FinLab AG

02.05.2018 - Equity Research Report (english) // buy

Research Report (Anno) - FinLab AG - english

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Unternehmen: FinLab AG
ISIN: DE0001218063
Branche: Finanzen-Beteiligungen
Rating: buy
Kurs bei Erstellung in €: 21,50
Kursziel in €: 30,65
Mögl. Interessenskonflikt gem. §34b Abs.1 WpHG und FinAnv: 5a;6a;11

Further expansion in the fintech investment portfolio; NAV climbs to EUR 20.83 per share; further valuation potential yet to come

In the past financial year 2017, FinLab AG once again benefited from an increase in the valuation of its fintech investments, allowing it to sustain its significant financial result of EUR 13.00 million (previous year: EUR 11.77 million). This total includes the valuation income from unlisted fintech investments. As in the previous year, a large proportion of the financial result is attributable to the increase in value of the Deposit Solutions investment. During a USD 20 million financing round, this associated company was valued at double the level recorded at the end of 2016 (as a result of third-party investment).

In addition to the high financial result, the listed investment in HELIAD Equity Partners, in which FinLab AG has a significant stake (45.2%), posted very good growth. In 2017, the HELIAD share price of EUR 5.71 (31/12/2016) climbed significantly to EUR 9.48 (31/12/2017), which meant that given its virtually unchanged shareholding, FinLab AG recorded a total gain of EUR 16.55 million. Although this gain is not recognised in the financial result, it is recognised as a result-neutral revaluation basis in equity capital, which entails a corresponding increase in equity capital and thus in the NAV.

The positive post-tax result of EUR 14.21 million, together with the revaluation reserve of the Heliad investment (EUR 16.55 million) and the capital increase undertaken in May 2017 (EUR 5.85 million: 450,000 new shares at EUR 13.00 per share), made for a significant increase in equity capital to EUR 103.92 million (31/12/16: EUR 67.14 million). The NAV per share once again saw a significant increase to EUR 20.83 (31/12/16: EUR 14.79).

FinLab AG is special in that current income (service income, profit shares) is sufficient to cover the ongoing costs, which renders FinLab’s business virtually “self-sustaining” without external financing. This can be seen from the positive EBIT of EUR 1.46 million, which gives an indication of the strong internal financing capability within FinLab AG – this is not considered the norm for venture capital portfolio companies.

In the past financial year, FinLab AG has expanded its investment portfolio with three further investments, acquiring initial stakes in FastBill GmbH, Vaultoro Ltd. and ICONIQ Lab GmbH. At the same time, the Company has successfully completed its entry into the cryptocurrency and blockchain markets. In this regard, it recently announced the creation of a fund with leading blockchain software EOS.IO. With a planned capitalisation of up to USD 100 million, FinLab is expected to benefit from both management fees and the fund’s performance. In addition, all key fintech investments reached important milestones in 2017.

Based on the NAV valuation, we calculated a fair value of EUR 30.65 per share for FinLab AG. This figure includes the hidden reserves of the HELIAD investment as well as the higher valuations we have calculated for fintech investments. Based on a share price of EUR 20.70, we are assigning a BUY rating.


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