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 € 52.80 million (previous year: € 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 € 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 € 4.00 million (previous year: € 13.10 million) was € 13.10 million (previous year: € 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 € 9.10 million (previous year: € 3.90 million). This significant increase in earnings was mainly due to the decline in customer acquisition costs relating to the Smartbroker (approx. € 4.0 million in 2022 vs. € 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 € 54.0 million to € 57.0 million, operating EBITDA € 10.0 million to € 12.0 million). Our revenue (€ 62.33 million) and earnings (EBITDA of € 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 € 18.70 million (previous year: € 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 € 9.20 billion (previous year: € 8.80 billion).  
Furthermore, in the traditional business (media/portal business), segment revenues of € 34.10 million were almost stable compared to the previous year (PY: € 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 € 51.0 million and € 56.0 million and an EBITDA (operating EBITDA) adjusted for new customer acquisition costs of between € 1.0 million and € 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 € 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 € 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 € 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 € 52.70 million (previously: € 84.02 million) and an EBITDA of € 1.04 million (previously: € 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 € 66.75 million (previously: € 98.57 million) and EBITDA of € 13.97 million (previously: € 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 € 76.30 million and € 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 € 17.70 (previously: € 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.-------------------

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