Last close As at 06/08/2026
—
— 0.00 (0.00%)
Market capitalisation
—
Research: Financials
FinLab’s results combine relatively stable income from management fees and dividends received from the asset management subsidiaries, Heliad and Patriarch (total income at €1.76m vs €1.88m in H116), and sizeable revaluation gains (Kapilendo, Heliad) of €2.52m (vs -€0.3m in H116). The recent share issue and improved operating cash flow increased the company’s net cash position to €4.28m from €0.97m at end-2016. This puts FinLab in a strong position to execute further fintech investments. Following the recent positive share price performance, FinLab’s shares trade at an 18.9% premium to last reported NAV.
FinLab |
NAV boosted by revaluation gains
Financials |
Scale research report - Update
15 September 2017 |
Share price graph
Share details
Business description
Bull
Bear
Analysts
|
||||||||||||||||||||||||||||||
FinLab’s results combine relatively stable income from management fees and dividends received from the asset management subsidiaries, Heliad and Patriarch (total income at €1.76m vs €1.88m in H116), and sizeable revaluation gains (Kapilendo, Heliad) of €2.52m (vs -€0.3m in H116). The recent share issue and improved operating cash flow increased the company’s net cash position to €4.28m from €0.97m at end-2016. This puts FinLab in a strong position to execute further fintech investments. Following the recent positive share price performance, FinLab’s shares trade at an 18.9% premium to last reported NAV.
Bottom line assisted by write-ups
FinLab reported a pre-tax profit of €3.03m in H117, significantly above the H116 figure (€0.50m). This was largely due to positive revaluations on the company’s portfolio holdings (€2.52m compared to write-downs of €0.3m in H116), in particular Kapilendo and Heliad Equity Partners. A 33.8% y-o-y increase in income from investments to €0.67m and higher income from the sale of securities and financial assets (up 46.2% y-o-y to €0.73m in H117) also boosted profits. Diluted EPS came in at €0.63 vs €0.09 despite the higher average share count.
Recent capital increase fuels portfolio expansion
In May 2017, the company raised €5.85m issuing 450,000 new shares at a price of €13.00 per share. The proceeds will be used to make further investments in early-stage companies, as FinLab targets a portfolio of seven to 10 fintech investments. In addition to the four investments held at end-2016 (nextmarkets, Deposit Solutions, Kapilendo and Authada), the company recently entered into two, seven-figure euro investments in FastBill, a leading German SaaS tool for small business financial management, and Vaultoro, a real-time bitcoin gold exchange.
Valuation: Shares trading at a premium to NAV
FinLab’s NAV at end-June amounted to €16.13, an increase of 7.2% from end-March (€15.04) and a 9.1% rise compared to end-2016 (€14.79).The current share price stands at €19.18, implying an 18.9% premium to the last reported NAV. This may reflect market expectation of continued investments in NAV and earnings-accretive acquisitions. If we assume that the major portfolio holding, Heliad Equity Partners, trades in line with NAV (vs a discount of 26.0% at end-June), the premium is reduced to c 5%.
|
Historicals financials
Source: Insert source here. |
Edison Investment Research provides qualitative research coverage on companies in the Deutsche Börse Scale segment in accordance with section 36 subsection 3 of the General Terms and Conditions of Deutsche Börse AG for the Regulated Unofficial Market (Freiverkehr) on Frankfurter Wertpapierbörse (as of 1 March 2017). Two to three research reports will be produced per year. Research reports do not contain Edison analyst financial forecasts.
Financials: H117 results released
FinLab reported a considerable increase in pre-tax profit to €3.03m in H117 from €0.50m a year ago. This was largely driven by the write-ups of securities and financial assets of €2.52m (compared with -€0.3m in H116), resulting to some extent from the revaluation of Kapilendo following the capital increase and write-up of the holding in Heliad Equity Partners on the back of the solid share price performance (+18% in H117). Furthermore, the company recorded €0.73m income from the sale of securities and financial assets (up 46.2% y-o-y), with the retirement of securities and financial assets remaining broadly stable (-€0.54m vs -€0.51m in H116).
EBIT declined 57.0% y-o-y to €0.30m in H117, mostly due to a 6.6% decline in total income (€1.76m in H117) and a 23.4% y-o-y rise in operating costs, in particular a 66.7% increase in occupancy costs to €0.29m and higher personnel expenses (up 21.7% y-o-y to €0.85m in H117, largely related to options valuation under the employee stock option plan, ESOP). As a result of lower income tax (c €36,000 vs €99,000 in H116), net income improved to €3.00m from €0.40m in H116, implying a diluted EPS of €0.63 vs €0.09 a year ago. Including the change in the revaluation reserve, overall income went up to €7.6m from €0.6 in H116.
