B2Holding (Buy, TP: NOK15.00) - Change of pace
We expect Q2 EPS of NOK0.21, driven by continued growth in gross collections, more than offset by increasing amortisation. We reiterate our BUY, but have cut our target price to NOK15 (18) after reducing our 2020–2021e EPS by 10%. This is a result of a 5% cut in our gross collections estimates as it looks increasingly unlikely B2Holding will meet its ERC guidance. This is due to difficulties in secured collections and uncertainty after the CEO’s departure. We still find the stock attractively valued at a 2020e P/E of 5.3x, even after taking a more cautious approach in our estimates.B2holding ASA. B2holding ASA is a Norway-based company, which is primarily focused on the financial services industry. The Company operates as a provider of debt solutions for banks and institutional vendors. The Company operates in five segments, namely: Debt Purchase, Debt Collection, Credit Information, Third Party Debt Collection, Consumer Lending. The Debt Purchase segment is involved in the purchasing debt portfolios, in particular Non-performing loans (NPLs). The Debt Collection segment provides optimal collections through amicable solutions or legal processes. The Credit Information segment offers credit information as a service through Creditreform in Latvia. The Third Party Debt Collection offers collection of debt on behalf of customers. The Consumer Lending segment provides lending services. The Company operates on Danish market through Nordic Debt Collection A/S (Nodeco), as well as owns a majority stake in Spanish entity Confirmacionde Solicitudes de Credito Verifica.
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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