ZEAL's Q2 results were excellent, with revenues of EUR 40.7m (12.6% qoq), beating consensus by 16.5%, driven by growth in monthly active users, billings and gross margin. EBITDA grew disproportionately to EUR 10.6m (13.8% qoq) due to improved marketing efficiency. The games business showed a robust performance with improved customer engagement. The launch of innovative products such as the new charity lottery is expected to drive future growth. Given the strong performance, the company has reaffirmed its FY24 guidance. We believe that ZEAL will reach the upper end of its guidance range, driven by margin optimisation, games and the new charity business. As a result, we have raised our estimates and increased the PT to EUR 56.50 (old: EUR 55.00). Remains a BUY. The full update can be downloaded under https://www.research-hub.de/companies/ZEAL%20Network%20SE

Yesterday, Formycon AG published a few preliminary key figures for H1 2024, highlighting a favorable market penetration of its Lucentis biosimilar FYB201, resulting in higher income in the first half of 2024. Hence, the company lifted its guidance for adj. EBITDA, which includes income from FYB201. Additionally, Formycon now anticipates an earlier EU approval for its Stelara biosimilar FYB202 following a positive opinion from the Committee for Medicinal Products for Human Use (CHMP). In the view of mwb research’s analysts, the potentially earlier EU approval of FYB202 is of great importance as the first Stelara biosimilars have been launched in the EU in July. The PT of EUR 89.00 and BUY rating remain unchanged. The full update can be downloaded under https://www.research-hub.de/companies/Formycon%20AG

Carl Zeiss Meditec (CZM) reported weaker-than-expected Q3 revenues and adj. EBIT, missing consensus by 2% and 7%, respectively. Revenues declined 9% yoy organically in Q3 (reported: +1% yoy due to DORC acquisition), while negative operating leverage dragged the adj. EBIT line down by 36% yoy (margin: -5.8ppt yoy to 13.6%). Persistently weak demand and cautious investments by customers, particularly in North America, as well as the slow start to summer peak season in China, impacted Q3 results. Despite the uninspiring performance so far, management retained its revenue guidance for FY 24 while slightly raising its adj. EBIT guidance range by EUR 10m. CZM is now focusing on the margin and has initiated measures to reduce costs in sales & marketing and R&D. These initiatives should help the EBIT margin recover to CZM’s targeted c. 20% over the medium term. Moreover, amid structurally favourable longterm demand dynamics, CZM’s financial resilience and increasing recurring revenues are expected to aid its recovery from short-term disruptions. mwb research’s analysts retain their BUY rating on the stock at a slightly lower target price of EUR 78.00 (old: EUR 80.00). The full update can be downloaded under https://www.research-hub.de/companies/Carl%20Zeiss%20Meditec%20AG

Kontron reported a solid financial performance in Q2/H1 24 with significant increases in revenues and profitability across all segments, mainly driven by the first-time consolidation of Katek SE. While the results were somewhat light on the top line (delta to eCons of -4.5%), Kontron's Q2 earnings were above consensus (+10%), indicating robust operational execution. The company's strategic focus on IoT and the integration of Katek SE are expected to drive further growth, with guidance maintained and a positive outlook for the remainder of the year. mwb research’s analysts reiterate their BUY rating with an unchanged price target of EUR 35.00, as their estimates remain largely unchanged. The full update can be downloaded under: https://www.research-hub.de/companies/research/Kontron%20AG

Rational reported a good set of results in Q2 24, with sales coming in slightly ahead of consensus, while EBIT surpassing by a solid 13% on easing commodity and international logistics costs. Sales growth picked pace to 6% yoy (+1% yoy in Q1), led by both the iCombi and iVario segments. EBIT grew 12% yoy and the margin improved 1.4ppt yoy to 26.4%, supported by a 270bps yoy expansion in the gross margin. Overall order backlog remained healthy at c. EUR 120m at end-Q2 (11% of 2023 sales), indicating solid execution and improved delivery timelines. mwb research’s analysts like Rational's business model, which allows price increases and high margins, owing to the lucrative after-sales business. Ongoing capacity additions in China, modernisation of machinery at Landsberg am Lech, and the EUR bn+ revenue potential of iHexagon (new product targeting canteens and fast-food outlets etc) all bode well for Rational’s growth prospects. mwb research’s analysts reiterate their HOLD rating with a modified PT of EUR 755.00 (old: 750.00). The full update can be downloaded under https://www.research-hub.de/companies/research/RATIONAL%20AG

