Original-Research: THE NAGA GROUP AG - from NuWays AG
05.11.2024 / 09:01 CET/CEST
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Classification of NuWays AG to THE NAGA GROUP AG
Company Name: THE NAGA GROUP AG
ISIN: DE000A161NR7
Reason for the research: Update
Recommendation: Buy
from: 05.11.2024
Target price: EUR 1.40
Target price on sight of: 12 months
Last rating change:
Analyst: Frederik Jarchow
Merger burdened H1 figures; Growth ahead; chg
Topic: Last week, NAGA reported unaudited figures for H1Ž24 that came in weaker than expected on both top- and bottom line, mainly due to effects related to the merger of NAGA and CAPEX. In detail:
Sales of EUR 31.6m (vs eNuW: EUR 33.8m) were below previous yearŽs pro forma figures of EUR 36.0m. According to the company, this was the resulting from the closure of loss-making non-core subsegments. This is reflected in lower than anticipated avg. revenue per trade of only EUR 4.0 (vs EUR 5.0 pro forma in H1Ž23 vs eNuW: EUR 4.5). Positively, trading activity increased to 7.9m transactions (vs 7.2m pro forma in H1Ž23 vs eNuW: 7.5m).
EBITDA came in at EUR 2.6m, above previous yearŽs figures (EUR 1.5m pro forma in H1Ž23), but below our expectations (eNuW: EUR 4.4m). The positive yoy development is mainly driven by significant cost cutting, i.e. of sales related expenses (EUR 6.2m vs EUR 8.7m pro forma H1Ž23 vs eNuW: EUR 6.3m), personnel expenses (EUR 5.7m vs EUR 7.0m pro forma in H1Ž23 vs eNuW: EUR 6.0m) and other operating costs (EUR 5.8m vs EUR 7.6m pro forma H1Ž23 vs eNuW: EUR 4.6m) overcompensating for the weaker topline. Still, due to higher than anticipated marketing expenses as well as lower other operating income and sales, EBITDA fell short of expectations. EBT of EUR -4.1m (vs eNuW: EUR -2.4m), is mainly burdened by regular D&A to the tune of EUR 5.5m and financing costs of EUR 1.2m.
Despite the rather disappointing H1Ž24 figures, the outlook remained bright. On the back of high marketing spendings in H1, the launch of the fully integrated NAGA SuperApp within the Telegram ecosystem with more than 950m user, as well as the cooperation with Borussia Dortmund, we expect a significant sequential improvement in H2 that should result in EUR 67.5m in sales and EUR 5.9m EBITDA in FY24, which is rather conservative and below the internal plan of EUR 75m in sales and EUR 8.6m.
For FY26e, management plan to achieve EUR 129m and EUR 31m EBITDA, which looks ambitious but not out of reach, yet below our current estimates of EUR 103m sales and EUR 19m EBITDA). Keep in mind that an incremental positive change in the sentiment could have an enormous effect on the P&L of NAGA.
BUY with a unchanged PT of EUR 1.40 based on DCF.
You can download the research here: http://www.more-ir.de/d/31179.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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2022269 05.11.2024 CET/CEST
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