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Hudya AB (“Hudya” or “the Company”) is a rapidly growing digital platform for everyday services such as telecom, electricity, insurance and banking services. Founded in 2016, the Company has quickly shown success and has established operations in Norway, Sweden and Denmark with revenues of approx. 185 MNOK in 2018. The focus today is to grow organically through new platform users and through cross-sales between verticals. So far Hudya has also made multiple acquisitions and Analyst Group believes that the Company can continue to grow both organically and through new acquisitions. Based on an organic revenue forecast, increased margins and applied target multiple, a valuation of 18 NOK per share is derived in a Base scenario.
Hudya operates in a variety of markets, both in markets for digital systems and payments but also within different verticals such as electricity, telecom, banking and insurance. The market for digital payments is estimated to grow at 18% CAGR between 2018 and 2023. Another market that is growing is digital insurance, which has a forecasted CAGR of 13.7% between 2018 and 2023. The Nordic insurance market (excluding life insurance) is also projected to grow in the upcoming years, performing a CAGR of 4% between 2015 and 2025. In conclusion, these market trends allow Hudya to prosper in the upcoming years, where Analyst Group believe that the Company is well positioned to capitalize on current trends within the market.
The Company’s strategy has been to grow both organically and through an aggressive acquisition strategy. By integrating acquisitions into the platform, and by having attractive offerings, Hudya generates cross-sales on the platform between the vertical offerings. Depending on which customer vertical, Hudya obtains a combination of commissions and recurring revenues. The monthly payments by users on the platform, e.g. via the telecom and power vertical, generates recurring revenues, something that drives a higher valuation of the Company. Furthermore, Hudya is estimated to have the capacity to perform multiple acquisitions in the upcoming years.
Hudya strives to have competitive offerings in all their verticals. Within insurance, Hudya offers close to the lowest price on the market through their partner, Frende Forsikring. The Company position themselves as a cost-effective and transparent alternative to other brands, which could potentially attract new customers. The Hudya Company Aconto, which is one of Norway’s leading companies within refinancing and restructuring of loans, offers on average 4% lower interest rates than competitors with twice the customer satisfaction, according to Hudya. The offering on electricity is also in the low end of market prices. These customer advantages can both attract new customers as well as create incentives for established customers to continue with the Hudya system, which could generate further cross-sales.
With a digital platform with a focus on building customer relationships in an ever more digital world, Hudya is well positioned to grow and to perform well organically via the Company’s current business verticals, as well as via additional strategic acquisitions in the upcoming years.
- At this stage Hudya has proven success on the Norwegian market, and Hudya believes that it is possible to replicate this success also on the Swedish and Danish markets, where Hudya will be launching a broader part of the platform during 2020.
- The services offered by Hudya represent a large share of wallet for all consumers, and it is possible to generate good results even with small market shares due to both these high volumes and the high level of digitization that allows low costs to render the services.
- Investing in a listed company as Hudya makes it possible for the investor to participate in a potential growth journey based upon the general fintech growth-rate expected by many analysts. There are few fintech companies that are listed at the moment.