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Original-Research: EV Digital Invest AG - from NuWays AG
Classification of NuWays AG to EV Digital Invest AG
Company Name: EV Digital Invest AG
ISIN: DE000A3DD6W5
Reason for the research: Update
Recommendation: Halten
from: 04.06.2024
Target price: EUR 2.00
Target price on sight of: 12 Monaten
Last rating change:
Analyst: Frederik Jarchow
Massive guidance cut amid clouded visibility; chg
Topic: EVDI slashed its FY24 guidance in order to reflect the "historically
unprecedented real estate crisis" that lasts longer than previously
expected. Further, the company issued two convertible bonds to secure the
arising new capital requirements. In detail:
EVDI cut its income guidance to EUR 2.3-2.7m from previously EUR 4.9-5.8m. This
is significantly below our estimate of EUR 5.6m and below previous year's
figure of EUR 4.5m. Accordingly, EBIT was reduced substantially to EUR -3.5 to
-4.1m from EUR -1.9m before (vs. eNuW: EUR -2m vs EUR -3.9m in FY23). The reasons
for the cut are manifold in our view: 1) Project defaults paired with the
delayed payback of the mezzanine tranche of projects of financed projects
deteriorating the trust of clients, which makes it more difficult to
convince them in the future, 2) interest rate cuts are delayed and not as
meaningful as initially anticipated 3) construction costs and real-estate
prices normalized slower as expected. All that should further burden the
number, avg. volume and margin of financed projects, which ultimatively
should burden the topline - least for the remainder of FY24.
Positively, we should have already seen the through 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
(recently closed the first solar financing project with "Solarpark
Eyendorf", which was fully financed within a few minutes), 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.
On the back of the clouded outlook for FY24, EVDI identified additional
capital requirements which will be covered by the majority shareholder via
two convertible bonds with a total volume of EUR 2.5m (the first with EUR 1.1m
already subscribed, the second to follow after the AGM). The term of the
convertible bonds is two years and the conversion price EUR 3.25 per share.
Covering the additional capital requirements during the challenging
situation emphasize the commitment of the majority shareholder in our view.
In light of the massive, unexpected guidance cut and the depressing outlook
for FY24 we cut our estimates and downgrade to HOLD with a reduced PT of EUR
2.00, based on DCF.
You can download the research here:
http://www.more-ir.de/d/29951.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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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse.
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The issuer is solely responsible for the content of this research.
The result of this research does not constitute investment advice
or an invitation to conclude certain stock exchange transactions.
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