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Original-Research: Coreo AG - von GBC AG Einstufung von GBC AG zu Coreo AG Unternehmen: Coreo AG ISIN: DE000A0B9VV6 Anlass der Studie: Research Report (Initial Coverage) Empfehlung: BUY Kursziel: EUR 3.10 Kursziel auf Sicht von: 31/12/2019 Letzte Ratingänderung: Analyst: Cosmin Filker; Marcel Goldmann Attractive 'value-add' real estate specialist, Fast portfolio expansion achieved, value-creating growth strategy to be supported by capital increase, high share price potential Coreo AG is currently executing a subscription-rights capital increase with projected gross issue proceeds of up to EUR 16 million. The liquidity proceeds will be used to acquire commercial and residential real estate for the 'value-add' business segment. In accordance with the corporate strategy, the focus is on medium-sized cities in Germany which have not yet been affected by the strong price increases thus enabling adequate rental returns. The goal is to build a high-yielding portfolio in terms of purchase prices. Currently (pre money), the company has a projected NAV (based on GBC calculations) of EUR 2.40. Our fair value rating on DCF basis (post money) is even higher (see below). The company was known as Nanostart AG until 2016 and was active as an investment company in the nanotechnology sector. The company and corporate purpose were changed to real estate as a result of a resolution passed by the Annual General Meeting in 2016. The majority of the investments (made in previous years) have since been sold. As of 30 June 2018, the company still held a little bit more than 2 million shares and thus almost 7.7% of the listed company MagForce AG. Since 2017, Coreo has been investing in residential and commercial properties/portfolios, primarily in the valueadded segment, in line with its value-creating growth strategy. The sale of non-strategic portfolio elements generates short-term capital gains. At the same time, the remaining properties are being developed and optimised in order to increase long-term rental income and consequently create potential for value appreciation. Since launching the new corporate strategy, the company has already completed five transactions with a total investment volume of just under EUR 41 million. The properties are all located in the B and C locations addressed by Coreo AG and have comparatively high rental yields of more than 10%. In the current 2018 financial year, the largest investments in terms of volume involved the acquisition of the residential real estate portfolio in Göttingen and the Hydra portfolio. The acquired portfolios will be held for producing long-term rental income. In addition, individual properties are being revitalised or rebuilt in order to benefit from expected increases in value. The company also plans to raise hidden reserves within the scope of property sales. Access to liquidity from property sales is then to be used for the planned investments (revitalisation, conversion, etc.). It can also be assumed that the company will successively reduce its stake in MagForce AG, thereby releasing further liquidity. The basis for our sales and earnings forecasts is the current real estate portfolio and assumed investments following the current capital increase. The forecasts and valuation are therefore a so-called of post-money consideration. We have also taken note of the unusual fact that Coreo AG until now does not consolidate the property companies (note: all properties are held in subsidiaries of the legal form GmbH and GmbH & Co. KG). The after-tax result of the property companies is consequently only reported as investment income in the financial result of Coreo AG. We are 'moving up' this net income position to the gross profit of Coreo AG, which means that the property income will be part of the operating result (EBITDA, EBIT). For the current and upcoming financial year, we expect a tangible increase in income and profit. In addition to the increase in rental income, the company is expected to generate significant sales proceeds and uncover hidden reserves. As income from participation represents a residual value, Coreo AG should achieve high profit margins of up to 65%, according to our plans. At the level of a property company, the profit margin is lower, but still at the upper end of the industry-standard key figures. Based on our DCF model (post-money), we have calculated a target price of EUR3.10. Based on the current share price and the placement price within the context of the current capital increase of EUR 1.60 per share, our recommendation is BUY. Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/17359.pdf Kontakt für Rückfragen Jörg Grunwald Vorstand GBC AG Halderstraße 27 86150 Augsburg 0821 / 241133 0 research@gbc-ag.de Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (4,5a,5b,6a,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter: http://www.gbc-ag.de/de/Offenlegung.htm Date and time of completion (german version): 29/11/2018 (5:13 pm) Date and time of first distribution (german version): 30/11/2018 (8:30 am) Date and time of completion (english version): 05/12/2018 (9:26 am) Date and time of first distribution (english version): 05/12/2018 (10:00 am) =------------------übermittelt durch die EQS Group AG.------------------- Für den Inhalt der Mitteilung bzw. Research ist alleine der Herausgeber bzw. Ersteller der Studie verantwortlich. Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.
(END) Dow Jones Newswires
December 05, 2018 04:02 ET (09:02 GMT)