Original-Research: MLP SE - from NuWays AG
30.07.2024 / 09:21 CET/CEST
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Classification of NuWays AG to MLP SE
Company Name: MLP SE
ISIN: DE0006569908
Reason for the research: Update
Recommendation: BUY
from: 30.07.2024
Target price: EUR 11.50
Last rating change:
Analyst: Henry Wendisch
Q2 EBIT above estimates, guidance specified at upper end
Yesterday, MLP released an ad-hoc with its preliminary Q2 EBIT and specified its FY EBIT guidance towards the upper half. In detail:
Q2 EBIT significantly above last year: Q2's preliminary EBIT came in at EUR 12m, +135% yoy (eNuW: EUR 11m; H1 EBIT: EUR 49m, +31% yoy). The main drivers were performance fees (amount undisclosed; eNuW: EUR 4.2m) and continued tailwinds from the interest rate business. Moreover, last year's EBIT was burdened by a negative EUR 2.8m one-off, thus serving as an easy comparable base.
Performance Fees are back: some of FERI's funds have exceeded their old HWM and hurdle rate on June 28th, which should have led to EUR 4.2m in performance fees for Q2 (see update from 11th July 2024). Moreover, AuMs should also have reached new records (eNuW: EUR 60.5bn, up 7% yoy vs. EUR 59.3bn in Q1), which is especially favorable for MLP, as it serves as a higher base for recurring revenues, which should increase profitability in wealth management due to operating leverage.
Banking to have remained strong: given that the ECB only lowered interest rates towards the end of Q2, the second quarter could almost fully benefit from ongoing strong interest income. Against strong interest income of EUR 20.3m (+29% yoy and -9% qoq; recorded as sales) we also expect heightend interest expense of EUR 8.2m (+ 105% yoy and -6% qoq; recorded as OPEX), which should have led to an EBITeffective net interest income of EUR 12.1m (+3% yoy) in Q2, in our view. Going forward, we conservatively assume an interest rate cut by 25bps in mid Q3 to 4.00% and another 25bps reduction to 3.75% in Q4, leading to an estimated net interest income of EUR 48m (+1.4% yoy) for FY'24e. (see p. 2 for details)
Guidance specified at upper end, but still conservative: with yesterday's ad-hoc, MLP also specified its EUR 7585m EBIT guidance towards the upper half (i.e., EUR 80-85m). Nevertheless, we expect a guidance beat (eNuW: EUR 90m; eCons: EUR 85m) due to (1) the later than previously anticipated ECB rate reduction (2) an ongoing recovery in real-estate from low levels and (3) the higher than expected AuMs which should lead to increasing sales in wealth management.
All in all, solid results and a slight beat of our Q2 EBIT estimate. Thus, we reiterate our BUY recommendation with unchanged PT of EUR 11.50, based on FCFY'24e and SOTP.
You can download the research here: http://www.more-ir.de/d/30315.pdf For additional information visit our website: www.nuways-ag.com/research
Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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1956743 30.07.2024 CET/CEST
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