05.12.2018 - 10:03:24

Original-Research: Coreo AG : BUY

Original-Research: Coreo AG - von GBC AG

Einstufung von GBC AG zu Coreo AG

Unternehmen: Coreo AG


Anlass der Studie: Research Report (Initial Coverage)

Empfehlung: BUY

Kursziel: EUR 3.10

Kursziel auf Sicht von: 31/12/2019

Letzte Ratingänderung:

Analyst: Cosmin Filker; Marcel Goldmann

Attractive 'value-add' real estate specialist, Fast portfolio expansion

achieved, value-creating growth strategy to be supported by capital

increase, high share price potential

Coreo AG is currently executing a subscription-rights capital increase with

projected gross issue proceeds of up to EUR 16 million. The liquidity

proceeds will be used to acquire commercial and residential real estate for

the 'value-add' business segment. In accordance with the corporate

strategy, the focus is on medium-sized cities in Germany which have not yet

been affected by the strong price increases thus enabling adequate rental

returns. The goal is to build a high-yielding portfolio in terms of

purchase prices. Currently (pre money), the company has a projected NAV

(based on GBC calculations) of EUR 2.40. Our fair value rating on DCF basis

(post money) is even higher (see below).

The company was known as Nanostart AG until 2016 and was active as an

investment company in the nanotechnology sector. The company and corporate

purpose were changed to real estate as a result of a resolution passed by

the Annual General Meeting in 2016. The majority of the investments (made

in previous years) have since been sold. As of 30 June 2018, the company

still held a little bit more than 2 million shares and thus almost 7.7% of

the listed company MagForce AG. Since 2017, Coreo has been investing in

residential and commercial properties/portfolios, primarily in the value-

added segment, in line with its value-creating growth strategy. The sale of

non-strategic portfolio elements generates short-term capital gains. At the

same time, the remaining properties are being developed and optimised in

order to increase long-term rental income and consequently create potential

for value appreciation.

Since launching the new corporate strategy, the company has already

completed five transactions with a total investment volume of just under

EUR 41 million. The properties are all located in the B and C locations

addressed by Coreo AG and have comparatively high rental yields of more

than 10%. In the current 2018 financial year, the largest investments in

terms of volume involved the acquisition of the residential real estate

portfolio in Göttingen and the Hydra portfolio. The acquired portfolios

will be held for producing long-term rental income. In addition, individual

properties are being revitalised or rebuilt in order to benefit from

expected increases in value. The company also plans to raise hidden

reserves within the scope of property sales. Access to liquidity from

property sales is then to be used for the planned investments

(revitalisation, conversion, etc.). It can also be assumed that the company

will successively reduce its stake in MagForce AG, thereby releasing

further liquidity.

The basis for our sales and earnings forecasts is the current real estate

portfolio and assumed investments following the current capital increase.

The forecasts and valuation are therefore a so-called of post-money

consideration. We have also taken note of the unusual fact that Coreo AG

until now does not consolidate the property companies (note: all properties

are held in subsidiaries of the legal form GmbH and GmbH & Co. KG). The

after-tax result of the property companies is consequently only reported as

investment income in the financial result of Coreo AG. We are 'moving up'

this net income position to the gross profit of Coreo AG, which means that

the property income will be part of the operating result (EBITDA, EBIT).

For the current and upcoming financial year, we expect a tangible increase

in income and profit. In addition to the increase in rental income, the

company is expected to generate significant sales proceeds and uncover

hidden reserves. As income from participation represents a residual value,

Coreo AG should achieve high profit margins of up to 65%, according to our

plans. At the level of a property company, the profit margin is lower, but

still at the upper end of the industry-standard key figures.

Based on our DCF model (post-money), we have calculated a target price of

EUR3.10. Based on the current share price and the placement price within

the context of the current capital increase of EUR 1.60 per share, our

recommendation is BUY.

Die vollständige Analyse können Sie hier downloaden:

Kontakt für Rückfragen

Jörg Grunwald



Halderstraße 27

86150 Augsburg

0821 / 241133 0


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Date and time of completion (german version): 29/11/2018 (5:13 pm)

Date and time of first distribution (german version): 30/11/2018 (8:30 am)

Date and time of completion (english version): 05/12/2018 (9:26 am)

Date and time of first distribution (english version): 05/12/2018 (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.