万事达与Visa：支付网络深度研究

1、Mastercard & VisaNorth America Equity Research15 March 2019MA, MA USOverweightPrice: $229.51 (14 Mar)Price Target: $246.00 (Dec 19)Payment Network Tale of the Tape (2018DeepDive)V, V USOverweightPrice: $154.20 (14 Mar)Price Target: $166.00 (Dec 19)In this report, we look back to 2018 and compare key

2、 financial, operating and return metrics to better understand performance differences between Mastercard and Visa. Our analysis, this year, is complicated by two factors, (1) new accounting standards related to the timing and recognition of certain revenue and incentives, which boosted MAs net reven

3、ue and EPS growth by four and five percent, respectively, in 18, and (2) MAs ongoing Maestro card conversion effort, which comparatively boosts reported card and volume growth metrics in certain regions. Where possible, weve tried to adjust for and/or highlight these factors. Bottom line, Mastercard

4、 outgrew Visa on most key metrics in 18, but the growth discrepancy is not as dramatic as headline figures would suggest.Visa still the clear scale leader. Visa has greater scale, generating nearly twice as much total volume as Mastercard, 42% more revenue and a thirteen point operating margin premi

5、um, primarily due to better personnel and advertising expense leverage. Visa has 70% more cards outstanding and roughly two-thirds relative market share (based on purchase volume) in allgeographies.Volume and yield. On a reported basis, Visa is more U.S. centric Mastercard based volume (49%/35%) and

6、 revenues (45%/33%). Visa slightly faster U.S. volume growth, while Mastercard faster international growth, helped by Maestro card conversions in Europe and LATAM, a trend we see continuing the foreseeable future. and Vs rebate and incentive growth continues to outpace volume growth. Encouragingly,

7、MA and Visa were able to increase net revenue by 0.6bps (adjusting for accounting changes) and 0.9bps, respectively, in 18, despite the growth in rebates andincentives.Cross-border. Mastercards cross border volume increased 18% FXN in CY18 versus Visa at 9%. Mastercard has historically at a slight p

8、remium to Visa, but the growth disparity began widening in 3Q17, coinciding a large Maestro card conversion (Maestro cards and volume are not included in Mastercard operating metrics). We note the conversion doesnt entirely represent incremental volume, but it does boost operating metrics. As of 4Q1

9、8, there were nearly 500M Maestro cards outstanding, providing a long runway for continued cross-border outperformance, in ourview.Income statement analysis. a reported basis, Mastercard reported meaningfully faster revenue (MA/V at 20%/13%) and EPS (MA/V 42%/31%) growth in However, the growth dispa

10、rity narrows considerably after adjusting accounting changes, which added four and points to MAs reported revenue and EPS growth, respectively. On an organic FXN basis adjusting accounting changes, estimate MA and V grew revenues 15% and 12%, respectively, in 18. Tax reform had a similar effect on b

11、oth companies, adding 14 and 13 points EPS growth Mastercard and Visa, respectively.Payments, Processors & IT ServicesTien-tsin Huang, CFA AC(1-212) 622-6632 HYPERLINK mailto:tien-tsin.huang tien- HYPERLINK mailto:tsin.huang tsin.huangBloomberg JPMA HUANG Reginald L. Smith, CFA(1-212) 622-6743 HYPER

12、LINK mailto:reginald.l.smith reginald.l.smithConnorAllen(1-212)622-1303 HYPERLINK mailto:connor.allen connor.allenJ.P. Morgan Securities LLCSee page 26 for analyst certification and important disclosures.J.P. Morgan does and seeks to do business with companies covered in its research reports. As a r

13、esult, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. HYPERLINK / Tien-tsin Huang, CFA (1-212) 622-6632 HYPERLINK mailto:tien-

14、tsin.huang tien- HYPERLINK mailto:tsin.huang tsin.huangNorth America Equity Research15 March 2019Shareholder and financial returns. year, both companies returned roughly 90% of their adjusted net income to shareholders, down slightly from the prior year period. MA returned $6.0bn to shareholders, in

15、 the form of dividend and share repurchases, up 27% from the prior year period, while V returned $9.8bn, up from the prior year period. At current levels, offers a 58bps dividend yield, versus V at 65bps. ROE and metrics remain higher than Visas, primarily due to Visas relatively large intangibles a

16、nd goodwill balances, largely created pre-IPO, and equitybalance.MAs valuation premium consistent with recent trading patterns. and V beat quarterly consensus EPS estimates an average 9% and 6%, respectively in CY18, which combined with multiple expansion 27% and 16% appreciation in shares (versus S