Bayer reported a reasonable set of numbers in Q2 2024. Sales grew 3% yoy to EUR 11.1bn (+1% yoy currency and portfolio adjusted [c.p.]), beating consensus by 3% on favourable volume and price development. It also surprised positively in terms of profitability. Although adj. EBITDA declined 17% yoy to EUR 2.1bn, it was 14% ahead of consensus on a strong beat in the pharma segment. In the backdrop of uncertain demand and pricing trends, management reiterated its tepid outlook for 2024 – sales growth of -1% to +3% yoy (c.p.) and adj. EBITDA declining by 9% to 3% yoy. Over the next 2-3 years, management intends to focus on its pharma pipeline. Good traction in its new launches, Nubeqa and Kerendia, and positive phase III results for drugs to potentially treat chronic kidney disease associated with type 2 diabetes should add to momentum in this segment. The company is also streamlining operations to a leaner structure, addressing litigation issues, and deleveraging. Despite these efforts, Bayer’s road to recovery would be bumpy, as Roundup/Glyphosate-related litigations still remain an overhang. Despite the challenges, Bayer could offer an attractive long-term investment opportunity for investors with a good risk appetite. mwb research’s analysts reiterate their BUY rating on the stock at a lower target price of EUR 38.00 (old: EUR 42.00). The full update can be downloaded under https://www.research-hub.de/companies/Bayer%20AG

Suss MicroTec's final Q2 figures confirm the preliminary results announced on 18 July, with revenues of EUR 99.3m, up 45% yoy and 6% qoq, beating market expectations by 5% at the time of the preliminary results. Growth was primarily driven by Advanced Backend Solutions, in particular temporary bonders for high bandwidth memory production. Despite a sequential decline in Photomask Solutions sales due to a base effect, the segment showed strong yoy growth. The Group's gross margin increased to 40.5% and the EBIT margin was 15.3%, slightly lower than in the first quarter due to higher operating expenses. The order book remains strong, with a notable order for a new hybrid bonding solution. Suss MicroTec confirmed its upgraded guidance for FY24, expecting revenues of EUR 380-410m, a gross margin of 38-40% and an EBIT margin of 14-16%. The recent 25% decline in the share price is in line with peers, but neglects the company's pivotal role in the AI sector, which promises further growth. mwb research’s analysts reiterate their BUY rating with a PT of EUR 72.00. The full update can be downloaded under https://www.research-hub.de/companies/SUESS%20MicroTec%20SE

Zalando's Q2 2024 was a solid one. Expectations in terms of sales and operating profit were exceeded, albeit only slightly. After 4 quarters of decline, group revenue sales returned to growth with 3.4% yoy. This was driven by a growth in B2C, mainly in the Sports, Designer, and Beauty segments, as well as gains in the B2B business. The company showed continued margin improvements, based on effective inventory management and cost control. Most notably, Zalando showed a strong financial performance with a 33.4% improvement of FCF, facilitating share and bond buybacks. However, customer development (-1.4%) remained a weak spot. mwb research’s analysts leave their estimates largely unchanged and confirm their PT and rating (EUR 32.00, BUY). The full update can be downloaded under https://www.research-hub.de/companies/Zalando%20SE

WashTec reported reasonable numbers in Q2 24. Revenues declined 6% yoy, while order intake improved yoy, owing to gradual recovery in overall demand, although conditions in some countries are still quite challenging. However, the reported EBIT margin improved 190bps yoy on easing input costs and efficiency measures. Management is confident of sustaining healthy gross margin levels (H1: 30.0%, +3.3ppt yoy), owing to internal efficiencies and favorable material prices such as steel. It is also moving towards one-month steel purchasing terms from 6 months to better align with market prices. Given decent progress so far, management reiterated its conservative FY24 guidance – revenues to remain stable yoy (+1% mwb est.) and EBIT to increase in mid-single-digit % yoy. This is understandable, given the uncertain macro environment. On the strategy front, it is working on enhancing business integration, increasing share of subscription services to stabilize revenues, and focusing on improving local sales in North America. With a current FCF yield of c.10%, mwb research’s analysts believe the stock is undervalued. mwb research reiterates their BUY rating at an unchanged price target of EUR 53.00. The full update can be downloaded under https://www.research-hub.de/companies/WashTec%20AG

Fraport reported a 3% beat on Q2 revenues, reaching EUR 1.15bn (+10.6% yoy), driven by 11-12% growth in Aviation, Ground Handling, and International Activities & Services, despite a slowdown in passenger growth at Frankfurt Airport. Higher airport fees and infrastructure charges contributed significantly to this growth. EBITDA also exceeded expectations by 3%, rising 9.7% yoy, with significant margin improvements in Aviation and Ground Handling. Retail & Real Estate underperformed due to stagnating real estate revenues and higher maintenance costs. Fraport's outlook for FY24 is for passenger numbers at the low end of the range of 61m to 65m, with EBITDA in the mid-range of EUR 1.26bn to EUR 1.36bn, representing 9% yoy growth. The strategy of prioritizing higher fees over passenger growth is paying off in the short term, but may need to be reconsidered once additional capacity comes online at Frankfurt in 2026. mwb research’s analysts reiterate their BUY recommendation with an unchanged price target of EUR 67.00. The full update can be downloaded under https://www.research-hub.de/companies/Fraport%20AG