GBC AG: publity AG | Rating: BUY

Original-Research: publity AG - von GBC AG

Einstufung von GBC AG zu publity AG

Unternehmen: publity AG
ISIN: DE0006972508

Anlass der Studie: Research Report (Initial Coverage) Empfehlung: BUY
Kursziel: 46.50 EUR
Kursziel auf Sicht von: 31.12.2023
Letzte Ratingänderung:
Analyst: Matthias Greiffenberger, Marcel Schaffer

Highly profitable asset manager with proprietary research tool and above-average transaction speed. PREOS shareholding to be reduced in the medium term from 93.1% to around 20%.
 
publity AG is an asset manager that mainly generates revenues through commissions for finding (finder's fee), managing (basic fee) and selling (exit fee) properties. Managing here refers to the so-called manage-to-core strategy, in which the focus is on improving the rental situation and rental yields. Extensive information on the approximately 9,500 relevant properties in Germany is tracked, maintained and analyzed using a proprietary research tool. The standardized and formalized processes enable very rapid transactions, which represents an important competitive advantage. The company's current focus is on commercial properties in A-locations in the metropolitan areas of the top seven cities (excluding Berlin). The main customer is PREOS Global Office Real Estate & Technology AG (PREOS) in which publity holds a 93.1% stake. PREOS is an active real estate investor whose management acts autonomously and largely independently of publity.
 
In the past fiscal year 2021, revenues increased by 79.6% to €28.75 million (previous year: €16.01 million). The increase in revenue is mainly due to finder's fees and basic fees, as well as the procurement of a new major investor for PREOS. Earnings improved disproportionately and EBIT rose by 140.9% to €14.15 million (previous year: €5.87 million). The reason for this is the absence of special costs from the previous year and cost optimization measures. Impairment losses on financial assets, in particular on the PREOS shares held, amounting to €27.47 million, resulted in a clearly negative financial result of €-24.83 million (previous year: €6.17 million). The impairments did not reduce liquidity and are attributable to the general market trend. As a result, the net result for the year was €-15.43 million (previous year: €12.08 million).  
In the first half of 2022, revenues decreased slightly by 14.1% to €9.95 million (PY: €11.59 million). According to the management, revenue mainly consisted of inventory fees and finder's fees. In contrast to the revenue development, EBIT increased by 26.5% to €6.35 million (previous year: €5.02 million). The background to this development was cost optimization. However, additional costs will be incurred in the second half of 2022, e.g. due to the Annual General Meeting and consulting costs in the course of the bond issue. Overall, the result for the period increased by 13.9% to €5.23 million (previous year: €4.59 million).   
The guidance for the current fiscal year is for revenues moderately above the previous year's level, with EBIT of between €11 million and €15 million and net income of €6 million to €10 million. We expect revenues of €23.2 million in the current fiscal year 2022, followed by €25.52 million in 2023. The commercial real estate sector in A-locations should be well positioned and less affected by the interest rate turnaround and rising energy prices than the rest of the real estate sector. In the medium term, we expect broader client diversification with additional mandates outside PREOS. It is also possible that a joint venture with an American hedge fund could be entered into again. It would also be conceivable to acquire further asset managers or to expand the NPL portfolio. It would also be possible to set up a vehicle of our own to make smaller real estate investments. In our opinion, the company has numerous growth opportunities even in the current phase of the interest rate turnaround. With the continuation of the lean management approach, it should also be possible to further increase earnings and we expect EBIT of €12.65 million in the current fiscal year 2022, followed by €13.56 million in 2023. With the issue of the further bond, the interest burden should increase significantly and we forecast net income of €9.91 million in 2022, followed by €5.64 million in 2023.
 
publity AG plans to issue a further bond (2022/2027) with a volume of up to €100 million. The coupon is expected to be 6.25%. The proceeds from the issue are to be used to finance further growth and to acquire real estate and equity investments.  The terms and conditions of the existing 2020/2025 bond have been adjusted so that the maturity date also falls on December 19, 2027 and the coupon will also be raised from 5.5% to 6.25% from June 19, 2023. 
 
Furthermore, an extensive transaction is planned in which PREOS will receive a new major shareholder and publity's stake will be reduced from initially 51% to ultimately 20%. For this purpose, capital increases in kind are to be carried out in the PREOS subsidiary GORE and then the new shares of GORE are to be contributed to PREOS. A non-cash capital increase of €480 million and another of €1.75 billion are planned. The capital increase in kind in GORE is to be carried out at €3.00 per share each and the contribution of the GORE shares to PREOS is to be carried out at €5.20 per share each. Extraordinary shareholders' meetings have already been held for the first capital increase in kind and the contribution, but actions for annulment and rescission are still pending. However, this should only slightly delay the schedule. In our forecasts, we still assume the current corporate structure, in which publity holds 93.1% of the PREOS shares.  
We have valued the company using a DCF model and attributed the investments in affiliated companies and the loans to affiliated companies to net financial assets. This primarily includes the PREOS investment. The net financial assets of €576.86 million as of June 30, 2022 would result in a fair value of €38.78 per share based on the number of shares in publity. Adding the value of the operating business on the basis of the DCF model, we have calculated an overall price target of €46.50 per share and, against the backdrop of the high upside potential, assign a Buy rating.

Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/25797.pdf

Kontakt für Rückfragen
GBC AG
Halderstrasse 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter: http://www.gbc-ag.de/de/Offenlegung +++++++++++++++
Date and time of completion of the study: 04.11.2022 (15:15) German version: 04.11.2022 (09:55) Date and time of the first distribution of the study: 07.11.2022 (10:00) German version: 07.11.2022 (10:00)

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