Original-Research: Multitude SE (von NuWays AG): Buy

Classification of NuWays AG to Multitude SE

Company Name:	Multitude SE
ISIN:	CH1398992755
Reason for the research:	Update
Recommendation:	Buy
from:	11.03.2025
Target price:	EUR 12.00
Target price on sight of:	12 months
Last rating change:
Analyst:	Frederik Jarchow

Bond successfully placed // Stake in Lea Bank increased; chg

Topic: Last week, Multitude announced to have successfully placed a € 25m Tier 2 bond via its subsidiary Multitude bank. Multitude has also further increased its stake in Lea Bank to 20.9% (initial stake was 9.9%). In detail:

Tier 2 bond placement to strengthen capital base and to fulfil Tier 2 capital requirements. The conditions (pricing of 99% of the aggregate principal amount and a coupon of 3 months EURIBOR plus 11.00% p.a.) are not exactly favorable, as it is the first bond with that size placed via Multitude bank but should improve with future potential bond placements through Multitude bank. Importantly, the proceeds strengthen the capital base of the bank and give the Group more flexibility when it comes to growth and seizing attractive opportunities.

Higher stake in Lea Bank makes future cooperations more likely. After the approval from the Swedish Financial Authority, Multitude Bank increased its stake in Lea Bank to 20.9%, by executing another five share purchase agreements. With that Multitude Bank strengthens its strategic foothold in the Nordic consumer finance market and execute on its long-term growth strategy through organic expansion, partnerships, and acquisitions. Further, it increases synergy potentials, such as 1) referrals/product cooperations, (2) joint development projects and (3) cross-selling between both banks. Still, for now the acquisition is only a financial investment that is expected to be partially consolidated. Importantly potential revenues from Lea bank (via dividends/consolidation) are not reflected in the guidance.

Looking at current trading (not considering direct positive effects from Lea Bank), we see Multitude fully on track to achieve its guidance: We expect moderate yoy growth on both top and bottom line (eNuW for Q1´25: € 71m sales and € 5.2m net income). That said, the Group's net income (including contributions from Lea Bank) should come in clearly above the guidance for FY25 of € 23m. Tailwinds are seen to come from lowering interest expenses for customer deposits that should have peaked in Q3´24.

Given that the company is still trading at 4.8x PE´25, despite the strong growth, the resilience and the positive outlook, we reiterate BUY with an unchanged PT of € 12, based on our residual income model. Multitude remains a NuWays Alpha pick.

You can download the research here: http://www.more-ir.de/d/31944.pdf
For additional information visit our website: https://www.nuways-ag.com/research-feed

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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