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

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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 (Anno)

Empfehlung: BUY

Kursziel: 10.25 EUR

Kursziel auf Sicht von: End FY 2018

Letzte Ratingänderung:

Analyst: Cosmin Filker; Marcel Goldmann

Basis laid for dynamic and high-margin growth in 2016; Digitalization

strategy boosted; Target price increased

In the past financial year 2016, JDC Group AG has laid the foundation for

the future growth of the business. As an important part of this, the

introduction of the 'allesmeins' app has connected the traditional advisory

business with the FinTech market. In addition, in response to the tendency

for consolidation on the financial intermediaries market and the increasing

attractiveness of the FinTech and InsureTech areas, various acquisitions

were made to the portfolio. As well as the acquisition of part of Aon's

private customer business, the online comparison platform 'Geld.de' has

also been acquired.

The initial positive effects from the implementation of the business

strategy only began to be seen in the fourth quarter of 2016, when a

significant growth in revenue of 17.8% was achieved compared to the same

quarter of the previous year. At the overall annual level, JDC Group AG

achieved revenue of EUR78.05 million (previous year: EUR75.70 million), an

increase of 3.1%. However, because they took place over the course of the

year, the additions to the portfolio are only included pro-rata.

Of particular note is the clear improvement in profitability, with an

above-average EBITDA increase to EUR2.72 million (previous year: EUR1.28

million) and an improvement in the EBITDA margin to 3.5% (previous year:

1.7%). This significant improvement in earnings results primarily from the

revenue of the acquired business for which there was no broker and

therefore no commission expenses involved. Adjusted for transaction costs

and one-off effects amounting to EUR0.5 million, the earnings achieved by

the Company would have been even better.

Our revenue and earnings forecasts take account of the initial year-round

effect of new portfolio acquisitions made in the past financial year,

which, from the current perspective, produces a highly positive upside

potential for revenue and earnings performance. In addition to this base

effect, the digitisation strategy is particularly worthy of mention as it

allowed new customer groups to be reached and cross-selling potential to be

raised with existing customers. There are also plans to modernise the

'Geld.de' platform and expand its product spectrum. The other part of the

digitisation strategy worth highlighting is the addition of Stefan

Bachmann, a former Google manager, to the Executive Board. At Google

Germany, he was responsible for the entire banking industry and the FinTech

and InsureTech areas. The Company should therefore gain particular benefits

here in the marketing of digital financial products.

In line with the Company's guidance, for the current financial year, 2017,

we expect a significant increase in dynamic revenue growth, which is likely

to continue in the coming financial years in accordance with the corporate

strategy described above. As a significant portion of future revenue growth

should originate from the expansion of the direct, and therefore high-

margin, end-customer business, we expect an above-average increase in

EBITDA. Up to financial year 2019, we expect an EBITDA margin of 9.6%,

using this as the basis for our DCF valuation model (2016: 3.5%).

On this basis, we have updated our DCF valuation model and determined a new

target price of EUR10.25 per share (previously: EUR8.40). The increase in

the target price is a result of the initial inclusion of the higher 2019

forecasts, and can also be attributed to a roll-over effect. Based on the

current share price of EUR6.58, there is a price potential of 55.8% so we

are giving a BUY rating.

Die vollständige Analyse können Sie hier downloaden:

http://www.more-ir.de/d/15163.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,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter:

http://www.gbc-ag.de/de/Offenlegung.htm

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Für den Inhalt der Mitteilung bzw. Research ist alleine der Herausgeber bzw.

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oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.

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