Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Victor Galliano is an experienced equity banks analyst, having covered Latin America banks and non-bank financials for over 12 years, as well as more recently covering the Italian banks. He has worked in sell side equity research for 30 years in a career spanning Barclays, HSBC, BBVA LatInvest, Barings and NatWest.
Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.
The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Financials & FinTech research

Square (SQ US) & Afterpay (APT AX): Is the Price Right?

Payment Companies – Focus on Value and Growth

Payments: Momentum Driving MercadoLibre Now; PayPal & PagSeguro Attractive on Growth & Fundamentals

Nexi SpA (NEXI IM): The Nets Purchase Is a Good Deal... I See a Rerate in Short and Longer Term

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nexi-spa" target="_blank" data-smartkarma-citation="entities:28921:1" rel="noopener">Nexi SpA (NEXI IM)</a>’s offer for Nets makes it a leading player in the European payments, broadening and deepening its footprint in Europe ex-Italy, including the Nordics and Eastern Europe</li>
<li>Its key growth drivers are increased scale, in a largely fixed cost business, and the potential for synergies</li>
<li>Also the pandemic-driven switch from cash to digital payments throughout Europe adds to the growth prospects</li>
<li>Looking at past acquisitions in the sector, the price paid for Nets is no bargain, but there is clear potential for premium EBITDA margin improvements, from synergies and greater scale</li>
<li>In addition, in this all paper deal for Nets there are lock-up periods for core shareholders ranging from 6 to 24 months</li>
<li>We estimate that the merged Nexi-SIA-Nets trades on EV/EBITDA multiples of 20.9x for 2020E, 19.3x for 2021E and 17.5x for 2022E, and that our EBITDA estimates are conservative</li>
<li>Risks to our view include increased pricing competition from core payments competitors, as well as new entrants, along with potential regulatory constraints being placed on the SIA deal, following the announcement of the Nets acquisition</li>
</ul>



Nexi SpA (NEXI IM)’s offer for Nets makes it a leading player in the European payments, broadening and deepening its footprint in Europe ex-Italy, including the Nordics and Eastern Europe
Its key growth drivers are increased scale, in a largely fixed cost business, and the potential for synergies
Also the pandemic-driven switch from cash to digital payments throughout Europe adds to the growth prospects
Looking at past acquisitions in the sector, the price paid for Nets is no bargain, but there is clear potential for premium EBITDA margin improvements, from synergies and greater scale
In addition, in this all paper deal for Nets there are lock-up periods for core shareholders ranging from 6 to 24 months
We estimate that the merged Nexi-SIA-Nets trades on EV/EBITDA multiples of 20.9x for 2020E, 19.3x for 2021E and 17.5x for 2022E, and that our EBITDA estimates are conservative
Risks to our view include increased pricing competition from core payments competitors, as well as new entrants, along with potential regulatory constraints being placed on the SIA deal, following the announcement of the Nets acquisition


Nexi’s (NEXI IM) Offer for Nets; From National to European Payments Champion