B2Holding (Buy, TP: NOK9.50) - Unsecured holding up well
We expect Q4 EPS of NOK0.3, helped by robust unsecured collection trends, with support from a low amortisation rate and continued cost-saving measures. The financial risk is gradually abating, as the company is continuing to curb front-book investments, and we consider B2Holding well-positioned for a gradual investment ramp-up over the coming years. We reiterate our BUY and have increased our target price to NOK9.5 (8.5) on the back of our raised earnings estimates for 2021–2022. Our target price implies a 2021e P/E of ~9.5x, and we continue to recognise the meaningful upside potential to our estimates should B2Holding deliver on its back-book collection curves.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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