Original-Research: MLP SE - from NuWays AG
15.08.2024 / 09:02 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: 15.08.2024
Target price: EUR 11.50
Last rating change:
Analyst: Henry Wendisch
Solid Q2 driven by wealth management and banking
Topic: Following preliminary EBIT results from 29th July (see update from 30th July), MLP provided more details with final Q2 results yesterday. Here's what's new:
* Solid sales figures: Total revenues grew by 8.5% yoy to EUR 230m (H1: EUR 514m, +8% yoy), especially driven by market tailwinds in Wealth Mangement (+18% yoy; 39% of sales), Interest Income (+48% yoy; 10% of sales) and Real Estate Brokerage (+128% yoy; 4% of sales), which have offset the decline in Non-Life Insurance (-7% yoy; 15% of sales), while Old-Age Provision (+1% yoy; 22% of sales) and Health Insurance (+5% yoy; 6% of sales) have remained stable.
* Non-life Insurance and Old-Age Provision temporarily muted: Albeit demand for occupational pension schemes at MLP's institutional clients has temporarily decreased due to investment restraints at SMEs, management expects a rebound in the next quarters. The current weakness in Non-Life Insurance stemmed from a discontinuation of lowmargin contracts, which temporarily burdens the top-line but should ultimately benefit the bottom-line going forward.
* EBIT mix driven by banking, brokerage and wealth management: H1's EBIT showed a substantial improvement over H1'23 (+30% yoy to EUR 48.7m). Here, the main expansion drivers were similar to sales with banking (+30% yoy), brokerage (+229% yoy) and wealth management (+47% yoy). Especially the net interest income of EUR 28m (+26% yoy) in banking as well as performance fees of EUR 9.2m (+362% yoy) in wealth management conbtributed significantly to profitability and made up c. 76% of H1 EBIT. On the other hand, in RE development (i.e. Deutschland.Immobilien) H1 EBIT worsened to EUR -9m (vs. EUR 3m in H1'23) due to the near fullstop of projects.-
* Real estate rebound ahead: While RE brokerage already saw a strong jump from low levels (Q2 sales +128% yoy and 176% qoq), RE development should have reached its low now and follow brokerage going foward. Here management expects a steady rise in sales in the next quarters, which should lead to a less negative EBIT in H2'24e and even a positive EBIT in FY'25e.
* Improved KPIs on all fronts: Next to record sales and EBIT figures, MLP posted record AuMs of EUR 60.5bn (+7% yoy), a record non-life insurance volume of EUR 729m (+7% yoy) and a strong net liquidity of EUR 220m (vs. EUR 191m per Y/E'23), the latter explaining 35% of its market cap. -
All in all a solid release, showing that MLP is on track to outperform its guidance. By simply assuming last year's H2 EBIT (EUR 37.2m excl. one-offs) for H2'24e, FY'24e EBIT would stand at EUR 86m, already above the specified guidance of EUR 80-85m. Furthermore, we expect EBIT to come in at EUR 90m, based on (1) a still strong net interest income, (2) higher AuMs and (3) less negative impacts from RE development expected for H2.
In our view, MLP shares remain highly attractive, trading at 16% adj. FCF yield, a 5.6% dividend yield and only on 5.3x EV/EBIT for FY'24e, while also being a well diversified and stable quality business. Therefore, we reiterate our BUY recommendation and MLP's position in our NuWays' AlphaList with an unchanged PT of EUR 11.50, based on FCFY'24e and SOTP
You can download the research here: http://www.more-ir.de/d/30493.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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