Original-Research: Warimpex Finanz- und Beteiligungs AG (von East Value Resea...

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Original-Research: Warimpex Finanz- und Beteiligungs AG - from East Value

Research GmbH

25.04.2025 / 13:33 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 East Value Research GmbH to Warimpex Finanz- und

Beteiligungs AG

Company Name: Warimpex Finanz- und Beteiligungs AG

ISIN: AT0000827209

Reason for the research: Preview

Recommendation: BUY

from: 02.04.2025

Target price: EUR 1.14

Target price on sight of: 12 months

Last rating change:

Analyst: Adrian Kowollik

Based on our discussions with management, we believe that Warimpex' (WXF)

2024 results, which will be released on April 29, will be weaker on all

levels than we had previously forecast. Although it finally got rid of all

Russian assets in October 2024 and due to interest rate cuts in the Eurozone

and CEE the environment for real estate companies is getting better,

management believes that 2025E will be a transition year for the company.

Currently, the focus is on increasing occupancy rates and debt repayment.

Also, the company now plans to construct apartments on one of its land plots

in Cracow (Mogilska IV with c. 9,000 sqm, 10 min away from Cracow central

station), which is a booming city with c. 790,000 inhabitants and 2nd

highest sqm apartment prices in Poland (PLN 13,917 on average or EUR 3,314).

Construction activity related to the office projects in Cracow/Chopin

project and Darmstadt/West Yard has not started yet. Given a higher

peer-group-based fair value of EUR 0.68/share (prev. EUR 0.48), our new

12-months PT for Warimpex (50% NNNAV, 50% peer group) equals EUR 1.14

(previously: EUR 1). The main risk factor is the company's net gearing,

which despite being mostly related to long-term debt is still high.

Although we had previously accounted for the one-off loss of EUR 67.4m

related to the sale of Russian assets in October 2024 - in total 53,100 sqm,

c. 36% of WXF's Gross Asset Value until September 2024 - we have decided to

lower our 2024E estimates again by 10.2%-34.2% on revenue and EBITDA level.

They now equal EUR 21.9m (prev. EUR 24.4m) for revenues, EUR 1.8m (EUR 2.8m)

for EBITDA and EUR -82m (EUR -79.8m) for net income. We expect that due to

the negative effect from the one-off loss on equity net gearing as of 31

December 2024 amounted to 194.4% (31/12/2023: 174.4%).

We believe that the decision to build apartments on the Mogilska IV land

plot stems from the fact that apartments can be built and sold relatively

quickly (it usually takes c. 1.5 years to complete a residential real estate

project with a building permit). This would allow Warimpex to generate

significant cash, including from prepayments, which could be used for debt

repayment. Currently, WXF rents own office space in Cracow, Lodz and

Budapest and operates 1 hotel in Darmstadt (in the Intercontinental in

Warsaw, it owns a 50% stake). Warimpex wants to start construction of the

planned new office projects - Chopin in Cracow with c. 20,600 sqm and West

Yard in Darmstadt with c. 11,500 sqm, both already have a building permit -

as soon as market conditions improve.

You can download the research here: http://www.more-ir.de/d/32346.pdf

For additional information visit our website: https://eastvalueresearch.com/

Contact for questions:

Adrian Kowollik

Email: ak@eastvalueresearch.com

Tel.: 30 20609082

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2124556 25.04.2025 CET/CEST

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