Original-Research: MLP SE (von NuWays AG): Kaufen
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Original-Research: MLP SE - from NuWays AG
Classification of NuWays AG to MLP SE
Company Name: MLP SE
ISIN: DE0006569908
Reason for the research: Update
Recommendation: Kaufen
from: 13.05.2024
Target price: EUR 12.00
Target price on sight of: 12 Monaten
Last rating change:
Analyst: Henry Wendisch
Q1 preview: performance fees and banking to drive EBIT
Topic: MLP's Q1 results are due on Wednesday, May 15th and we expect a
solid EBIT expansion driven by a contribution of performance fees (first
time since Q4'21) as well as continuous support from the banking business.
In detail:
Solid top-line: For Q1, we expect sales to grow by 7% to EUR 280m driven by
Wealth Management (eNuW: EUR 81m, +10% yoy, thereof EUR 7m performance fees) as
well as Interest Income (eNuW: EUR 20m, +70% yoy) while Non-Life Insurance
(NuW: EUR 97m, +6% yoy) and Old-Age Provision (eNuW: EUR 46m, +7%) should also
continue to develop favourably. On the other hand, we expect Real-Estate to
remain muted (eNuW: EUR 6m. -49% yoy) due to the absence of new development
projects (vs. larger projects in Q1' and Q4'23). Accordingly, Loans and
Mortgages should also have remained muted (eNuW: EUR 3.7m).
Disproportionate EBIT expansion: Thanks to the strong profit drivers Wealth
Management and Interest Income, we expect EBIT to grow disproportionately
by 14% yoy to EUR 37m (vs. Q1'23: EUR 32.4m) thanks to an ongoing strong
interest result (eNuW: EUR 12.7m, + 24% yoy) as well as an EBIT contribution
from performance fees (eNuW: EUR 5m). Both profit drivers should offset
increased personnel expenses (eNuW: EUR 55m, +6% yoy) and expenses of the
interest business (eNuW: EUR 6.4m)
Guidance seems conservative: MLP's FY'24e EBIT guidance of EUR 75-85m is well
below our (eNuW: EUR 92m) and in line with market (eCons: EUR 85m) expecations
and thus seems conservative already. For the remainder of the year, we
expect the interest results to remain strong, even in the even of slight
rate cuts. Additionally, capital markets also develop favourably so far,
which should continue to drive AuM growth (and thus sales growth) next to
continuous capital inflows from MLP's mass affluent customer base. On top
of that, another opportunity for performance fees in the coming quarters
could also arise, which we do not reflect in our estimates. On a side note,
the negative effect of EUR 8m in one-off expenses (EUR 5m goodwill impairment
in Q4 and EUR 3m merger related costs in Q2) on last years EBIT should not
occur again and thus also support an elevated EBIT for FY'24e.
Against this backdrop, MLP's shares are not priced adequately, in our view.
The outstanding AuM of EUR 57bn already explain 90% of MLP's current
valuation, while the strong net liquidity of EUR 190m makes up 30% of MLP's
market cap. (see SOTP below). This implies, that the remaining business (ex
AuM) is not at all reflected in MLP's current valuation, which we regard as
highly unjustified for a well diversified business with a 68% recurring
revenue share.
Hence, we reiterate our BUY recommendation with an unchanged PT of EUR 12.00,
based on FCFY'24e and SOTP.
You can download the research here:
http://www.more-ir.de/d/29711.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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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse.
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The result of this research does not constitute investment advice
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