B2Holding (Buy, TP: NOK11.00) - Delayed collections
Our main takeaways from the Q3 results were somewhat lower gross collections, a miss on costs, and delayed collection projections in the ERC curve, offset by lower amortisations and taxes. We have reduced our 2020e EPS by 6%, but increased 2021e by 7% as we partly factor the changed ERC curve into our estimates. While the miss on costs and gross collections in Q3 alone would mean a ~2-4% EPS estimate reduction, the positive effect from the recent NOK depreciation versus other currencies and the guidance for a lower tax rate offset much of this. We reiterate our BUY and NOK11 target price.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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