Credit Suisse starts Network International at 'outperform'
By Michele Maatouk
Date: Friday 10 Sep 2021
(Sharecast News) - Credit Suisse initiated coverage of MEA-focused payments service provider Network International on Friday with an 'outperform' rating and 460p price target.
"With FinTech investment beginning to take hold in Africa ($1.3bn in 2020), we believe foreign investment in financial infrastructure following the pandemic will generate a 'tipping point' for financial services adoption, benefitting Network International," CS said.
The bank said that with exposure to a large and high-growth total addressable market, NETW has exposure to a preferred payments swimlane.
"MEA carded volume grew circa 3x personal consumption expenditure from 2017-19 (15% compound annual growth rate)," CS noted.
"Card penetration in the MEA region is low (c30% vs North America at c63%). Specifically, Sub-Saharan Africa presents an immense opportunity, where Africa's largest economy (Nigeria) still has 85% cash usage.
"Our detailed analysis of MEA carded market volume growth implies NETW organic net total processed volume (TPV) wins (less churn) do not have to return to 2019 levels until 2024E to meet our estimates."
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