January 6th, 2021 | 09:05 CET
Lang & Schwarz, wallstreet:online, Commerzbank - Explosive Growth: License to Print Money
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"[...] The mere fact that we have to write off around EUR 5 million shows that mistakes were made. We have to admit this quite openly to ourselves. [...]" André Kolbinger, CEO, Smartbroker Holding AG
Lang & Schwarz AG - exceptional numbers
Lang & Schwarz AG is the listed holding Company of two operating subsidiaries. AG's core business is the development and issuance of derivative financial instruments under its name. These are, in particular, leverage products and theme certificates, including the well-known wikifolio certificates. The various products are offered by the subsidiary Lang & Schwarz TradeCenter over the counter via its platform LS-X and on-exchange at certain trading venues. TradeCenter accounts for the bulk of the business volume. The second subsidiary, Lang & Schwarz Broker, provides IT hardware and software services internally and for third parties.
Through more than 20 affiliated partner banks, Lang & Schwarz reaches around 15 million private customers. With longer trading hours during the week and trading on weekends, the LS-X trading venue has established itself as the number three in Germany (on-exchange and off-exchange) for private customers.
The day before yesterday, the Group reported excellent numbers. In the fourth quarter of 2020, a result from trading activities (net interest income plus net commission income and net trading income) of EUR 28 million was achieved! A year earlier, the figure was EUR 5 million. For the year as a whole, Lang & Schwarz generated a profit of EUR 82 million from trading activities, up from EUR 18 million! This result reflects an enormously high number of orders. The number of trades increased from 5 million to 27 million last year, tripling turnover to EUR 78 billion compared to the previous year. Of course, one cannot extrapolate the past linearly. But given EUR 82 million earnings in 2020 and favourable conditions, the Company's current stock market value of 230 million is not too high.
WALLSTREET:ONLINE AG - unrecognized potential
wallstreet:online AG is the largest publisher-independent financial portal operator in the German-speaking world and operates a sizeable financial community. Since the end of 2019, the Company has been on the market with Smartbroker, a so-called Neo Broker, and is experiencing strong growth.
Neo brokers are providers that attract many customers with very low and sometimes even no trading fees. A few years ago, Robinhood started this trend in the USA, which has also caught the German stock exchange landscape.
Smartbroker stands out from the Group of neo-brokers because, in addition to its low conditions, it offers a wide range of products. Smartbroker has increasingly made it to the front rank in provider comparisons with this differentiating feature in recent months. The declared goal of Smartbroker, in which the Group holds a stake of around 70%, was to expand its customer base to 150,000 by year-end 2020. In total, the broker managed assets of over EUR 2 billion at the end of 2020.
In the medium term, the rapidly growing transaction business of Smartbroker will replace wallstreet:online's established core business of advertising. In the future, the option of trading via Smartbroker is to be integrated into the high-reach portals. An App is also to be launched in 2021, which should continue the enormous growth of Smartbroker and lead the share to new highs.
COMMERZBANK AG - Turnaround 2021?
The day before yesterday, CEO Knof, who has only been in the job for a few weeks, informed Commerzbank employees about upcoming developments. The bank suffers from too high costs and a lack of profile. "The core of the strategy will be to make the bank more profitable in the long term. Only if we succeed in doing that will we be able to shape our future," Knof said.
The Group will present the details of the new roadmap in the first quarter, probably in mid-February. It also dampened expectations of quick successes and raised the prospect of a quarterly loss. At the end of December, the bank had reported plans to cut a further 2,300 jobs.
Depending on the strategy formulated and the rapid return to profitability, Commerzbank could become an attractive turnaround candidate this year.
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