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UBS initiated coverage on Qualco Group SA (QLCO:GA) with a Neutral rating and a price target of EUR6.50 on Thursday. The financial services firm cited the company’s "scalable, asset-light and highly recurring revenue model with a sticky customer base" as key strengths.
Qualco provides services and solutions to the credit and receivables management industry, offering software platforms that help manage customer credit and debt portfolios along with portfolio management and debt servicing solutions. UBS projects approximately 13% mid-term revenue compound annual growth rate for the company.
The research firm highlighted Qualco’s unique value proposition in integrating receivables management and securitization, pointing to the recent joint venture with PPC, Greece’s largest electricity supplier, as an example of this strategy in action.
UBS expressed caution regarding Qualco’s margin improvement potential, noting it would "like to see more evidence that margins can improve in the mid-term." The firm also identified "some execution risk around the international expansion strategy" as a concern.
The company’s business model features recurring revenue streams and customer retention characteristics that support UBS’s growth projections, though these positive factors are balanced against the noted execution and margin concerns reflected in the Neutral rating.
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