Original-Research: EV Digital Invest AG - from NuWays AG
06.11.2024 / 09:01 CET/CEST
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Classification of NuWays AG to EV Digital Invest AG
Company Name: EV Digital Invest AG ISIN: DE000A3DD6W5
Reason for the research: Update
Recommendation: Buy
from: 06.11.2024
Target price: EUR 1.80
Target price on sight of: 12 months
Last rating change:
Analyst: Frederik Jarchow
Mixed H1 // Project defaults to burden business; chg.
Topic: Last week, EVDI published unaudited H1Ž24 figures that came as a mixed bag: While topline showed slight improvements on low levels, the bottom remained soft, still burdened by project defaults. In detail:
H1 sales came in at EUR 1.6m, which is above previous yearŽs figure of EUR 1.5m, but inflated by c. EUR 0.3m that are directly depreciated in other operating expenses as it is rather unlikely that the amount outstanding can be collected. The adjusted sales figure of EUR 1.3m is still above our estimates of EUR 1.1m, driven by higher financing volumes of EUR 13.7m (vs eNuW: EUR 13m) and higher avg sales per project of EUR 0.21m (vs eNuW: EUR 0.14m).
EBITDA came in at negative EUR 2.2m (vs EUR -1.4m in H1Ž23), below expectations of EUR -1.9m, mainly due to high legal costs and decreasing but still high personnel expenses paired with low topline levels. Note that EUR 2.8m of the other operating expenses are expenses from write-offs of receivables that are offset by the c. 0.3m sales adjustment and the EUR 2.3m reduction of value adjustments of receivables in other operating income.
Overall, the business of EVDI is still heavily burdened by the deteriorating real-estate market with project defaults and project delays, construction costs and real-estate prices normalizing slower than expected, and investors of the senior tranches (mostly banks) of new projects being more selective and reserved.
All that should further burden the business at least for the remainder of FY24. EVDI hence confirmed its FY24 sales guidance of EUR 2.3-2.7m, which imply only EUR 1.0-1.4m adjusted sales in FY24 (vs eNuW: EUR 1.5m).
Positively, we should have already seen the trough in the real-estate market and the recovery is already ongoing. Further, EVDI has diversified its business by offering new products that are rather contrary to real-estate investments such as deposit accounts, renewable energy projects, ETFs as well as holistic wealth management. This initiated diversification should reduce the dependency from the very cyclical real-estate project business, stabilizing the income and margins going forward.
In light of the recent stock price weakness, we change to BUY with a reduced PT of EUR 1.80, based on DCF.
You can download the research here: http://www.more-ir.de/d/31193.pdf For additional information visit our website: www.nuways-ag.com/research
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2023287 06.11.2024 CET/CEST
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