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MarketScreener Homepage  >  Equities  >  Swiss Exchange  >  Swissquote Group Holding Ltd    SQN   CH0010675863

SWISSQUOTE GROUP HOLDING LTD

(SQN)
  Report
Delayed Quote. Delayed Swiss Exchange - 04/09 11:30:10 am
55.5 CHF   +1.09%
03/17A very reassuring guidance (Swissquote Group Holding)
AL
03/17PRESS CONFERENCE : Results for the 2019 business year
PU
03/12SWISSQUOTE GROUP HOLDING LTD : annual earnings release
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A very reassuring guidance (Swissquote Group Holding)

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03/17/2020 | 01:58pm EDT

A very reassuring guidance
EARNINGS/SALES RELEASES

Swissquote released full annual results this morning. It had already disclosed its revenues and pre-tax margin in January (cf. our Latest) but these full results add some positive news to the fintech’s investment case. Profit is indeed higher than our expectations thanks to a new corporate tax regime in the Canton of Vaud (corporate tax rate at 21% vs 25% in 2018). As important is the guidance for 2020 (revenues and net profit above 10%) as the company has leveraged on the markets’ high volatility.


FACT

Today’s Swissquote’s results and outlook were a a sunbeam in current grim environment driven by the spread of COVID-19 in the world. We can’t say the Swiss fintech is “COVID-proof” but its business model makes it an interesting investment case vs traditional banks under our coverage. It has indeed a very limited exposure to credit and market risks. Hence, we expect it to remain strongly capitalised (a CET1 ratio of 21.7% at the end of 2019) and to benefit from financial markets’ volatility.


ANALYSIS

Total revenues were up 7.5% yoy, whereas pre-tax profit was down about 5.9% due to a sharp increase in total expenses (+12%) from the integration of Internaxx (and an increase to depreciation). We expect the growth in expenses to slow going into 2020 and later.
Assets under custody have sharply risen as well, by 35% to CHF32.2bn (already disclosed). Half of the increase has come from market effects and the other 50% from new money (of which about half from Internaxx). Net new money was also quite balanced geographically (Switzerland, Europe (Internaxx), MEA and Americas & APAC).
2019 was therefore a more than decent year for the fintech company but it is almost ancient history at a time when COVID-19 has been rattling the financial markets. However, today’s outlook and conference call were very positive.

Management has been indeed quite optimistic regarding 2020 as it expects revenues to grow at least 10% (as well as net profit).
The company benefits indeed from a high level of trading (etrading FX especially). It has also benefited from “a massive demand in account opening. Several thousand applications are received each week since the beginning of the year”. It now has to translate into revenues.
However, we believe that both volatility and these new accounts will more than offset the negative impacts from a lower market effect on AuC (CHF-4bn ytd) as well as lower net interest income (as global rates have been sharply decreasing after central banks’ rate cuts).

Management has also confirmed its guidance for 2022 where it expects a pre-tax profit of CHF100m (with CHF36bn AuC). We do not have numbers for 2022 at the moment but based on our current estimates for 2021, our future expectations won’t reach that (ambitious) number. However, we are positive on the company and the 2020 guidance will more than reassure investors in the current environment.


IMPACT

Our numbers are under review and we will integrate the 2022 estimates.

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Financials (CHF)
Sales 2020 247 M
EBIT 2020 57,6 M
Net income 2020 49,7 M
Debt 2020 -
Yield 2020 1,89%
P/E ratio 2020 16,6x
P/E ratio 2021 14,7x
Capi. / Sales2020 3,34x
Capi. / Sales2021 3,16x
Capitalization 825 M
Chart SWISSQUOTE GROUP HOLDING LTD
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Swissquote Group Holding Ltd Technical Analysis Chart | MarketScreener
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Technical analysis trends SWISSQUOTE GROUP HOLDING L
Short TermMid-TermLong Term
TrendsNeutralNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 2
Average target price 58,00  CHF
Last Close Price 55,50  CHF
Spread / Highest target 4,50%
Spread / Average Target 4,50%
Spread / Lowest Target 4,50%
EPS Revisions
Managers
NameTitle
Marc Bürki Chief Executive Officer
Markus Dennler Chairman
Lino Finini Chief Operating Officer
Yvan Cardenas Chief Financial Officer
Paolo Buzzi Chief Technology Officer
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