eResearch Updated Analyst Coverage on Peak eResearch Updated Analyst Coverage on Peak Increasing Price Target to C$11
NASDAQ Listing & $100M Sales Guidance Fuels Peak’s H2/21
(All amounts expressed are in Canadian dollars)
Investment Highlights:
NASDAQ listing imminent.
Peak’s management believes that the NASDAQ listing will attract new tech-centric institutional shareholders. It expects the shares to begin trading on the NASDAQ soon.
Closes $52.6 million financing.
The Company believes the financing will “unlock” new expansion and partnership opportunities, and new revenue streams, both inside and outside of China.
Releases Revenue & EBITDA guidance.
It forecasts revenue of $104 million in 2021 with EBITDA of $12.5 million, ramping up to $624 million of revenue in 2023 with EBITDA of $155 million.
Model impacts.
Due to the lower Q1/2021 revenue results, eResearch has reduced its 2021 revenue estimate to $81.5M from $86.1M. Incorporating Peak’s recent guidance, eResearch has significantly increased its 2022 revenue estimate to $258.2M from $103.6M and $516.3M from $113.9M in 2023, approximately 85% and 83% of Peak’s guidance, respectively.
Share Consolidation.
The share count has been adjusted to accommodate the 1-for-2 share consolidation that took effect on July 27.
Financial Analysis & Valuation:
The revised revenue and EBITDA estimates for 2021-2023 are:
2021: Revenue $81.5 million; EBITDA $9.4 million;
2022: Revenue $258.2 million; EBITDA $47.6 million;
2023: Revenue $516.3 million; EBITDA $95.8 million.
To reflect increased confidence in the business, eResearch has raised its revenue multiple to 5x from 4x, increased the EBITDA multiple to 12x from 10x, and raised the DCF terminal EBITDA multiple to 12x from 10x. eResearch estimates an equal-weighted price per share target of $11.30.
eResearch has increased its one-year target price for Peak to $11.00 from $4.80 and is maintaining a Speculative Buy rating.
The pdf version of the report could be downloaded HERE
About Peak Fintech Group Inc.:
Peak Fintech Group Inc. is the parent company of a group of innovative financial technology (Fintech) subsidiaries operating in China's commercial lending industry. Peak's subsidiaries use technology, analytics and artificial intelligence to create an ecosystem of lenders, borrowers and other participants in China's commercial lending space where lending operations are conducted rapidly, safely, efficiently and with the utmost transparency. For more information:
https://www.peakfintechgroup.com
For more information, please contact:
CHF Capital Markets
Cathy Hume, CEO
416-868-1079 ext.: 251
cathy@chfir.com
MZ Group - MZ North America
Mark Schwalenberg, CFA
1-312-261-6430
PEAK@mzgroup.us
Peak Fintech Group
Barry Ellison, Director of Marketing and Communications
514-340-7775 ext.: 521
bellison@peakfintechgroup.com
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Forward-Looking Statements / Information:
This news release may include certain forward-looking information, including statements relating to business and operating strategies, plans and prospects for revenue growth, using words including "anticipate", "believe", "could", "expect", "intend", "may", "plan", "potential", "project", "seek", "should", "will", "would" and similar expressions, which are intended to identify a number of these forward-looking statements. Forward-looking information reflects current views with respect to current events and is not a guarantee of future performance and is subject to risks, uncertainties and assumptions. The Company undertakes no obligation to publicly update or review any forward-looking information contained in this news release, except as may be required by applicable laws, rules and regulations. Readers are urged to consider these factors carefully in evaluating any forward-looking information.