV terminal value in % of total... % 57.1
Total PV CHFM 2,939
Avg net debt (cash) at book v... CHFM -406
Provisions CHFM 32.3
Unrecognised actuarial losses... CHFM 0.00
Financial assets at market price CHFM 8.34
Minorities interests (fair value) CHFM 0.00
Equity value CHFM 3,321
Number of shares Mio 14.9
Implied equity value per share CHF 223
Sustainability impact on DCF % 1.21
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 0.97
Debt beta x 0.02
Market capitalisation CHFM 2,492
Net debt (cash) at book value CHFM -353
Net debt (cash) at market value CHFM -353
Company debt spread bp 10.0
Marginal Company cost of debt % 3.60
Company beta (leveraged) x 0.87
Company gearing at market v... % -14.2
Company market gearing % -16.5
Required return on geared eq... % 7.86
Cost of debt % 2.52
Cost of ungeared equity % 8.34
WACC % 8.34
DCF Calculation Help
  12/21A 12/22E 12/23E 12/24E Growth 12/25E
Sales CHFM   472 400 476 556 3.00% 573   
EBITDA CHFM   255 219 267 320 3.00% 330   
EBITDA Margin %   53.9 54.6 55.9 57.6 57.6   
Change in WCR CHFM   0.00 0.00 0.00 0.00 3.00% 0.00   
Total operating cash flows (pre tax) CHFM   313 242 222 275 330   
Corporate tax CHFM   -30.2 -27.7 -33.9 -40.9 3.00% -42.2   
Net tax shield CHFM   0.00 0.00 0.00 0.00 3.00% 0.00   
Capital expenditure CHFM   -28.0 -40.0 -47.6 -55.6 3.00% -57.3   
Capex/Sales %   -5.93 -10.0 -10.0 -10.0 -10.0   
Pre financing costs FCF (for DCF purposes) CHFM   254 175 140 179 231   
Various add backs (incl. R&D, etc.) for DCF... CHFM   -46.2   
Free cash flow adjusted CHFM   254 175 140 179 184   
Discounted free cash flows CHFM   254 175 129 152 145   
Invested capital CHF   282 344 366 392 358   
NAV/SOTP Calculation
 % ownedValuation technique Multiple used Valuation at 100%
(CHFM)
Stake
valuation
(CHFM)
In currency per share
(CHF)
% of gross assets
Swissquote 100% PE 10.5 2,268 2,268 152 100%
Other
Total gross assets 2,268 152 100%
Net cash/(debt) by year end
Commitments to pay
Commitments received
NAV/SOTP 2,268 152 100%
Number of shares net of treasury shares - year end (Mio) 14.9
NAV/SOTP per share (CHF) 152
Current discount to NAV/SOTP (%) -9.89 View history

Changes to Story : 28/09/2022, Changes to Forecasts : 28/09/2022.