Axactor (Buy, TP: NOK5.00) - Focus tilting towards secured debt
After investing ~EUR55m in secured and Real Estate Owned NPLs and guiding for further similar investments, Axactor is increasing diversification and shifting its focus to a new growth area. Management also used the Q3 presentation to highlight its view that the cost base is highly scalable, indicating potential for improved margins. The Q3 results were a little soft, driven by small misses at most P&L lines. We have made negligible changes to our 2018–2019e EPS, and keep our BUY recommendation and NOK5 target price.Axactor AB (publ), formerly known as Nickel Mountain Group publ AB, is a Sweden-based company, which is primarily involved in the credit management service industry. The Company is focused on non-performing loan (NPL) sector that includes credit card debt, private leasing, residual mortgages, consumer loans, mortgages, secured loans with collateral, small business loans, among others. The Company is active within the debt purchase and debt collection area. It specializes in the amicable collection, legal collection, surveillance and recovery services. Axactor AB (publ) operates through its wholly owned subsidiary ALD Abogados SL, which is a Spain-based legal debt collection platform. The Company has a portfolio pipeline in Spain, Germany and Italy, among others.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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