THE NAGA GROUP AG Original-Research: The NAGA Group AG (von GBC AG): BUY

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14/01/2021 10:01

Original-Research: The NAGA Group AG - von GBC AG

Einstufung von GBC AG zu The NAGA Group AG

Unternehmen: The NAGA Group AG
ISIN: DE000A161NR7

Anlass der Studie: Research Comment
Empfehlung: BUY
Kursziel: 7.03 EUR
Kursziel auf Sicht von: 31.12.2021
Letzte Ratingänderung:
Analyst: Cosmin Filker

High growth momentum achieved in 2020; guidance for 2021 clearly above our expectations; price target raised to EUR7.03 (previously: EUR4.30); BUY rating

As expected, the preliminary figures of The NAGA Group AG (NAGA for short) for the past financial year 2020 were characterised by very high growth dynamic. Revenues of EUR25.9 million (PY: EUR6.22 million) were significantly above the previous year's figure and slightly above our revenue estimate last published in December 2020 (GBC forecast: EUR24.9 million).

In addition to the generally favourable market environment characterised by high volatility and thus high transaction activity, the implemented focusing and restructuring of NAGA has borne fruit. In 2019, the focus on the core business of online brokerage was implemented and the corresponding marketing activities for the main product Naga Trader were strengthened. The trading volume improved significantly to EUR120 billion (previous year: EUR44 billion) and the number of transactions to 6.3 million (previous year: 2.9 million). Despite the increased marketing activities, NAGA was able to achieve a respectable EBITDA margin of over 23% with an EBITDA of around EUR6.0 million (previous year: EUR-12.18 million). The preliminary EBITDA is just below our previous forecasts (GBC forecast: EUR 6.49 million).

By contrast, the new NAGA guidance for the current financial year 2021 is significantly above our expectations. The continued global marketing of Naga Trader and even more intensive sales and marketing activities are expected to generate revenues in a range of EUR 50 - 52 million in the current financial year. It is also planned to push ahead with global expansion with the planned market entry in Australia and South America. In addition, the further improvement of the platform quality and customer support should keep the customer churn rate low. Despite these measures, scaling effects should lead to a further improvement in profitability. According to the new guidance, EBITDA is expected to be in a range of EUR 13 - 15 million.

Our forecasts published in the last research study (see study dated 07.12.2020) are noticeably below the updated company guidance. We are raising our revenue forecast to EUR 51.00 million (previously: EUR 37.34 million) and our EBITDA estimate to EUR 14.37 million (previously: EUR 11.43 million) in each case. As a result of the higher basis, we now assume revenues of EUR 61.20 million (previously: EUR 43.87 million) and EBITDA of EUR 17.84 million (previously: EUR 14.16 million) for 2022.

As a result of the adjusted DCF valuation model, the target price has been increased significantly to EUR 7.03 (previously: EUR 4.30). Despite the significant increase in the NAGA share price, which has increased more than six-fold in the calendar year 2020, there is still a high share price potential. Based on the current price level of EUR 4.12 per share, we therefore continue to assign a BUY rating.

Die vollständige Analyse können Sie hier downloaden:

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Halderstrasse 27
86150 Augsburg
0821 / 241133 0
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Date (time) completion: 13/01/21 (4:25 pm) Date (time) first transmission: 14/01/21 (10:00 am)

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