Ori­gi­nal-Re­se­arch: Co­reo AG (von GBC AG): BUY

Re­se­arch | 20 No­vem­ber 2023 00:00

Ori­gi­nal-Re­se­arch: Co­reo AG – from GBC AG

Clas­si­fi­ca­ti­on of GBC AG to Co­reo AG

Com­pa­ny Name: Co­reo AG

Re­ason for the re­se­arch: Re­se­arch Note
Re­com­men­da­ti­on: BUY
Tar­get pri­ce: EUR 1.00
Last ra­ting ch­an­ge:
Ana­lyst: Cos­min Fil­ker, Mar­cel Gold­mann

H1 2023: Lar­ge port­fo­lio ac­qui­si­ti­ons to come in 2024; EBIT break-even ex­pec­ted in 2024; pri­ce tar­get: € 1.00; ra­ting: BUY

In the first six months of 2023, Co­reo AG was able to in­crease ren­tal in­co­me to € 3.17 mil­li­on (pre­vious year: € 2.82 mil­li­on). As the­re were no pro­per­ty ad­di­ti­ons in both the 2022 fi­nan­cial year and the cur­rent 2023 fi­nan­cial year, the 12.7% in­crease in gross ren­tal in­co­me was achie­ved on the same pro­per­ty ba­sis. Port­fo­lio op­ti­mi­sa­ti­ons car­ri­ed out, such as the pro­per­ty han­do­ver in Kiel in the past 2022 fi­nan­cial year or the con­clu­si­on of a long-term ren­tal agree­ment with the city of Wetz­lar, have in­creased the re­ve­nue base, from which Co­reo AG be­ne­fi­ted in the first half of 2023. In ad­di­ti­on, va­can­ci­es were al­re­a­dy re­du­ced in the past fi­nan­cial year and rent in­crea­ses were im­ple­men­ted in some ca­ses. Ho­we­ver, part of the in­crease in gross rents is also due to the cur­rent mar­ket-re­la­ted rise in an­cil­la­ry cos­ts, which re­sul­ted in a si­gni­fi­cant in­crease in ad­van­ce ope­ra­ting cost pay­ments of 44.1% to € 0.84 mil­li­on (pre­vious year: € 0.59 mil­li­on).

To­tal ope­ra­ting cos­ts of € 3.10 mil­li­on (pre­vious year: € 3.04 mil­li­on) re­main­ed rough­ly at the pre­vious year’s le­vel. Wi­thin cos­ts, the cost of ma­te­ri­als in par­ti­cu­lar in­creased to € 1.79 mil­li­on (pre­vious year: € 1.29 mil­li­on). This was part­ly due to hig­her an­cil­la­ry ope­ra­ting cos­ts and part­ly due to main­ten­an­ce and mo­der­ni­sa­ti­on ex­pen­ses, which re­la­te in par­ti­cu­lar to the pro­per­ties in Wetz­lar, Del­men­horst and Göt­tin­gen. Ho­we­ver, the in­crease in the cost of ma­te­ri­als was off­set by a de­crease in per­son­nel ex­pen­ses and other ope­ra­ting ex­pen­ses (in­clu­ding lower le­gal and con­sul­ting cos­ts). At € ‑0.44 mil­li­on (pre­vious year: € ‑0.61 mil­li­on), EBIT in the first six months of 2023 was the­r­e­fo­re also hig­her than the pre­vious year’s fi­gu­re.

We have pre­pared our fo­re­casts on the ba­sis of the cur­rent pro­per­ty port­fo­lio. In ad­di­ti­on, we also as­su­me pro­per­ty ac­qui­si­ti­ons for the co­ming fi­nan­cial ye­ars, which will both have an im­pact on the company’s ren­tal in­co­me and, as part of the va­lue-crea­ting stra­tegy, re­sult in pos­si­ble va­lua­ti­on in­co­me.

In the first six months of 2023, Co­reo AG ge­ne­ra­ted gross ren­tal in­co­me of € 3.17 mil­li­on. With the ex­cep­ti­on of the sale of the 119 re­si­den­ti­al units in the ‚Ha­gen­weg‘ pro­per­ty, the pro­per­ty port­fo­lio is un­ch­an­ged for the se­cond half of 2023, mea­ning that com­pa­ra­ble gross ren­tal in­co­me is li­kely to be ge­ne­ra­ted in the se­cond half of the year. The loss of ren­tal in­co­me from ‚Ha­gen­weg‘ of around € 0.20 mil­li­on (GBC esti­ma­te) will be li­mi­t­ed, as this will not oc­cur un­til the fourth quar­ter of 2023. Com­pared to our pre­vious fo­re­cast (see fo­re­cast da­ted 14 July 2023), we are nevert­hel­ess ad­jus­ting the ex­pec­ted ren­tal in­co­me slight­ly more to € 6.12 mil­li­on (pre­vious­ly: € 6.53 mil­li­on).

