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Original-Research: DEMIRE AG - from NuWays AG
21.03.2025 / 09:02 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group.
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.
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Classification of NuWays AG to DEMIRE AG
Company Name: DEMIRE AG
ISIN: DE000A0XFSF0
Reason for the research: Update
Recommendation: Buy
from: 21.03.2025
Target price: EUR 1.30
Target price on sight of: 12 months
Last rating change:
Analyst: Philipp Sennewald
Softer profitability in FY25 and going forward; chg.
Topic: DEMIRE released FY24 results, showing rental income in line with our
estimates but FFO weaker than expected. Further, the new outlook also
reflects softening profitability. In detail:
FY24 rental income decreased by 16.9% yoy to EUR 65.3m (eNuW: EUR 66.1m). The
decline was mainly driven by the disposals of the "LogPark Leipzig" (EUR 7.8m
effect on annualized rent) as well as the deconsolidation of the "LIMES"
portfolio (EUR 9.7m effect). Overall, the company was able to achieve record
high asset disposals to the tune of EUR 110m (6% below BV).
FY24 FFO came in at EUR 23.8m, down 36.4% yoy and also clearly behind our
estimate of EUR 28.4m. The gap to our estimate is mainly explained by a weaker
than expected NOI margin (-5.1pp yoy) as well as higher admin and other
operating expenses. The latter were mainly affected by legal and advisory
fees connected to the bond restructuring while regular other OpEx remained
stable.
Vacancy levels remain an issue at DEMIRE, as the vacancy rate increased bei
2pp to 15.1%, mainly driven by the insolvency of meinReal and Deutsche
Telekom partly vacating an asset in Darmstadt. Going forward, management
reiterated that improving the vacancy levels is on of the key strategic
targets, while not providing a specifc target for FY25. In our view, a
reduction to 12-13% should be seen as a success, while in the mid-term
levels of <10% should be the target.
On a positive note, the company was able to improve its LTV ratio by 6.3pp
to 51.0% following the successful refinancing of the corporate bond, partly
below par, as well as several asset disposals. Going forward, we expect
further improvement given continued deleveraging in accordance with the
refinancing agreement.
FY25 outlook. With the release, management also provided a guidance for
FY25, targeting rental income of EUR 51-53m (eNuW new: EUR 54.1m) and an FFO of
EUR 3.5-5.5m (eNuW new: EUR 4.5m). The new guidance appears sensible in our
view, given annualized contracted rent of EUR 56.4m as of FY24.
Despite the mixed release and muted outlook, the stock remains undervalued,
in our view, given a current NAV discount of 65%. We hence reiterate our BUY
recommendation but reduce our PT to EUR 1.30 (old: EUR 1.50) based on our NAV
model.
You can download the research here: http://www.more-ir.de/d/32038.pdf
For additional information visit our website:
https://www.nuways-ag.com/research-feed
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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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss
bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben
analysierten Unternehmen befinden sich in der vollständigen Analyse.
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2104162 21.03.2025 CET/CEST
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