Märkte & Kurse

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Original-Research: INDUS Holding AG - from NuWays AG

30.07.2024 / 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
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Classification of NuWays AG to INDUS Holding AG

     Company Name:               INDUS Holding AG
     ISIN:                       DE0006200108

     Reason for the research:    Update
     Recommendation:             BUY
     from:                       30.07.2024
     Target price:               EUR 36.00
     Last rating change:
     Analyst:                    Christian Sandherr

Muted Q2 preview due to difficult macro environment; chg. est.

Topic: INDUS will release its half year report on August 13th . We expect
top- and bottom-line of the second quarter to stay muted but above the
challenging Q1. However the outlook for H2 remains positive and thanks to
the recent share price decline, the stock is now even more of a bargain.

The macroeconomic headwinds and the associated customer reluctance put
pressure on the first quarter and improved only modestly in the second
quarter. Hence, we expect sales to come in at EUR 437m (-3.6% yoy) and EBIT at
EUR 32.1m (-20% yoy) with an EBIT margin of 7.3% (1.5pp).

While Materials benefited in the first half of FY23 from decreased raw
material prices, profitability should now revert to normality as the
portfolio companies lower their prices due to pricing pressure from
customers. This has already shown up in Q1 and led to an operating margin
decrease from 12.1% in FY23 to 8.0% in FY24. Further, business for
Material's largest portfolio company Betek (49% of segment sales in FY23) is
currently weak in the agricultural supply sector due to the conflict in
Ukraine. Therefore, we expect sales to decline 10% yoy to EUR 148m with an
EBIT of EUR 11.1m (-38% yoy; -3.4pp).

Sales in the Engineering segment are expected to increase by 6.1% yoy (eNuW)
to solid EUR 147m, however, with a slight pressure on margins due to an
unfavorable shift in the product mix (eNuW: EBIT EUR 8.8m, 6.0% margin, -1.5pp
yoy). Despite that, increasing sales and higher margins are expected in the
second half of the year.

The Infrastructure segment is also affected by the economic slowdown,
especially in the heat pump and for building supplies sector. We expect
sales to decline moderately by 5.2% to EUR 142m paired with a strong EBIT
margin of 9.5% (-0.1pp yoy) supported by significant efficiency improvement
at the HVAC manufacturer Aurora (eNuW EBIT: EUR 13.5m; -6.3% yoy).

Nevertheless, INDUS remains a clear BUY in our view as the company is (1)
trading at only 7x forward EV/EBIT (eNuW), (2) offers an expected dividend
yield of 5.2% (eNuW FY24e: EUR 1.2 per share), and (3) delivers a strong
FCFY24e of c. 10%.

Reiterate BUY with an unchanged PT of EUR 36, based on FCFY24e.

You can download the research here: http://www.more-ir.de/d/30313.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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1956509 30.07.2024 CET/CEST

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