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Original-Research: Smartbroker Holding AG - von GBC AG

Einstufung von GBC AG zu Smartbroker Holding AG

Unternehmen: Smartbroker Holding AG

ISIN: DE000A2GS609

Anlass der Studie: Research study (Anno)

Empfehlung: BUY

Kursziel: 17.70 EUR

Letzte Ratingänderung:

Analyst: Marcel Goldmann, Cosmin Filker

FY 2022 closed with robust business performance and realignment of fintech

business; Smartbroker relaunch should provide significant revenue and

earnings growth going forward; forecasts and target price lowered; Buy

rating maintained

Business development in the past financial year 2022

On 16 March 2022, Smartbroker Holding AG (Smartbroker) announced its

preliminary business figures for the past financial year 2022. According to

these figures, the group was able to close the past financial year with an

increase in HGB turnover of 9.5% to EUR 52.80 million (previous year: EUR 48.20

million) despite a difficult market environment.

Compared to the pro forma

revenue (pro forma consolidation of Smartbroker AG, formerly

wallstreet:online capital AG, as of 1 January 2022, instead of regular HGB

consolidation as of 1 August 2022) of the previous year in the amount of EUR

56.80 million, however, there was a moderate decline in revenue.

At the earnings level, EBITDA adjusted for new customer acquisition costs

for Smartbroker of around EUR 4.00 million (previous year: EUR 13.10 million)

was EUR 13.10 million (previous year: EUR 17.10 million), which fell by 25.1%

compared to the previous year.

Despite the continued high investments in the development and expansion of

the brokerage business, which, in addition to development costs incurred,

primarily related to marketing and personnel and the completed realignment

of the fintech division, EBITDA after customer acquisition costs rose

significantly to EUR 9.10 million (previous year: EUR 3.90 million). This

significant increase in earnings was mainly due to the decline in customer

acquisition costs relating to the Smartbroker (approx. EUR 4.0 million in

2022 vs. EUR 13.1 million in 2021).

All in all, the company fell slightly short of the target corridor of the

guidance adjusted in August 2022 (revenue EUR 54.0 million to EUR 57.0 million,

operating EBITDA EUR 10.0 million to EUR 12.0 million). Our revenue (EUR 62.33

million) and earnings (EBITDA of EUR 10.04 million) forecast was not

achieved, in particular due to the postponement of the Smartbroker

relaunch. Our estimates were still made on the basis of a Smartbroker 2.0

market launch in 2022.

The moderate decline in Group revenue resulted in particular from a

declining business volume in the transaction business. In this business

area, segment revenues fell by 12.0% to EUR 18.70 million (previous year: EUR

21.30 million) compared to the previous year, mainly due to a decline in

trading activity (18 trades in 2022 vs. 29 trades in 2021 per customer) of

brokerage customers.

On the other hand, despite a reduced marketing budget and historically

difficult capital market conditions, the company was again able to increase

the number of securities accounts managed to 267,000 by the end of 2022

(previous year: 246,000 accounts). In the same period, the assets under

custody grew to EUR 9.20 billion (previous year: EUR 8.80 billion).

Furthermore, in the traditional business (media/portal business), segment

revenues of EUR 34.10 million were almost stable compared to the previous

year (PY: EUR 35.50 million). In our opinion, long-term contracts with

financial institutions, advertising agencies and the B2B software business

(ARIVA.DE AG) contributed to this robust development. In addition,

according to the company, the precise targeting of the portals on

above-average attractive readers also led to a stable business development.

Smartbroker Group outlook for the 2023 financial year

The Smartbroker management is positive about the current 2023 financial

year. The company expects a consolidated turnover of between EUR 51.0 million

and EUR 56.0 million and an EBITDA (operating EBITDA) adjusted for new

customer acquisition costs of between EUR 1.0 million and EUR 4.0 million. An

even better operating earnings outlook is countered by the extensive costs

expected by the management for the development of the Smartbroker 2.0 and

additional migration costs (planned for the second half of 2023).

At the end of 2022, Smartbroker announced that it would cooperate with

Baader Bank for the transaction processing and the custody account

management for Smartbroker 2.0 going forward. In addition, the development

work for Smartbroker 2.0 has progressed according to plan in recent months.

The company expects further investments of around EUR 6.0 million in the

current year in order to complete the Smartbroker 2.0 project, which is

currently being implemented, and is fully financed for this purpose. Gross

cash holdings amounted to more than EUR 27.0 million at the end of 2022.

The relaunch of the Smartbroker is planned for mid-2023. After the

scheduled reduction of marketing expenses for the current year 2023

(planned marketing expenses of EUR 2.0 million), the Group intends to ramp up

new customer marketing again afterwards. The migration of existing

Smartbroker customers to the new infrastructure is scheduled to begin

shortly after the product launch in summer 2023. According to the company,

the realignment of the transaction business should contribute to the

Smartbroker becoming the group's main profitable growth driver from 2024.

GBC assessment and evaluation

Based on the postponement of the Smartbroker 2.0 introduction and the

realignment of the brokerage business (change of partner bank, etc.), we

are adjusting our previous estimates for the current financial year and

also doing so for the following years. Against the background of the

current difficult market environment, we have deliberately chosen our new

estimates conservative.

For the current financial year 2023, we now expect revenues of EUR 52.70

million (previously: EUR 84.02 million) and an EBITDA of EUR 1.04 million

(previously: EUR 14.05 million) and are thus at the lower end of the forecast

range communicated by the company. For the following financial year 2024,

we calculate revenues of EUR 66.75 million (previously: EUR 98.57 million) and

EBITDA of EUR 13.97 million (previously: EUR 28.73 million). In the 2025

financial year, which we have included in our detailed estimation period

for the first time, revenue and EBITDA should continue to increase to EUR

76.30 million and EUR 20.68 million respectively.

Overall, we continue to see the Smartbroker Group well positioned to expand

its market position in both business segments (Portal Business, Brokerage

Business). The planned introduction of Smartbroker 2.0 (including apps and

product enhancements) should significantly increase the company's future

growth momentum from the 2024 financial year onwards. Due to the high

scalability of the brokerage business model, the expected growth in

earnings should also lead to a disproportionate increase in Group

profitability.

Based on our lowered estimates, we have also lowered our previous target

price to EUR 17.70 (previously: EUR 37.55 per share) within the framework of

our DCF valuation model. In addition to the reduced forecasts, the rise in

the cost of capital as a result of the increase in the risk-free interest

rate (from 0.40% to now 1.50%) has led to a price target reduction. In view

of the current share price level, we thus continue to assign a 'Buy' rating

and see significant share price potential.

Die vollständige Analyse können Sie hier downloaden:

http://www.more-ir.de/d/26641.pdf

Kontakt für Rückfragen

GBC AG

Halderstraße 27

86150 Augsburg

0821 / 241133 0

research@gbc-ag.de

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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,5b,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter:

http://www.gbc-ag.de/de/Offenlegung

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Datum und Zeitpunkt der Fertigstellung der Studie: 27.03.2023 (9:00 Uhr)

Datum und Zeitpunkt der ersten Weitergabe: 27.03.2023 (10:30 Uhr)

Gültigkeit des Kursziels: bis max. 31.12.2023

-------------------übermittelt durch die EQS Group AG.-------------------

Für den Inhalt der Mitteilung bzw. Research ist alleine der Herausgeber bzw.

Ersteller der Studie verantwortlich. Diese Meldung ist keine Anlageberatung

oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.

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