Swissquote released this morning a report which confirms management’s previous communication regarding the sharp increase in trading at the beginning of the year. Total revenues for H1 20 are indeed 40% higher yoy and pre-tax profit is up by more than 120% yoy. The share price is up about 12%.

Management had already used quite an optimistic tone in March 2020 (release of FY2019) as it expected revenues and net profit for 2020 to be more than 10% higher yoy.

The higher figures are mainly the result of market volatility which could therefore abate in H2 20. However, the sharp inflow of new clients is more interesting and could make the increase in revenues (and profit) more sustainable.

As we wrote at the end of April 2020, Swissquote opened indeed about 1,000 accounts per week in January and February and even 4,000 in March vs 500 per week in “normal” times (for information, even though not as high as in March, new accounts in April and May have been dynamic).
Following this set of developments, we increased at that time our EPS for 2020 with expectations above management’s guidance (sales +15% and profit +18% yoy).

According to the report, management will update its 2020 target when the H1 20 figures are formally released on 11 August 2020. We expect an increase in the previous guidance for 2020 and, more importantly, we are hopeful management will update us regarding the 2022 guidance.
Our current EPS for 2022 is in line with guidance but, given the latest tailwinds, we will adjust these up.

On top of recent developments, the ongoing integration of InternaxX will positively impact Swissquote’s revenues. We are confident indeed that Swissquote will manage to leverage InternaxX’s current client basis as well as using this subsidiary to develop throughout the European Union.

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