Original-Research: UBM Development AG - from NuWays AG

Classification of NuWays AG to UBM Development AG

Company Name: UBM Development AG ISIN: AT0000815402

Reason for the research: Update Recommendation: Kaufen from: 12.04.2024 Target price: EUR 28.00 Target price on sight of: 12 Monaten Last rating change: Analyst: Philipp Sennewald

Remaining in pole position for market reopening / chg.

UBM released final FY 2023 results which were in line with the preliminary figures published in March. FY sales came in at EUR 85.3m (eNuW: EUR 87.9m), implying a yoy decline of 36%. This is again mainly explained by the ongoing weakness of the real estate transaction market, which reached its lowest point since 2010 with a transaction volume of only EUR 29bn in Germany (-56% yoy). Hence, sales from property disposals almost halved yoy, amounting to EUR 48.2m (2022: EUR 85.2m), mainly driven by the disposal of the 34% share in Palais Hansen (Hotel), a non-core disposal in the Czech Republic as well as the ownership transfer of F.A.Z tower to HMG. FY EBT came in at EUR -39.4m, which was partly due to negative operating leverage but mainly caused by property write-downs to the tune of EUR 70m, resulting from the weak market environment as well as increased discount rates setting off increasing rent levels.

In recognition of the net loss, management will recommend to the AGM to waive the dividend as a "precautionary measure". Yet, CEO Winkler reiterated in yesterday's CC that this does not change the overall policy and that the company will return to be a reliable source of dividends once profitability is regained.

While management provided no guidance for 2024 yet due to the continued lack of visibility in the market, it clearly indicated that the main focus will be on the execution of the timber pipeline (75% of its EUR 2.3bn pipeline), with the main goal of full letting and disposing the Timber Pioneer, as well as cash management. Regarding the latter, UBM will intensify the disposal of non-strategic, mostly standing, assets (EUR 480m total BV) in order to strengthen the liquidity position (EUR 152m cash at YE '23). Here, management stated that it already made good progess and is expecting first disposal sucesses in H1.

Overall, we continue to consider UBM to be well positioned for the pending reopening of the transaction market thanks to its clear focus on Taxonomy compliant hybrid-timber developments. However, the market upturn has so far failed to materialize, which, coupled with continuous outflows at real estate mutual funds, is indicating a slow and steady recovery rather than a rapid upswing. We hence remain cautious regarding '24e, modelling a 50% likelihood of a Timber Pioneer disposal as well as some smaller disposals of non-core assets.

We reiterate BUY with an unchanged PT of EUR 28 based on DDM.

You can download the research here: http://www.more-ir.de/d/29391.pdf For additional information visit our website www.nuways-ag.com/research.

Contact for questions NuWays AG - Equity Research Web: www.nuways-ag.com Email: research@nuways-ag.com LinkedIn: https://www.linkedin.com/company/nuwaysag Adresse: Mittelweg 16-17, 20148 Hamburg, Germany ++++++++++ Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss bestimmter Börsengeschäfte. Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse. ++++++++++

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April 12, 2024 03:01 ET (07:01 GMT)