Axactor (Buy, TP: NOK5.00) - Wheels set to start turning in 2018
Axactor’s Q4 report showed a solid increase in revenues, with gross collection on its own NPLs up 57% QOQ, while higher than expected costs and some negative one-offs made the bottom line miss consensus expectations. We have updated our collection forecast with Axactor’s latest collection profile, which tilts collection towards year 2, and have thus cut our 2018e EPS by 9%, while our 2019e is raised 5% and 2020e is raised 4%. We reiterate our BUY recommendation and NOK5 target price and believe that a gradual improvement in the reported numbers over the course of 2018 could trigger a share price appreciation.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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