Original-Research: THE NAGA GROUP AG (von NuWays AG): Buy

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Original-Research: THE NAGA GROUP AG - from NuWays AG

05.11.2024 / 09:01 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.

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Classification of NuWays AG to THE NAGA GROUP AG

Company Name: THE NAGA GROUP AG

ISIN: DE000A161NR7

Reason for the research: Update

Recommendation: Buy

from: 05.11.2024

Target price: EUR 1.40

Target price on sight of: 12 months

Last rating change:

Analyst: Frederik Jarchow

Merger burdened H1 figures; Growth ahead; chg

Topic: Last week, NAGA reported unaudited figures for H1´24 that came in

weaker than expected on both top- and bottom line, mainly due to effects

related to the merger of NAGA and CAPEX. In detail:

Sales of EUR 31.6m (vs eNuW: EUR 33.8m) were below previous year´s pro forma

figures of EUR 36.0m. According to the company, this was the resulting from

the closure of loss-making non-core subsegments. This is reflected in lower

than anticipated avg. revenue per trade of only EUR 4.0 (vs EUR 5.0 pro forma in

H1´23 vs eNuW: EUR 4.5). Positively, trading activity increased to 7.9m

transactions (vs 7.2m pro forma in H1´23 vs eNuW: 7.5m).

EBITDA came in at EUR 2.6m, above previous year´s figures (EUR 1.5m pro forma in

H1´23), but below our expectations (eNuW: EUR 4.4m). The positive yoy

development is mainly driven by significant cost cutting, i.e. of sales

related expenses (EUR 6.2m vs EUR 8.7m pro forma H1´23 vs eNuW: EUR 6.3m),

personnel expenses (EUR 5.7m vs EUR 7.0m pro forma in H1´23 vs eNuW: EUR 6.0m) and

other operating costs (EUR 5.8m vs EUR 7.6m pro forma H1´23 vs eNuW: EUR 4.6m)

overcompensating for the weaker topline. Still, due to higher than

anticipated marketing expenses as well as lower other operating income and

sales, EBITDA fell short of expectations. EBT of EUR -4.1m (vs eNuW: EUR -2.4m),

is mainly burdened by regular D&A to the tune of EUR 5.5m and financing costs

of EUR 1.2m.

Despite the rather disappointing H1´24 figures, the outlook remained bright.

On the back of high marketing spendings in H1, the launch of the fully

integrated NAGA SuperApp within the Telegram ecosystem with more than 950m

user, as well as the cooperation with Borussia Dortmund, we expect a

significant sequential improvement in H2 that should result in EUR 67.5m in

sales and EUR 5.9m EBITDA in FY24, which is rather conservative and below the

internal plan of EUR 75m in sales and EUR 8.6m.

For FY26e, management plan to achieve EUR 129m and EUR 31m EBITDA, which looks

ambitious but not out of reach, yet below our current estimates of EUR 103m

sales and EUR 19m EBITDA). Keep in mind that an incremental positive change in

the sentiment could have an enormous effect on the P&L of NAGA.

BUY with a unchanged PT of EUR 1.40 based on DCF.

You can download the research here: http://www.more-ir.de/d/31179.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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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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2022269 05.11.2024 CET/CEST

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