Märkte & Kurse

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Original-Research: Multitude SE - from NuWays AG

14.10.2024 / 09:00 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group AG.
The issuer is solely responsible for the content of this research. The
result of this research does not constitute investment advice or an
invitation to conclude certain stock exchange transactions.

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Classification of NuWays AG to Multitude SE

     Company Name:                Multitude SE
     ISIN:                        MT0002810100

     Reason for the research:     Update
     Recommendation:              Buy
     from:                        14.10.2024
     Target price:                EUR 12.00
     Target price on sight of:    12 months
     Last rating change:
     Analyst:                     Frederik Jarchow

Sensible strategic acquisition of stake in Lea Bank ASA

Topic: Multitude announced to have acquired a 9.9% stake in Lea Bank ASA
with an option to acquire further 8.7%, once having received the approval
from the regulatory authorities in Norway and Sweden. Here are our key
takeaways:

  * Complementary risk profile as good strategic fit. Lea Bank is active in
    the consumer lending space with a strong regional footprint across
    Nordic countries and Spain. As Lea Bank is offering prime loans to
    consumers, the risk profile is significantly lower compared to
    Multitude´s consumer lending segment "ferratum" and is hence
    diversifying the business. Thanks to a business model that is similar
    (consumer lending) but different (risk profiles), we see certain synergy
    potentials, especially in the field of (1) referrals/product
    cooperations, (2) joint development projects and (3) cross-selling.
    Still, for now the acquisition is only a financial investment that is
    not being consolidated.

  * Attractive financial profile. With a loan book of c. EUR 587m (as of H1´24
    mainly financed with customer deposits at moderate interest rates), Lea
    Bank should generate some EUR 48m in net interest income and EUR 55m in
    total income in FY24e (assuming similar sequential growth as in H1),
    while provision for loan losses should amount to only c. EUR 30m, due to
    the relatively low risk profile, with low default rates. The lean cost
    structure, should allow Lea Bank to achieve an EBT of EUR 7-8m that could
    result in a nice dividend. In light of the profitable, growing business
    model with a lower risk profile, the paid valuation of c. 13x PE´24e is
    appropriate in our view.

Apart from that, Multitude is seen to be fully on track to come close to its
EBIT guidance of EUR 67.5m (vs eNuW: EUR 61.4m), thanks to moderate growth
especially in the SME and Wholesale banking segment, further improved risk
management visible in declining impairments and ongoing tight cost control
resulting in stable OPEX.

As the stock still is undebatable cheap for a growing, highly profitable,
resilient and dividend paying company, trading at only 4x PE´25, we
reiterate BUY with an unchanged PT of EUR 12 PT, based on our residual income
model. With that, Multitude remains one of our NuWays Alpha picks.

You can download the research here: http://www.more-ir.de/d/31041.pdf
For additional information visit our website: www.nuways-ag.com/research

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss
bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben
analysierten Unternehmen befinden sich in der vollständigen Analyse.
++++++++++

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2007335 14.10.2024 CET/CEST

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