Märkte & Kurse

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Original-Research: UBM Development AG - from NuWays AG

Classification of NuWays AG to UBM Development AG

Company Name: UBM Development AG
ISIN: AT0000815402

Reason for the research: Update
Recommendation: Kaufen
from: 30.05.2024
Target price: EUR 27.00
Target price on sight of: 12 Monaten
Last rating change: 
Analyst: Philipp Sennewald

Market reopening still pending / chg.
 
Yesterday, UBM released muted Q1 results following the continued standstill
on the European real estate transaction market. Yet, the company was able
to dispose some smaller non-strategic assets.
 
Q1 sales increased on a low level by 14% yoy to EUR 20.4m (eNuW: EUR 25m) and
were predominantly driven by the progress on construction of previously
sold projects, which are recognized over time based on the percentage of
completion. Q1 EBITDA decreased yoy and came in at EUR -2.2m. The decline can
be mainly attributed to an increase in material expenses, mainly related to
construction costs, as well as slightly higher other OpEx, which was mainly
due to unfavorable FX-effects.
 
On a positive note, the company had a promising start to the year regarding
the disposal of non-strategic assets. In fact, UBM sold five slots of the
Arcus City to a Czech construction company, one building of the Poleczki
Business Park to Porr as well as a 15% stake of the Andaz hotel in Prague
to IGO, which now holds a 40% overall stake. While no further details were
disclosed, the net cash inflow from the transaction should amount to c. EUR
25m (eNuW). Overall, management is in advanced negotiations to sell further
non-strategic assets as it targets a total net volume of EUR 75m in FY '24e.
Importantly, no disposal was made below book value, which has to be seen as
a clear hint that the trough has been reached.
 
Despite this, management provided a rather conservative outlook for FY '24e
as it is expecting a pre-tax loss (eNuW new: EUR -7.7m), which is however
expected to be an improvement compared to FY '23 (EUR -39m). Given that a
sudden reopening of the market is still not in sight, we, however, regard
this as reasonable despite the positive trends mentioned above.
 
All in all, we continue to consider UBM to be well positioned for the
pending reopening of the transaction market, given its appealing product
offering, which is focussed on sustainable real estate projects. In fact,
as of Q1, 77% of the company's EUR 1.9bn 4-year pro-rata pipeline consists of
timber-hybrid projects, which do not only significantly reduce the carbon
emissions but also offer cost advantages due to the modular and serial
construction. We hence expect UBM's projects to be meet strong demand once
the market reopens, as investors become increasingly under pressure to
comply with the EU taxonomy.
 
The stock remains a BUY, new PT of EUR 27.00 based on DDM.

You can download the research here:
http://www.more-ir.de/d/29931.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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