Thanks to the demand for greater security, a competitive technology, and companies as end-customer, Zwipe’s initial focus on airports and data centres has paid off – we see interest spreading and the pipeline for the access business seems robust. We expect a 14% CAGR for the access cards market in the coming 8–10 years, while penetration of biometrics will continue, and we thus believe Zwipe can take a sizeable share of sales in its chosen verticals. Given a P/S of 1.5x, 15% WACC, and a 40% likelihood that biometric cards can achieve mass market status, we value Access at NOK 5.4, with potential upside to more than NOK 13 if biometric access cards reach mass market.

…while potential for biometric payment cards is enormous but risky

The end-customers for payment cards are consumers, which we believe elevates the risk compared with access cards. The potential is huge, though. We see a 40% likelihood that biometric payment cards will hit one billion cards in the coming eight years – in line with the development of the current generation of cards. Given that it is one of few platform available certified by both Visa and Mastercard, we believe Zwipe can become a key supplier to tier 2 and 3 card producers. Given a P/S of 1.5x, 25% WACC, and a 40% likelihood that biometric payment cards reach mass market status, we value Pay at NOK 5.4, with potential upside to more than NOK 25.

We initiate coverage with a fair value of NOK 10.7–10.9