FinLab’s net cash position improved to €4.28m from €0.97m at end-2016, mostly on the back of the capital increase completed in May 2017, which provided the company with proceeds of €5.85m. Some of this was already spent on investments (€3.87m vs €1.50m last year). Operating cash flow of €1.10m in H117 (vs €0.22m in H116) further contributed to FinLab’s improvement in liquidity.
Exhibit 1: Results highlights
€000s |
H117 |
H116 |
Change |
Revenue |
760 |
990 |
(23.2) |
Income from investments |
669 |
500 |
33.8 |
Other operating income |
326 |
391 |
(16.6) |
Total income |
1,756 |
1,881 |
(6.6) |
Personnel expenses |
(852) |
(700) |
21.7 |
Non-personnel expenses |
(601) |
(477) |
26.0 |
EBIT |
303 |
704 |
(57.0) |
Financial result, of which: |
2,728 |
(203) |
N/M |
Income from the sale of securities and financial assets |
725 |
496 |
46.2 |
Retirement of securities and financial assets |
(535) |
(509) |
5.1 |
Write-ups and write-downs of securities and financial assets |
2,522 |
(274) |
N/M |
Interest and similar income |
6 |
84 |
N/M |
EBT |
3,031 |
501 |
505.0 |
Taxes on income |
(36) |
(99) |
(63.6) |
Net result for the period |
2,995 |
403 |
643.2 |
Average no. of shares (diluted) |
4,747,022 |
4,547,891 |
4.4 |
EPS (diluted, €) |
0.63 |
0.09 |
612.0 |
Overall result (including change in revaluation reserve) |
7,561 |
576 |
N/M |
Source: FinLab accounts
Valuation
FinLab’s growth is driven by its fintech activities and shareholder value should be driven by its ability to grow the NAV over time. Earnings in any given year can be less informative as the timing of revaluations and exits, which are reflected in the income statement on recognition, can be volatile.
FinLab’s NAV has grown rapidly since the company’s inception at the end of 2014 to the end of 2016 (see Exhibit 2 below) and the discount to NAV has narrowed sharply from 54% at end 2013 to 11% as at end-2016, suggesting that the change in strategic direction on the creation of FinLab has been well received by investors.
NAV per share as at end-June stood at €16.13, which represents a 7.2% increase from end-March (€15.04) and 9.1% compared to end-2016 (€14.79). The company’s share price currently stands at €19.18, which represents an 18.9% premium to last reported NAV. However, 37% of FinLab’s NAV at end-June is its holding in Heliad, which was valued at a 26.0% discount to its own NAV (the share price at end-June was €6.75 vs NAV at €9.16). While it is typical for investment companies to trade at a discount, it could be useful to consider the impact on FinLab’s NAV if Heliad’s assets were reflected at fair value (NAV). If the discount was removed, FinLab’s NAV would rise to over €90m, suggesting a premium to NAV of c 5%. Furthermore, end-June NAV does not reflect the recent seven-figure euro investment in Vaultoro and it seems that the market expects FinLab to use its cash pile to make further earnings- and value-accretive acquisitions following the recent capital increase.
|
Exhibit 2: FinLab’s share price and NAV performance |
|
|
|
|
Source: FinLab’s corporate website, Edison Investment Research |
|
|
Exhibit 2: FinLab’s share price and NAV performance |
|
|
|
|
|
|
Source: FinLab’s corporate website, Edison Investment Research |
Frankfurt +49 (0)69 78 8076 960 Schumannstrasse 34b 60325 Frankfurt Germany |
London +44 (0)20 3077 5700 280 High Holborn London, WC1V 7EE United Kingdom |
New York +1 646 653 7026 295 Madison Avenue, 18th Floor 10017, New York US |
Sydney +61 (0)2 8249 8342 Level 12, Office 1205 95 Pitt Street, Sydney NSW 2000, Australia |
|
Research: Investment Companies
Fidelity China Special Situations (FCSS) invests in a diversified portfolio of Chinese equities, seeking exposure to higher-quality companies, primarily in faster growing, consumer-orientated areas of the economy. FCSS provides actively managed exposure to the Chinese market, following a bottom-up investment approach, unconstrained by index weightings, and currently has no holdings in banks or property, which are considered to be higher-risk sectors. FCSS has achieved a 14.5% pa NAV total return since its launch in April 2010, and its performance is considerably ahead of the MSCI China index and the world market over three and five years.