Original-Research: Netfonds AG (von NuWays AG): Kaufen

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Original-Research: Netfonds AG - from NuWays AG

Classification of NuWays AG to Netfonds AG

Company Name: Netfonds AG
ISIN: DE000A1MME74

Reason for the research: Update
Recommendation: Kaufen
from: 09.07.2024
Target price: EUR 74.00
Target price on sight of: 12 Monaten
Last rating change:
Analyst: Frederik Jarchow

Reassuring roundtable call & value-accretive transaction; chg

Topic: During last week's digital roundtable, hosted by us, the CFO Peer
Reichelt provided a business update as well as with a promising outlook for
the remainder of the year and beyond. Key takeaways:

Value-accretive M&A transaction. The fund initiator GSR GmbH, a subsidiary
of Netfonds, acquired 80% of the outstanding shares of another, not named
fund initiator, increasing GSRŽs AuM by EUR 140m to EUR 330m. The acquired fund
initiator should have a positive effect on the Groups EBITDA to the tune of
c. 300-600k (eNuW) in 2024e. We expect that Netfonds paid some EUR 2-3m
(eNuW), making it an attractive acquisition. With the value-accretive deal,
Netfonds continued its growth and scale-path.

Strong H1 figures ahead: After the record Q1 figures with AuC of EUR 25.1bn
and gross sales of EUR 56m, stock markets have reached new all-time highs in
Q2, providing confidence that Netfonds should have continued organic growth
also in Q2. That, paired with 1) value accretive smaller transactions (i.e.
MFK and Comfort Finance) for very reasonable prices (eNuW: 4-8x EBITDA) for
its advisor network VB-Select, 2) the initiation of an own money market
fund and 3) the acquisition of and umbrella in Luxembourg, should have
further driven top-line and bottom-line (thanks to cross-selling and
synergy effects).

Consolidation of the insurance brokerage market in full swing. The Groups
proprietary, 360° finfire platform is seen to fuel consolidation of the
insurance broker market that is, in contrary to the investment adviser
market, still highly fragmented. Thanks to finfire, the selling and
managing of insurance products is much easier unlocking enormous
cross-selling potentials, as the already onboarded investment adviser can
additionally offer a wide range of insurance products to its customers.
finfire hence remains the companyŽs key mid- to long term growth and
scalability driver. The expected strong organic growth momentum is expected
to be accompanied by further value-accretive M&A deals that has to come at
reasonable price, as management underlined during the virtual roundtable.

Overall, we see Netfonds well on track to reach its mid-term target of EUR
59m net sales (vs eNuW: EUR 59m) and EUR 23m EBITDA (vs eNuW: EUR 20m) by FY26.

BUY with a new PT of EUR 74.00 (old: EUR 73.00), based on DCF.

You can download the research here:
http://www.more-ir.de/d/30169.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
or an invitation to conclude certain stock exchange transactions.

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