17、&P500 down 6%). Year-to-date, outperformed V and the S&P 500 roughly six and ten points, respectively. Today, MA trades at a two-turn premium to V on a NTM P/E basis (MA at 29x, V at 27x), about in line its month average, but a turn its and three-yearaverages.Looking ahead. We think Mastercard will

18、continue to post faster volume (helped Maestro conversions and mix less mature issuers) and organic revenue growth, but see the spread narrowing in late 2019, as Visa implements certain increases in the U.S. Longer-term, we think Mastercard and Visa will post low teen and low double-digit organic re

19、venue growth, respectively. Our MA estimates call for 12% and 14% revenue growth and 16% and 19% EPS growth in CY18 and CY19, respectively, while V call 10% revenue growth and and 16% EPS growth in CY19 and CY20,respectively.Our Takeaway. Bottom line, Mastercard outgrew Visa on most metrics in 2018,

20、 but the growth discrepancy is not nearly as dramatic as headline figures would suggest. That said, we believe Mastercard will continue to report faster card and volume-based growth, driven modest share wins, mix less mature clients and the ongoing Maestro card conversion opportunity. Visa has narro

21、wed its valuation gap to Mastercard since late January, as we believe investors have gained a better appreciation for some of the factors behind Visas slower metricgrowth.OverweightMastercard (MA;MA US)CompanyDataYear-end Dec ($)FY17AFY18AFY19EFY20EFY21ESharesO/S(mn)1,201Revenue ($ mn)12,49714,95016

22、,70919,022-52-weekrange($)231.33-Adj. EBIT ($ mn)6,8048,4109,56711,122-167.94EBIT margin54.4%56.3%57.3%58.5%-Market cap($mn)275,641.50EBITDA margin57.9%59.3%60.0%61.0%-Exchangerate1.00Adj. EPS ($)4.586.497.548.95-Freefloat(%)88.3%BBG EPS ($)4.576.457.568.9410.563M - Avg dailyvol (mn)3.95Reported EPS

23、 ($)4.586.497.548.95-3M - Avg dailyval ($803.1Dividend yieldmn)Adj. P/E50.135.430.525.7-Volatility(90Day)33P/ BV44.744.333.223.0-IndexS&P500BBGBUY|HOLD|SELL42|3|1Source: Company data, Bloomberg, J.P. Morgan estimates.OverweightVisa Inc. (V;V US)CompanyDataYear-end Sep ($)FY17AFY18AFY19EFY20EFY21ESha

24、resO/S(mn)2,476Revenue ($ mn)18,35820,60922,69225,077-52-weekrange($)154.69-Adj. EBIT ($ mn)12,35513,75615,40117,462-116.03EBIT margin67.3%66.7%67.9%69.6%-Market cap($mn)381,799.20EBITDA margin70.3%69.7%70.7%72.3%-Exchangerate1.00Adj. EPS ($)3.484.615.346.18-Freefloat(%)99.3%BBG EPS ($)3.434.585.316

25、.167.203M - Avg dailyvol (mn)9.33Reported EPS ($)3.484.615.346.18-3M - Avg dailyval($1,289.6Dividend yieldmn)Adj. P/E44.333.428.925.0-Volatility(90Day)28P/ BV11.310.610.19.2-IndexS&PBBGBUY|HOLD|SELLSource: Company data, Bloomberg, J.P. Morgan estimates.Investment Thesis, Valuation and RisksMastercar

26、d (Overweight; Price Target: $246.00)Investment ThesisMastercard is the #2 global card network worldwide and benefits from the ongoing global secular shift toward card-based and electronic payments. Mastercards business is highly defensible and characterized by recurring revenues, high incremental m

27、argins, low capital expenditures, and high free cash flow. We remain Overweight as we think shares offer premium growth among large-cap names, and we see potential for shareholder-friendly actions (e.g., additional share repurchases and/or dividends) over the next few years.ValuationMA shares have i

28、ncreased 21% YTD, versus an 11% and rise in the S&P 500 and Visa, respectively. MA trades 30.5 times our CY19E EPS, versus Visa at 28 times and a broader payment processing group average of 22 times. Our $246 19 price target assumes a 27.5x target multiple, which falls between its current (29 times)

29、 and three-year (27 times) average NTM P/E multiple, which we think is reasonable.Risks to Rating and Price TargetMaterial adverse impact from implementation of interchange regulation, including but not limited to 1) market share loss and 2) increased pricing pressuresame risk applies to outcome of

