Original-Research

FinTech Group AG (von GBC AG): BUY

Original-Research: FinTech Group AG - von GBC AG

Einstufung von GBC AG zu FinTech Group AG

Unternehmen: FinTech Group AG

ISIN: DE0005249601

Anlass der Studie: Research Report (Initial Coverage)

Empfehlung: BUY

seit: 07.12.2015

Kursziel: EUR 26.85

Letzte Ratingänderung: -

Analyst: Felix Gode, CFA

* With the acquisition of XCOM AG, including its wholly-owned subsidiary

biw Bank AG, the FinTech Group AG has significantly expanded its business

model and can now benefit at various different levels from the strong

growth in the FinTech market. ViTrade AG and flatex AG provide established

access to end customers (B2C) and the full-service banks biw Bank AG and

XCOM AG have a strong IT capability in B2B services to the financial

services industry.

* Future growth at the company will receive equal support from all sectors.

B2C business at flatex should increase its 'share of wallet' through the

provision of additional services. flatex will also grow through acquiring a

few thousand new customers per month due to improved marketing. biw Bank AG

is one of the leading enablers in the German fintech sector thanks to its

white label banking solutions. XCOM is acquiring customers in both the

traditional banking and the financial services sectors and is contributing

innovative products to the Group such as 'kesh' payment solutions. In

addition to organic growth, management is also constantly on the lookout

for interesting acquisitions, which would have a synergistic effect on the

Group.

* Due to the acquisition of XCOM AG and, thus, biw Bank AG, the sale of the

Aktionärsbank AG is currently going ahead. This will not only simplify and

focus the existing structure but will also have a significant impact on

earnings. Aktionärsbank only started operating in late 2013 and is

currently contributing significant losses. The sale should improve results

significantly starting in 2016. Beyond Aktionärsbank, significant cost

synergies across the entire group will result from the XCOM acquisition,

which will gradually make a significant improvement to profitability.

* Not least, in FY 2015 FinTech Group AG benefited from a co-operation with

Commerzbank AG, in which CFD market making was outsourced to the latter. As

part of the process, FinTech AG received a one-off lump sum in the low

two-digit millions and will receive a share of profits over future years.

* FinTech Group AG will therefore see a significant improvement in net

sales (net interest income + net commission income + trading profit) and in

EBITDA as soon as FY2015 due to the takeover of XCOM AG, as already

illustrated in HY1 2015. Semi-annual EBITDA was EUR11.7 million. After net

sales of EUR24.6 million in FY 2014, we forecast EUR84.23 million for the whole

of 2015.

* Currently the customer deposits at biw Bank AG of more than EUR1 billion

remain completely unused. Starting in 2016, the Executive Board is planning

to set up a technology-based consumer lending department (comparable to the

listed fintech company Ferratum). Even if regulatory limits prevent all

customer deposits from being used for this business, it is realistic to

expect interest income of around 1-2% on the entire deposits.

* In summary, the FinTech Group AG in its new form, including the synergies

from the XCOM acquisition, has high growth and earnings potential which

should be able to be gradually increased over future years due to its

excellent positioning in both the B2C and B2B sectors, due to its

technological leadership and, not least, the very high deposit levels at

biw Bank AG. A significant increase in profitability should be seen as

early as 2015, with further significant potential for increases over future

years.

* Using a residual income model and a peer group model, we have calculat-ed

an average fair value of EUR26.85 per FinTech Group share. Based on the

current price level, the share will have a PE of 14 for 2017. Based on the

favourable valuation and the positive outlook for the company, we are

rat-ing FinTech Group AG as a BUY.

Die vollständige Analyse können Sie hier downloaden:

http://www.more-ir.de/d/13445.pdf

Kontakt für Rückfragen

Jörg Grunwald

Vorstand

GBC AG

Halderstraße 27

86150 Augsburg

0821 / 241133 0

[e-mail]

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Offenlegung möglicher Interessenskonflikte nach §34b Abs. 1 WpHG und FinAnV Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,5b,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter:

http://www.gbc-ag.de/de/Offenlegung.htm

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Rating: BUY
Analyst: GBC