Original-Research: Coreo AG - von GBC AG

Einstufung von GBC AG zu Coreo AG

Unternehmen: Coreo AG

Anlass der Studie: Research Note
Empfehlung: Buy
Kursziel: 2.60 EUR
Kursziel auf Sicht von: 31.12.2022
Letzte Ratingänderung:
Analyst: Cosmin Filker; Marcel Goldmann

1H 2021: earnings improvement due to higher rental income and sale of
properties; slight increase in 2021 forecasts; price target and rating

As we expected, Coreo AG increased rental income to EUR1.93 million in the
first six months of 2021 (previous year: EUR1.55 million). The increase in
rental income is primarily attributable to the addition of the NRW
portfolio in the first half of 2020, which was only included on a pro rata
basis in the prior-year period. In addition, the company achieved letting
successes with the Hydra portfolio and did not record any corona-related
rental losses overall. The increase in rental income was accompanied on
the one hand by a slight decline in absolute terms in net income from
disposals of EUR0.31 million (previous year: EUR0.49 million) and on the
other hand by a visible increase in the valuation result to EUR0.78 million
(previous year: EUR0.00 million). With this significantly increased
earnings base, Coreo AG was able to increase EBIT to EUR 0.50 million
(previous year: EUR -0.10 million) and thus report positive EBIT on a half-
year basis for the first time.

In our last research study (see study dated August 19, 2021), we explained
the basis for our forecasts, which we believe remain valid. On the one
hand, the company is likely to generate an increase in rental income from
its current property portfolio. As a further aspect of earnings
development, we have assumed possible proceeds from disposals in particular
from the planned sale of properties in the Göttingen portfolio and from
partial sales of the properties in Lünen and Gelsenkirchen held directly by
Coreo AG.

However, we had not planned for the sale of two properties in the Hydra
portfolio (Hanau, Darmstadt) and one property in the Mannheim portfolio,
for which purchase agreements have already been concluded and which were
therefore reclassified as 'held for sale'. We are therefore raising our
expected disposal proceeds for 2021 significantly to EUR12.87m and expect a
disposal result of EUR2.13m (previously: EUR1.52m). However, the sale of
the properties will be accompanied by a significant inflow of liquidity,
which will significantly increase the financial scope for further

According to our estimates, Coreo AG had acquired properties with a volume
of around EUR59m by the time our last research study was published. For the
remainder of the financial year, we had assumed further property
acquisitions of EUR10m. With the acquisition of a logistics property in
Delmenhorst announced on 7 September 2021, a significant part of this
assumption is now likely to have become reality. On a total rental area of
approx. 29,900 sqm, the annual rent distributed among several tenants
currently amounts to around EUR 0.5 million. No statement was made
regarding the purchase price. Assuming a typical multiple of 10 to 12.5 for
Coreo AG, the purchase price is likely to be between EUR 5.00 to 6.25

While we are raising our 2021 forecasts for proceeds from disposals and net
income from disposals as well as rental income, we are assuming lower
valuation income of EUR2.30 million (previously: EUR5.30 million). This is
particularly the case in light of the fact that the largest transaction in
the company's history will not be completed until the coming financial year
2022. Accordingly, we now expect EBIT of EUR 2.93 million (previously: EUR
4.92 million) and after-tax earnings of EUR 0.32 million (previously: EUR
1.82 million) for the current fiscal year 2021. The forecasts for the
following years remain unchanged.

As the lower earnings forecasts for 2021 are merely a consequence of lower
valuation income, there are only marginal changes in the DCF valuation
result. This is because the valuation gains have no impact on the cash
flow, which forms the basis for our DCF valuation model. We therefore
confirm our price target of EUR2.60 and maintain our BUY rating unchanged.

Die vollständige Analyse können Sie hier downloaden:

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Date (time) completion: 01.10.21 (12:08 pm)
Date (time) first distribution: 04.10.21 (9:30 am)

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