This ad­jus­t­ment is pri­ma­ri­ly due to the de­lay in the purcha­se of the Hagen/Rostock port­fo­lio, for which the purcha­se pri­ce (to­tal in­vest­ment vo­lu­me: € 2.5 mil­li­on) has al­re­a­dy been fi­na­li­sed. We had pre­vious­ly ex­pec­ted to ac­qui­re the pro­per­ty in the se­cond half of 2023. As things stand, ho­we­ver, the pro­per­ty will not be ac­qui­red un­til the co­ming fi­nan­cial year. In ad­di­ti­on, the trans­fer of the Spree-Ost port­fo­lio, for which a purcha­se agree­ment has been in place sin­ce 2021, is plan­ned for the co­ming 2024 fi­nan­cial year. This port­fo­lio com­pri­ses 1,341 flats and 15 com­mer­cial units and, as the lar­gest ac­qui­si­ti­on in Coreo’s histo­ry, would have a si­gni­fi­cant im­pact on the company’s re­ve­nue and ear­nings per­for­mance. As a pre­cau­tio­na­ry me­a­su­re, we have post­po­ned the ac­qui­si­ti­on date to the se­cond half of 2024 (pre­vious­ly: first half of 2024) and are the­r­e­fo­re also re­du­cing the ex­pec­ted ren­tal in­co­me for 2024 to € 8.22 mil­li­on (pre­vious­ly: € 9.56 mil­li­on). This ef­fect is not re­le­vant for the 2025 fi­nan­cial year; the lower ex­pec­ted ren­tal in­co­me of € 12.15 mil­li­on
(pre­vious­ly: € 12.36 mil­li­on) ex­pec­ted in this fi­nan­cial year is so­le­ly a re­sult of the sale of ‚Ha­gen­weg‘.

The book loss of € 0.61 mil­li­on from the sale of the pro­per­ties on ‚Ha­gen­weg‘ in Göt­tin­gen was re­co­g­nis­ed in full in the first half of 2023, mea­ning that no fur­ther ne­ga­ti­ve ef­fects are ex­pec­ted for the se­cond half of the year. In our pre­vious fo­re­casts, we did not an­ti­ci­pa­te any va­lua­ti­on los­ses; on the con­tra­ry, we as­su­med va­lua­ti­on gains due to the in­vest­ments in the exis­ting port­fo­lio. In the up­dated fo­re­cast, we have ta­ken into ac­count both the book loss and con­ser­va­tively as­su­med slight­ly lower book gains on the exis­ting port­fo­lio. Ac­cor­din­gly, the com­pa­ny should re­port a ne­ga­ti­ve EBIT of € ‑0.12 mil­li­on in the cur­rent 2023 fi­nan­cial year (pre­vious­ly: € 2.18 mil­li­on). With the ex­pec­ted strong in­crease in ren­tal in­co­me, in par­ti­cu­lar due to the ad­di­ti­on of the two al­re­a­dy fi­xed port­fo­li­os, EBIT break-even should be achie­ved sus­tain­ab­ly from the co­ming 2024 fi­nan­cial year.

As part of our DCF va­lua­ti­on mo­del, we have de­ter­mi­ned a new pri­ce tar­get of € 1.00 (pre­vious­ly: € 1.30). The pri­ce tar­get re­duc­tion is so­le­ly a con­se­quence of the fo­re­cast ad­jus­t­ment. We con­ti­nue to as­sign a BUY ra­ting.

Die voll­stän­di­ge Ana­ly­se kön­nen Sie hier down­loa­den:

Kon­takt für Rück­fra­gen
Hal­der­stras­se 27
86150 Augs­burg
0821241133 0
Of­fen­le­gung mög­li­cher In­ter­es­sens­kon­flik­te nach § 85 WpHG und Art. 20 MAR Beim oben ana­ly­sier­ten Un­ter­neh­men ist fol­gen­der mög­li­cher In­ter­es­sen­kon­flikt ge­ge­ben: (5a,6a,11); Ei­nen Ka­ta­log mög­li­cher In­ter­es­sen­kon­flik­te fin­den Sie un­ter: http://​www​.gbc​-ag​.de/​d​e​/​O​f​f​e​n​l​e​g​ung
Date and time com­ple­ti­on (ger­man): 17.11.23 (07:55 am)
Date and time first dis­tri­bu­ti­on (ger­man): 17.11.23 (10:30 am)
Date and time com­ple­ti­on (eng­lish): 20.11.23 (08:02 am)
Date and time first dis­tri­bu­ti­on (eng­lish): 20.11.23 (10:00 am)

——————-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.



Hal­der­stra­ße 27
86150 Augs­burg

Pho­ne: +49 821 241133–0
E‑mail: office(@)gbc-ag.de

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