30、pending settlement of MDL1720;Unforeseen payment processing regulation in non-U.S.markets;Increased competition from alternative payment processingmediums/providers;Deceleration in GDV growth (particularly cross-bordervolume);Increased pricing pressure from end-market consolidation (merchant acquire

31、rs and card issuers);andMajor issuerdefection.Investment Thesis, Valuation and RisksVisa Inc. (Overweight; Price Target: $166.00)Investment ThesisVisa is the #1 credit and debit network worldwide and benefits from the ongoing global secular shift toward card-based and electronic payments. Visas busi

32、ness is characterized by recurring revenues, high incremental margins, low capital expenditures, and high free cash flow. We rate Visa Overweight as we think shares offer premium growth (at a reasonable price) among large-cap names and with EPS upside potential from fee increases and the Visa Europe

33、 integration.ValuationV shares have increased 15% YTD versus a 21% rise in Mastercard and a 11% rise in the S&P 500. V trades 28 times our CY19E EPS versus MA at 30.5 times and a broader payment processing group average of22times.Our $166 Dec 19 price target is based on a 26x target multiple, is a o

34、ne turn discount to its current forward multiple (27 times), and a half turn premium to its three-year (25.5 times) average NTM P/E multiple, and a one and a half turn discount to our Mastercard target multiple, which we think is warranted given slightly slowergrowth.Risks to Rating and Price Target

35、Material adverse impact from debit interchange regulation, including but not limited to market share loss and increased pricing pressurethe same risk applies to pending merchant litigation settlement (MDL1720);Unforeseen payment processing regulation in non-U.S.markets;Increased competition from alt

36、ernative payment processingmediums/providers;Deceleration in global purchase volume growth (particularlycross-border);Increased pricing pressure from end-market consolidation (i.e., merchant acquirers and cardissuers);Major issuer defection;andAcquisition integrationissues.MA/V Tale of the TapeTable

37、 1, below, compares key financial metrics from Mastercard and Visa. Visa has greater scale, generating nearly twice as much total volume than Mastercard, 42% more revenue and a thirteen point operating margin premium. On a reported basis, Mastercard outgrew Visa by nearly every relevant measure in C

38、Y18. That said, comparability is complicated by a number of factors including but not limited to the fact Mastercard (1) excludes Maestro and Cirrus-branded transactions from its volume metrics, which understates volume share in certain regions, while boosting revenue yields metrics, and (2) is in t

39、he process of reissuing several hundred million Maestro cards (as Mastercards), underlying card and volume growth metrics. Moreover, an accounting change last year increased MAs reported revenue and EPS growth by four points and points, respectively. What does all this mean? On a true apple-to-apple

40、s basis, the market share and growth trends differential between the two companies are less dramatic than headline figures. In other words, Visas market share dominance and Mastercards volume and card growth premiums are likelyoverstated.Table 1: Payment Network CY18 Financial SummaryMastercardVisaN

41、et Revenues ($ millions)14,95021,253% change (y/y)20%13% change (organic FXN; JPMe)15%11%Net Revenue Yield (bps)25.3bps18.8bpsPersonnel Expense ($ millions)3,2143,298Marketing Expense ($ millions)9961,041Adjusted Operating Profits ($ millions)8,41014,153Operating Margins56.3%66.6%Change in Operating

42、 Margins (y/y)190bps(40bps)Total Volume* ($bn)5,90811,280Growth (Local Currency)14%9%Global Purchase Volume* ($bn)4,3468,377Growth (Local Currency)15%11%US Purchase Volume ($bn)1,5363,697US Credit ($bn)8111,956US Debit ($bn)7251,741Global Processed Transactions (millions)73,791127,743% change (y/y)1

43、3%12%US Credit Cards Outstanding (millions)222336US Debit Cards Outstanding (millions)212561Total Cards Outstanding (millions)1,9523,347Efficiency Measures:Ad & Marketing % of Revs7%5%GDV per $ of Ad & Marketing Spend ($)5,93210,836Employees14,80017,000Revenue per Employee ($ 000s)$1,010$1,250Source

44、: Company reports and JPM calculationsNote: Revenue yield is net revenue divided by gross dollar volume. Mastercards reported data exclude debit transactions on Maestro and Cirrus-branded cards. Card Outstanding figures are as of Sept 18.Other TakeawaysVisa added more cards in the U.S., while Master

45、card added more globally. Visa added 36M consumer cards in the U.S. in the twelve months ended Sept 18, while Mastercard added Globally, Mastercard added 172M cards, in the twelve months ended Sept 18, while Visa added 137M. Mastercard has been aggressively converting its Maestro card portfolio to M

