Equity Analysis /
Australia

AU : Mainstream Group - Another strong quarter

    Steven Sassine
    Steven Sassine

    Research Associate

    Follow
    Richard Coles
    Richard Coles

    Financials - Equity Research

    Follow
    CGS-CIMB
    18 January 2021
    Published byCGS-CIMB

    MAI has released its 2Q21 FUA update to the market. It was another strong quarter in our view, with FUA rising 7% (+~A$14bn) on the previous quarter to ~A$225bn (MorgansE A$224bn). Continued growth in funds under custody (+36% qoq) to over A$16bn and the Quoted Funds product almost broadly doubling the investors serviced by MAI were two key highlights of the update. We lift our FY21F/FY22F cash EPS by 1%-2% on a slight increase to our near term FUA assumptions. Our PT rises to A$1.14. Trading on ~11.5x FY21F underlying EV/EBITDA (MorgansE), we continue to see MAI’s valuation as undemanding given its strong growth profile. Add maintained.