JDC Group AG
08.05.2017 - Equity Research Einzelstudie // kaufen
Research Report Anno - JDC Group AG
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ISIN: DE000A0B9N37
Branche: Dienstleistungen
Rating: kaufen
Kurs bei Erstellung in €: 6,58
Kursziel in €: 10,25
Mögl. Interessenskonflikt gem. §34b Abs.1 WpHG und FinAnv: 5a;11
Basis laid for dynamic and high-margin growth in 2016; Digitalization strategy boosted; Target price increased
In the past financial year 2016, JDC Group AG has laid the foundation for the future growth of the business. As an important part of this, the introduction of the “allesmeins” app has connected the traditional advisory business with the FinTech market. In addition, in response to the tendency for consolidation on the financial intermediaries market and the increasing attractiveness of the FinTech and InsureTech areas, various acquisitions were made to the portfolio. As well as the acquisition of part of Aon’s private customer business, the online comparison platform “Geld.de” has also been acquired.
The initial positive effects from the implementation of the business strategy only began to be seen in the fourth quarter of 2016, when a significant growth in revenue of 17.8% was achieved compared to the same quarter of the previous year. At the overall annual level, JDC Group AG achieved revenue of €78.05 million (previous year: €75.70 million), an increase of 3.1%. However, because they took place over the course of the year, the additions to the portfolio are only included pro-rata.
Of particular note is the clear improvement in profitability, with an above-average EBITDA increase to €2.72 million (previous year: €1.28 million) and an improvement in the EBITDA margin to 3.5% (previous year: 1.7%). This significant improvement in earnings results primarily from the revenue of the acquired business for which there was no broker and therefore no commission expenses involved. Adjusted for transaction costs and one-off effects amounting to €0.5 million, the earnings achieved by the Company would have been even better.
Our revenue and earnings forecasts take account of the initial year-round effect of new portfolio acquisitions made in the past financial year, which, from the current perspective, produces a highly positive upside potential for revenue and earnings performance. In addition to this base effect, the digitisation strategy is particularly worthy of mention as it allowed new customer groups to be reached and cross-selling potential to be raised with existing customers. There are also plans to modernise the “Geld.de” platform and expand its product spectrum. The other part of the digitisation strategy worth highlighting is the addition of Stefan Bachmann, a former Google manager, to the Executive Board. At Google Germany, he was responsible for the entire banking industry and the FinTech and InsureTech areas. The Company should therefore gain particular benefits here in the marketing of digital financial products.
In line with the Company’s guidance, for the current financial year, 2017, we expect a significant increase in dynamic revenue growth, which is likely to continue in the coming financial years in accordance with the corporate strategy described above. As a significant portion of future revenue growth should originate from the expansion of the direct, and therefore high-margin, end-customer business, we expect an above-average increase in EBITDA. Up to financial year 2019, we expect an EBITDA margin of 9.6%, using this as the basis for our DCF valuation model (2016: 3.5%).
On this basis, we have updated our DCF valuation model and determined a new target price of €10.25 per share (previously: €8.40). The increase in the target price is a result of the initial inclusion of the higher 2019 forecasts, and can also be attributed to a roll-over effect. Based on the current share price of €6.58, there is a price potential of 55.8% so we are giving a BUY rating.
Wichtiger Hinweis:
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