M1 Kliniken AG

11.10.2018 - Equity Research Report (english) // buy

Research Note - M1 Kliniken AG - english

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Unternehmen: M1 Kliniken AG
Branche: Dienstleistungen
Rating: buy
Kurs bei Erstellung in €: 15,50
Kursziel in €: 19,00
Mögl. Interessenskonflikt gem. §34b Abs.1 WpHG und FinAnv: 5a;11

The half-year figures for M1 Kliniken AG are in line with our expectations. Both the 30% growth in revenue to EUR 28.93 million and an EBIT margin of 12.0% form an excellent basis for achieving our revenue and earnings forecast for 2018. We continue to view the location expansions that have been implemented as well as those that are expected as the biggest growth factor, which represents an extended basis for an increase in treatment capacities and trading revenues. With both of the locations that were newly added in the first half-year of 2018, the Company has more than 20 outpatient specialist centres and a clinic in Berlin. In the second half-year, more specialist centres are to be opened and a second specialist clinic location will be established in Essen. In addition, the Company is planning an international roll-out with the opening of a specialist centre in Austria. By the financial year 2020, we even see the number of locations rising to 50 as a realistic scenario. New treatment fields, such as the addition of laser treatments (hair removal, tattoo removal, etc.), are currently also in the pipeline and could contribute to further growth stimulus in the future.

The development of further revenue streams is currently being implemented, according to corporate specifications. Therefore, in the first quarter of 2018, the field of aesthetic dentistry was added to the service portfolio. This area is interesting, as there is a much higher demand here, with a similarly high price sensitivity among customers. Over the coming financial years, 10-15 dental locations are to be developed in Germany.

For the rapid implementation of the location expansion, M1 Kliniken AG recently suc-cessfully carried out a capital increase. After a total of 1 million shares were issued at a price of EUR 15.30, the gross issuing proceeds amounted to EUR 15.30 million. The newly raised capital should support the planned location expansion over the next financial years. According to our information, the total investment amount per specialist centre is in the low six-digit range respectively. Although dental clinics are accompanied by slightly higher levels of investment compared to specialist centres, we believe the newly acquired capital is sufficient in order to achieve the planned number of clinics.

In addition, the company will continue to push the commercial sector for the higher-margin own-brands for the retail segment. To this effect, the roll-out of the B2C business took place at the beginning of 2018, which sees care products sold online and in specialist centres under the brand name M1 Select ( The placement in stationary retail is planned for the medium term and should open up new sales potential out of this.

In our updated DCF model, we have also taken into consideration the capital increase that was carried out along with the associated slight dilutive effect. In contrast, due to the largely guaranteed financing of the location expansion, we have slightly increased the revenue momentum in the continuity phase of our valuation model to 9.0% (previously: 8.0%), which resulted in the target price increasing slightly to EUR 19.00 (previously: EUR 18.50). Based on the current share price of EUR 15.80, we are maintaining our BUY rating.


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