46、astercard, which has helped card and volume growth figures (as the converted cards and associated volume were excluded from Mastercards operating metrics previously). We estimate roughly half of Mastercards reported card growth is driven by Maestro cardconversions.Mastercards volume growth outpaces

47、Visas, helped by Maestro conversion. Mastercards global purchase volume increased 15% on an FXN basis in 18, four points ahead of Visa. A portion of Mastercards premium growth, particularly in Europe and Latin American, can be attributed to the ongoing Maestro conversion. Our sense is Mastercard wil

48、l continue to post faster card and volume growth for the foreseeable future, as the conversion process is still in the early innings (there are 500M remaining Maestro cards to convert). Helping matters are wins and faster growth at Fintechs, especially in Europe where Mastercard has an advantage.Vis

49、a better leverages Personnel and Advertising costs. notional personnel spend is comparable to Visas, despite generating 30% less revenue. Visas nominal marketing spend is slightly higher than Mastercards (V/MA at $1,041M/$996M). Personnel expenserepresents21% of Mastercards net revenues, but only 16

50、% of Visas. Similarly, Advertising and Marketing expense represents 7% of Mastercards net revenues, but only 5% of Visas.Volume and Transaction AnalysisPurchase Volume Mix by Card TypeTable 2, below, shows network volume mix and growth rates by card type. We note Visa domestic credit and debit busin

51、esses are nearly 2.5 times larger than Mastercards. Internationally, Visa is 67% larger than Mastercard. Figures 1 and 2, below, show Mastercard and Visas volume mix by card type and geography. In general, international markets are growing faster than the U.S. market. Mastercard has a relatively hig

52、h mix of international volume (64% of total purchase volume versus Visa at 56%), driven by a relatively high mix of international credit (46% of total purchase volume versus Visa at 33%).Table 2: Purchase Volume Analysis (by Payment Type)$ in billionsMastercardVisaPurchase Volume ($bn)4,3468,377US C

53、redit8111,956US Debit7251,741Intl Credit2,0112,731Intl Debit7991,951Purchase Volume MixUS Credit19%23%US Debit17%21%Intl Credit46%33%Intl Debit18%23%Purchase Volume Growth Rates (Local)15.1%11.3%US Credit9.1%10.1%US Debit13.0%12.7%Intl Credit13.1%10.3%Intl Debit30.1%12.5%Source: Company data.Note: M

54、astercards reported data exclude debit transactions on Maestro and Cirrus-branded cardsFigure 1: Mastercard Purchase Volume Mix (Card Type) - 2018$ in billionsIntl DebitFigure 2: Visa Purchase Volume Mix (Card Type) - 2018$ in billionsIntl Debit$799 18%Intl Credit46%Source: Companyreports.US Credit$

55、811 19%US Debit$725 17%$1,951 23%Intl Credit$2,731 33%Source: Company reports.US Credit$1,956 23%US Debit$1,741 21%Purchase Volume Market Share by Card TypeFigures 3 & 4 below summarize relative purchase volume market share by card type. Visa holds dominant market share in both the U.S. credit and d

56、ebit markets (roughly 71% in both), as well as the international credit and debit markets. We note our Mastercards international volume figures exclude Maestro and Cirrus purchases.Figure 3: Domestic Credit Purchase Volume Share - 2018$ in billionsFigure 4: Domestic Debit Purchase Volume Share - 201

57、8$ in billionsMasterCardMasterCard$725 29%Visa$1,956 71%Visa$1,741 71%MasterCardVisaMasterCardVisaSource: Company reports.Source: Company reports.Note: Mastercard volume excludes Maestro and Cirrus volumeFigure 5: International Credit Purchase Volume Share - 2018$ in billionsFigure 6: International

58、Debit Purchase Volume Share - 2018$ in billions$2,011 42%MasterCard$799 29%Visa$2,731 58%Source: Company reports.MasterCardVisaVisa$1,951 71%Source: Company reports.MasterCardVisaNote: Mastercards reported data exclude debit transactions on Maestro and Cirrus-branded cards.Purchase Volume Mix by Geo

59、graphyTable 3, below, shows network purchase volume mix and growth rates by geography. On a purchase volume basis, Visa is more U.S. centric than Mastercard (49%/36%). Visa has roughly 2/3rds relative market share (based on purchase volume) in all regions. Geographic growth trends are generally simi

60、lar with the exception of Europe and Latin America, where Mastercard enjoys a fourteen and six point growth premium, partially explained, we believe, by Maestro card conversions.Table 3: Purchase Volume Analysis (by Geography)$ in billionsMastercardVisaPurchase Volume ($bn)4,3468,377APMEA1,2372,300E