SRH AlsterResearch AG Initiation: Multitude SE - Transforming to high quality business

Multitude SE (Initiation) Financial Services MCap EUR 105m BUY, PT EUR 10.00 (+105% potential) Research update Multitude SE (renamed in 2021; former Ferratum Oyj) is an international fintech company engaged primarily in providing digital lending and mobile banking services. We believe Multitude’s increased focus on low-yield high-value consumer and SME lending business should help it lower credit risk, improve asset quality and reduce earnings volatility. Its recently introduced mobile wallet app, SweepBank, will provide the company with additional opportunity for cross-selling, cheaper and effective marketing, and customer acquisition. SweepBank will act as a base to transition the company into a financial platform provider, offering it significant revenue potential, while improving its risk profile. Margins will expand, supported by increasing revenues and lower impairment losses as the company moves away from risky loans and geographies. Multitude has a solid cash position on its balance sheet to fund loan growth. We use a DCF valuation to arrive at our target price of EUR 10.0, which offers some 105% potential upside. We initiate coverage of Multitude with a BUY recommendation. For 5 current investment ideas, check our Weekly Screener. This week we are looking for stocks that provide safety in times of uncertainty and volatile markets. Please note that AlsterResearch publishes MiFID II compliant research only. For a detailed discussion on MiFID II, please visit https://www.research-hub.de