MLP AG (FRA:MLP) Original-Research: MLP SE (von NuWays AG): BUY

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15/08/2024 09:02

Original-Research: MLP SE - from NuWays AG

15.08.2024 / 09:02 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS Group AG.
The issuer is solely responsible for the content of this research. The result of this research does not constitute investment advice or an invitation to conclude certain stock exchange transactions.

Classification of NuWays AG to MLP SE

Company Name:	MLP SE
ISIN:	DE0006569908

Reason for the research:	Update
Recommendation:	BUY
from:	15.08.2024
Target price:	EUR 11.50
Last rating change:
Analyst:	Henry Wendisch

Solid Q2 driven by wealth management and banking

Topic: Following preliminary EBIT results from 29th July (see update from 30th July), MLP provided more details with final Q2 results yesterday. Here's what's new:

Solid sales figures: Total revenues grew by 8.5% yoy to € 230m (H1: € 514m, +8% yoy), especially driven by market tailwinds in Wealth Mangement (+18% yoy; 39% of sales), Interest Income (+48% yoy; 10% of sales) and Real Estate Brokerage (+128% yoy; 4% of sales), which have offset the decline in Non-Life Insurance (-7% yoy; 15% of sales), while Old-Age Provision (+1% yoy; 22% of sales) and Health Insurance (+5% yoy; 6% of sales) have remained stable.
Non-life Insurance and Old-Age Provision temporarily muted: Albeit demand for occupational pension schemes at MLP's institutional clients has temporarily decreased due to investment restraints at SMEs, management expects a rebound in the next quarters. The current weakness in Non-Life Insurance stemmed from a discontinuation of lowmargin contracts, which temporarily burdens the top-line but should ultimately benefit the bottom-line going forward.
EBIT mix driven by banking, brokerage and wealth management: H1's EBIT showed a substantial improvement over H1'23 (+30% yoy to € 48.7m). Here, the main expansion drivers were similar to sales with banking (+30% yoy), brokerage (+229% yoy) and wealth management (+47% yoy). Especially the net interest income of € 28m (+26% yoy) in banking as well as performance fees of € 9.2m (+362% yoy) in wealth management conbtributed significantly to profitability and made up c. 76% of H1 EBIT. On the other hand, in RE development (i.e. Deutschland.Immobilien) H1 EBIT worsened to € -9m (vs. € 3m in H1'23) due to the near fullstop of projects.-
Real estate rebound ahead: While RE brokerage already saw a strong jump from low levels (Q2 sales +128% yoy and 176% qoq), RE development should have reached its low now and follow brokerage going foward. Here management expects a steady rise in sales in the next quarters, which should lead to a less negative EBIT in H2'24e and even a positive EBIT in FY'25e.
Improved KPIs on all fronts: Next to record sales and EBIT figures, MLP posted record AuMs of € 60.5bn (+7% yoy), a record non-life insurance volume of € 729m (+7% yoy) and a strong net liquidity of € 220m (vs. € 191m per Y/E'23), the latter explaining 35% of its market cap. -

All in all a solid release, showing that MLP is on track to outperform its guidance. By simply assuming last year's H2 EBIT (€ 37.2m excl. one-offs) for H2'24e, FY'24e EBIT would stand at € 86m, already above the specified guidance of € 80-85m. Furthermore, we expect EBIT to come in at € 90m, based on (1) a still strong net interest income, (2) higher AuMs and (3) less negative impacts from RE development expected for H2.

In our view, MLP shares remain highly attractive, trading at 16% adj. FCF yield, a 5.6% dividend yield and only on 5.3x EV/EBIT for FY'24e, while also being a well diversified and stable quality business. Therefore, we reiterate our BUY recommendation and MLP's position in our NuWays' AlphaList with an unchanged PT of € 11.50, based on FCFY'24e and SOTP

You can download the research here: http://www.more-ir.de/d/30493.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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