MyBucks S.A.

12.07.2017 - Equity Research Report (english) // buy

Research Comment – MyBucks S.A. - english

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Unternehmen: MyBucks S.A.
ISIN: LU1404975507
Branche: Dienstleistungen
Rating: buy
Kurs bei Erstellung in €: 13,60
Kursziel in €: 27,60
Mögl. Interessenskonflikt gem. §34b Abs.1 WpHG und FinAnv: 5a;11

Reduction of the borrowing rate continues as planned; forecasts and rating confirmed

According to announcements by the company on 10 July 2017, MyBucks S.A. has taken out a loan of $5.00m. This involves a loan agreement with Africa Agriculture and Trade Investment Fund (“ATIF”) to be used to finance the agricultural loan portfolio in Mozambique and Uganda. In these countries, MyBucks provides short-term, unsecured private loans, including for agricultural purposes. In addition, the company is currently in the process of introducing a banking platform in these countries, expected to be available by the 3rd quarter of 2017. In addition to the credit platform, currently available in 11 countries in the Sub-Saharan region, this would allow MyBucks to significantly expand its financial service portfolio. The agreement with AATIF provides that additional funds of more than $5.0m can be drawn down in stages.

The raising of credit reported is to be seen as a important factor for optimising the interest-bearing capital. As of 31 December 2016, the company had interest-bearing borrowed capital of approx. €100m that, by our calculations, had an average interest rate of 20.6%. Over the previous reporting periods, MyBucks S.A. has been able to significantly reduce the interest rate on borrowed capital. According to the company, the new loans bear interest at around 11.0%, which further supports the downward trend in interest rates.

We have identified the reduction in the average interest rate as an important driver of earnings in our previous research report (see research report dated 19 June 2017). By the end of financial year 2017/2018 (FY end: 30/06/18), we expect to see a reduction to 18.0% and, in the following financial year, to 16.5%. Our forecasts are partially borne out with the raising of credit through AATIF. In line with the company strategy, additional borrowed capital at a comparatively favourable interest rate is expected to be raised in the future.

We confirm our fair value per MyBucks share of €27.60, calculated using a residual income model. Based on a share price of €13.60 (10:10 am on 10/07/17) we are maintaining our BUY rating.


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