PEXA Group "Pricing picked IPART" (Neutral) Chidgey

研报英文原文证据摘录

PEXA Group "Pricing picked IPART" (Neutral) Chidgey

Forecast returns

Forecast price appreciation 14.8%

Forecast dividend yield 0.0%

Forecast stock return 14.8%

Market return assumption 9.6%

Forecast excess return 5.2%

Company Description

PEXA operates the leading digital property settlement platform in Australia, handling

property transfer and refinancing transactions. PEXA Exchange Australia Ltd (PEAL) was

established in 2010 in response to the addition of e-conveyancing to the Council of Australian

Governments agenda for deregulation priorities. In 2019, Morgan Stanley Infrastructure

Partners, CBA and Link Group acquired 100% of PEAL through the acquisition vehicle of

PEXA Group Limited. PEXA's operates under three key business areas: PEXA Exchange; PEXA

International; and PEXA Digital Growth (PDG).

Valuation Method and Risk Statement

Our price target is based on a blend of DCF & PE Rel valuations. The key risk to PEXA’s

earnings is a downturn in housing market transaction & mortgage refinancing activities. In

the current macro-economic environment rising rates could have an impact on mortgage

refinancing volumes, and a subsequent impact on PEXA’s revenues. PEXA’s continued

success in the domestic Australian market is also significantly dependent on government

regulation of the e-conveyancing industry. Tightening of Competition related laws, alongside

interoperability, could potentially impact PEXA’s share of the domestic market. For the

success of its PEXA International growth program, PEXA will also rely on the support of UK

regulators such as the HMLR and the Bank of England. Regulator disinterest in promoting e-

conveyancing, or the event of them providing support to one of PEXA’s competitors could

have a detrimental impact on PEXA’s International success.