Original-Research: INDUS Holding AG (von NuWays AG): BUY

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Original-Research: INDUS Holding AG - from NuWays AG

26.09.2024 / 09:01 CET/CEST

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

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Classification of NuWays AG to INDUS Holding AG

Company Name: INDUS Holding AG

ISIN: DE0006200108

Reason for the research: Update

Recommendation: BUY

from: 26.09.2024

Target price: EUR 34.00

Last rating change:

Analyst: Christian Sandherr

New value accretive deals should fuel long-term growth

Topic: INDUS is working at full speed on its well filled M&A pipeline and

closed already five deals during this year. We take the opportunity to give

more granularity on the case and particularly on INDUS's acquisition side

and the recent operating development. We continue to like the stock and keep

INDUS on our Alpha list.

More value accretive deals in the pipeline: At the end of August, INDUS

announced the acquisition of DECKMA, a system supplier of technical marine

equipment. The company generates c. EUR 19m in revenue and should deliver low

double-digit EBIT margins (eNuW). With a transaction multiple of c. 6x EV/

EBIT and considerable growth opportunities ahead, the acquisition should be

value accretive in our view. Further, INDUS has spent only EUR 31.5m (eNuW) on

M&A this year, which leaves room for further acquisitions. Mind you, the

company intends to spend up to EUR 70m on portfolio additions this year alone.

Due to the decline in valuation multiples of German SMEs in recent years,

management is confident to meet their targets. In fact, several

opportunities should be in advanced stages.

More deals should come in the long run: About one third of SME owners in

Germany is 60 years or older and as the boomer generation is successively

leaving their businesses and searching for successors, more opportunities

should arise. Importantly, thanks to INDUS' positive brand perception, the

company is seen to be a preferred partner for successions, as soft factors

such as safeguarding jobs and maintaining the reputation are often equally

important as the purchase price.

Attractive valuation: Even though the upcoming quarters will still be

influenced by a challenging macroeconomic environment, the capital market is

in our opinion overreacting to the recent guidance cut (company news: July

31st) and the temporary weakness, neglecting the long-term operative

performance and currently depressed valuation of the stock.

Hence, the stock is trading at only 7x forward P/E (eNuW), offers an

expected dividend yield of 5.4% (eNuW FY24e: EUR 1.2 per share), and delivers

a strong FCFY24e of c. 10% (eNuW). We reiterate BUY with an unchanged PT of

EUR 34, based on FCFY24e

You can download the research here: http://www.more-ir.de/d/30893.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

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1995907 26.09.2024 CET/CEST

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