Wesure Global Tech Ltd operates as a digital insurance company. It offers third party car, structure and contents, building, mortgage, and comprehensive insurance products. The company was founded in 2016 and is based in Kefar Sava, Israel.

Israel

Wesure Global Tech Ltd

Financial Services

The company pays dividends on rare occasions. There have only been a few years with dividend payments in the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. At the same time, the average five-year yield has been significantly higher and exceeded nearly all its peers. The company distributes nearly all its profit as dividends (payout ratio above 90%, a negative factor). It will not be easy to sustain such an extreme payout ratio. It may also indicate a company's lack of profitable growth opportunities, which suggests doubtful prospects. 

WESR.TA reported revenue of ILS 4 587mn in the last 12 months, up 21% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 59% from FY23 to ILS 0.55.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 50ppts over past six months and grown 1ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

The company has reported weak EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 7.5% in the last 12 months, up from 4.5% in FY23. 

Historically, WESR.TA has reported weak net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 1.3%, a growth from 1.0% in FY23. 

Wesure Global Tech Ltd reported a return on equity (RoE) of 9.7% in the last 12 months, up from 7.4% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 0.3% in the last 12 months, an increase from 0.2% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 0.3%, below the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.7 in the past several years. This ratio implies a good shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

WESR.TA has above average trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is relatively stable and remains favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, bleak profitability, and negligible return on capital. We note resilient historical revenue growth and low margin volatility, among the positive credit factors. 

In highly turbulent market conditions, WESR.TA is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, WESR.TA is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from large to immense. 

From both historical and forecast perspectives, the stock is considerably underpriced compared to similar stocks. In particular, the stock is underpriced on P/E, 'cheap' on EV/EBITDA, undervalued on P/FCF. 

Wesure Global Tech Ltd

ILA 491.1

4

Wesure Global Tech Ltd

ILA 491.1

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

ILA 491.1

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