Original-Research: MWB AG (von NuWays AG): Hold
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Original-Research: MWB AG - from NuWays AG
04.12.2024 / 09:00 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
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Classification of NuWays AG to MWB AG
Company Name: MWB AG
ISIN: DE000A4032H1
Reason for the research: Update
Recommendation: Hold
from: 04.12.2024
Target price: EUR 50.00
Target price on sight of: 12 months
Last rating change:
Analyst: Henry Wendisch
Positive x-read but still muted secondhand market
Topic: Last week, The Platform Group (TPG) announced the takeover of
Chronext which highlights the interest in secondhand watch dealers such as
MWB, in our view. On the other hand, current data still show a muted
secondhand watch market. In detail:
TPG announced the acquisition of Chronext via an asset-deal out of
insolvency under self-administration. While no transcation data were
disclosed, we expect TPG to have paid 5-10x EBITDA based on past TPG
acquisitions. However, we do not regard this as a fair valuation cross-read
for MWB, because (1) Chronext was bought out of insolvency, pushing down the
price, (2) MWB operates as a broker (vs. Chronext as a mix of retailer and
broker) and (3) MWB is smaller and therefore not comparable. However, the
deal shows that companies such as TPG have a keen interest to expand into
the secondhand watch market, which will remain a large and vibrant part of
the overall watch market, due to artificial scarcity on the firsthand
market.
On the other hand, market prices on the secondhand market have continued to
decline throughout 2024 and now seem to stabilize at trough levels. (see p.
2) As this leads to reluctance at investor type watch buyers, fearing a
further decline in the future, the still low inventory turnover (pre-owned
Rolex watches took an average of 67 days to sell in H1'2024 vs. 18 days in
2021, Source: Forbes) also indicates a much lower no. of watches sold. Both
effects lead to tough market conditions. Light at the end of the tunnel
could come from continously strong capital and crypto markets, as
investor-type watch buyers might take profits there and shift asset
allocation more towards watches.
MWB however is only a small piece of the overall market and with its
elaborate network of repeat customers a bit more immune against overall
market dynamics. Especially the sale of just a few higher priced watches can
significantly affect sales positively. Moreover, MWB is in a comfortable
position to capture growth in the next years, as its unique USPs of (1) a
high level of trust among customers (vs. some concerning Chronext reviews on
Trustpilot) and (2) of finding a desired watch within 7 days remain fully
intact, even at current market conditions, which shows their potential to
capture market share.
Against this backdrop, we view MWB as too early to buy and thus reiterate
our HOLD recommendation, with unchanged PT of EUR 50.00, based on DCF.
You can download the research here: http://www.more-ir.de/d/31481.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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2043619 04.12.2024 CET/CEST
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