Study 16 November 2016, Analyst Henrik Markmann Recommendation: Buy, Price target: 9.00 Euro, Upside potential: [aktualisiert] +69 percent Share data:
Share price 5.66 Euro (XETRA)
Number of shares (in m) 9.51
Market cap. (in EUR m) 53.8
Enterprise Value (in EUR m) 48.5 Liquid portfolio trading at a significant discount to NAV Heliad Equity Partners GmbH & Co. KGaA is an investment company based in Frankfurt am Main. With an equity of some EUR 80m the company holds majority and minority stakes in small and medium-sized companies in the technology, internet, lifestyle & e- commerce sectors. Alongside private equity investments, the target companies can also be listed. Heliad, which is listed in the Entry Standard, can make investments according to the situation and without time restrictions, and offers investors a higher degree of transparency compared to classical investment funds. The investment portfolio is currently dominated by the 17% stake in listed FinTech Group AG, a financial service provider with activities in the German-speaking area (discount broker flatex, among others). This investment serves as an example that Heliad does not only assume the role of a passive investor but also actively contributes to the portfolio companies' value creation in the form of a "friendly activism". Regarding FinTech Group, Heliad did not only provide fresh capital for the acquisition of XCOM AG (software provider and outsourcing partner for the financial industry) but also actively accompanied the necessary due diligence process. As a follow-up, Thomas Hanke, the relevant investment manager, actively accompanied the portfolio company by joining FinTech Group AG for approximately one year as Head of Business Development & Investments, before returning to Heliad as CEO in April this year. In addition to this core investment, Heliad holds further stakes in leading e-commerce companies with an extremely dynamic top line development. The major private equity investments are
-- Springlane, the pure play market leader in e-commerce and digital content for kitchen & cooking,
-- Cubitabo, operator of the online mattress shop "Bettenriese.de", and
-- Alphapet Ventures, a leading premium provider of pet food and accessories. However, as the private equity investments only represent a small proportion of the assets (c. 13% on June 30, 2016) when compared to the listed investments, most of Heliad's assets are highly liquid and can be sold at their full book value. The significant price discount of [aktualisiert] 39% to the NAV (EUR 8.76 on September 30, 2016) makes the shares' pricing all the more inefficient in our view. A more appropriate discount applied to comparable holding companies would be between 10% and 20%. We assume that a major part of this valuation gap can be attributed to Heliad's IR work, which has been neglected so far. This gap is expected to be closed soon, since management intends to address the capital market to a stronger extent going forward. Conclusion: After Heliad's discount to the NAV has already been reduced from 70% to [aktualisiert] 39%, we expect that this process has not yet been completed and see further upside for the shares despite the significant price increase of the last years. Consequently, we initiate coverage of Heliad with a buy rating and a PT of EUR 9.00. Shareholder structure:
Free float 38.0%
FinLab AG 47.0%
IFOS 15.0% Valuation of the net asset value of Heliad Equity Partners: Core investment: Potential value (in EUR m)
FinTech Group AG: 70.2
Other assets, Fair value (in EUR m)
DEAG AG: 3.4
MagForce AG and MAX 21 AG: 6.9
Private Equity-Portfolio: 10.3
Net Cash (MONe): 4.7
Short-term loans and other: 11.8
= Net asset value: 107.3
/ Shares (in m): 9.5
= NAV per share (in EUR): 11.29
./. holding discount 20%
= Price target: 9.00 |
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