Original-Research: JDC Group AG (von GBC AG): BUY

Original-Research: JDC Group AG - von GBC AG

Einstufung von GBC AG zu JDC Group AG

Unternehmen: JDC Group AG

ISIN: DE000A0B9N37

Anlass der Studie: Research Report (Initial Coverage)

Empfehlung: BUY

seit: 15.12.2015

Kursziel: EUR 6.80

Letzte Ratingänderung: -

Analyst: Cosmin Filker, Felix Gode, CFA

* After completion of the restructuring measures and the associated sale of

loss-making subsidiaries, JDC Group AG (formerly Aragon AG) will focus on

the areas of Advisory and Advisortech. Within the Advisor segment, the

former classical fi-nancial product consultation business will be bundled

under the two brands Jung, DMS & Cie. AG (broker pool; B2B) and FINUM.

(direct advisory services for wealthy clients; B2C). In the new Advisortech

segment, JDC Group AG is develop-ing advanced advisory and management

technologies, thereby combining classic financial consultancy with the

rapidly growing Fintech area.

* As a provider of financial services, the company will therefore be

operating in a market environment currently characterised by high

potentials. The rising assets of German citizens despite low interest rates

is crucial here, as this will be accompanied by growing demand for advisory

services. Increasing government regulation combined with a simultaneous

reduction in commission rates by the product companies is also an important

aspect of the current market environment. Larger companies such as JDC

Group AG are likely to benefit from this in their role as 'consolidators',

as only they can adequately cover these increased requirements. Moreover,

economies of scale can also be exploited when negotiating with the product

companies. Progressive digitalisation in the financial services area is

also covered in the Advisortech area.

* The operating performance of JDC Group AG was still significantly

affected by the restructuring measures in 2014, with a corresponding

reduction in sales and earnings. This has, however, already bottomed out.

An upward trend was already evident during the first nine months of 2015.

Adjusted sales climbed by 6.5% to EUR55.59 million. EBIT improved to EUR0.10

million (PY: EUR-2.19 million) and was there-fore back in positive territory

and over breakeven in operative terms for the first time since the 2011

financial year.

* On this basis and with the achieved target structure, JDC Group AG is now

ex-pected to grow again. To this end, we have identified three growth

pillars: affiliation with major brokers as a result of increased regulatory

efforts, the acquisition of broker portfolios within the scope of

succession solutions and sales in the new business area Advisortech by

rolling out the 'allesmeins' app for the current extensive customer base of

930,000 customers. Accordingly, we anticipate a revenue growth rate of 4.5%

to EUR82.02 million in the current financial year (FY 2015e), 19.6% to EUR98.09

million in 2016 and 12.1% to EUR109.94 million in 2017. To accompany this,

economies of scale should increase, particularly in the overhead area,

thereby gradually improving the EBIT margin to 4.7% (FY 2016e) and to 6.7%

(FY 2017e). In the long term, we expect the trend towards increasing EBIT

margins to continue, given the projected sales growth, which we have taken

into consideration in our DCF valuation model. JDC Group AG should

therefore move sustainably back into the profit zone, even on a post-tax

basis.

* Within our DCF valuation model, we have calculated a fair value of EUR6.80

per share. The JDC Group share therefore has a high valuation potential and

we recommend it with a BUY rating.

Die vollständige Analyse können Sie hier downloaden:

http://www.more-ir.de/d/13471.pdf

Kontakt für Rückfragen

Jörg Grunwald

Vorstand

GBC AG

Halderstraße 27

86150 Augsburg

0821 / 241133 0

research@gbc-ag.de

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Offenlegung möglicher Interessenskonflikte nach §34b Abs. 1 WpHG und FinAnV 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.htm

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