Original-Research: DEMIRE AG (von NuWays AG): BUY

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Original-Research: DEMIRE AG - from NuWays AG

24.02.2025 / 09:25 CET/CEST

Dissemination of a Research, transmitted by EQS News - a service of EQS

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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: 24.02.2025

Target price: EUR 15.00

Target price on sight of: 12 months

Last rating change:

Analyst: Philipp Sennewald

What's ahead in FY25e after successful refinancing? Chg.

Topic: Following the successful refinancing of DEMIRE's EUR 600m corporate

bond (EUR 499m outstanding notional) in Q4'24, we take a look at the company's

prospects for FY25e and beyond.

Mind you, that the bond was extended until YE'27 with an increased cash

coupon of 5% as well as a 3% PIK coupon in 2027. Moreover, the refinancing

framework obliges DEMIRE to reduce the outstanding notional, which stands at

EUR 253m following a tender for EUR 50m at par and a tender for EUR 196m at

76.25%, by another EUR 50m in FY25e and '26e respectively. Otherwise, the

company would have to pay a penalty fee of 3% in FY25e and 2% in FY26e.

We hence expect management to dispose further assets in the course of the

year (eNuW: EUR 89m GAV) as well as next year (eNuW: EUR 43m GAV). In our view

the company is likely going to sell several smaller to mid-sized assets

(eNuW: EUR 10-40m GAV each) at a maximum discount of 5%. The latter should

hereby be seen as conservative given easing market conditions in the real

estate sector, hence providing a certain upside to our estimates.

As a result of the ongoing disposals, we expect rental income to reduce to EUR

56.0m in FY25e and EUR 52.3m in FY26e. Besides the reduced asset base, the

high share of CPI-linked rental contracts is seen to have a positive effect

while the increasing number of insolvencies and thus a higher vacancy will

have the opposite effect. On the bottom line, FFO is seen to come down to EUR

17.1m this year and EUR 16.1m in the following driven by the same effects.

On a positive note, the targeted CapEx measures are set to improve the

attractiveness of the portfolio to tenants, potentially improving WAULT and

vacancy. Moreover, the company currently has no incremental financing needs

thanks to the refinancing and operating cash generation.

Against this backdrop, current valuation remains undemanding as the stock is

trading on a 76% discount to its NAV. We hence maintain our BUY

recommendation with an unchanged PT of EUR 1.50 based on our NAV model.

You can download the research here: http://www.more-ir.de/d/31833.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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2090305 24.02.2025 CET/CEST

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