Original-Research: Coreo AG - von GBC AG

Einstufung von GBC AG zu Coreo AG

Unternehmen: Coreo AG

Anlass der Studie: Research Note
Empfehlung: BUY
Kursziel: EUR 1.00
Letzte Ratingänderung: 
Analyst: Cosmin Filker, Marcel Goldmann

H1 2023: Large portfolio acquisitions to come in 2024; EBIT break-even
expected in 2024; price target: EUR 1.00; rating: BUY
In the first six months of 2023, Coreo AG was able to increase rental
income to EUR 3.17 million (previous year: EUR 2.82 million). As there were no
property additions in both the 2022 financial year and the current 2023
financial year, the 12.7% increase in gross rental income was achieved on
the same property basis. Portfolio optimisations carried out, such as the
property handover in Kiel in the past 2022 financial year or the conclusion
of a long-term rental agreement with the city of Wetzlar, have increased
the revenue base, from which Coreo AG benefited in the first half of 2023.
In addition, vacancies were already reduced in the past financial year and
rent increases were implemented in some cases. However, part of the
increase in gross rents is also due to the current market-related rise in
ancillary costs, which resulted in a significant increase in advance
operating cost payments of 44.1% to EUR 0.84 million (previous year: EUR 0.59
Total operating costs of EUR 3.10 million (previous year: EUR 3.04 million)
remained roughly at the previous year's level. Within costs, the cost of
materials in particular increased to EUR 1.79 million (previous year: EUR 1.29
million). This was partly due to higher ancillary operating costs and
partly due to maintenance and modernisation expenses, which relate in
particular to the properties in Wetzlar, Delmenhorst and Göttingen.
However, the increase in the cost of materials was offset by a decrease in
personnel expenses and other operating expenses (including lower legal and
consulting costs). At EUR -0.44 million (previous year: EUR -0.61 million),
EBIT in the first six months of 2023 was therefore also higher than the
previous year's figure.
We have prepared our forecasts on the basis of the current property
portfolio. In addition, we also assume property acquisitions for the coming
financial years, which will both have an impact on the company's rental
income and, as part of the value-creating strategy, result in possible
valuation income.
In the first six months of 2023, Coreo AG generated gross rental income of
EUR 3.17 million. With the exception of the sale of the 119 residential units
in the 'Hagenweg' property, the property portfolio is unchanged for the
second half of 2023, meaning that comparable gross rental income is likely
to be generated in the second half of the year. The loss of rental income
from 'Hagenweg' of around EUR 0.20 million (GBC estimate) will be limited, as
this will not occur until the fourth quarter of 2023. Compared to our
previous forecast (see forecast dated 14 July 2023), we are nevertheless
adjusting the expected rental income slightly more to EUR 6.12 million
(previously: EUR 6.53 million).
This adjustment is primarily due to the delay in the purchase of the
Hagen/Rostock portfolio, for which the purchase price (total investment
volume: EUR 2.5 million) has already been finalised. We had previously
expected to acquire the property in the second half of 2023. As things
stand, however, the property will not be acquired until the coming
financial year. In addition, the transfer of the Spree-Ost portfolio, for
which a purchase agreement has been in place since 2021, is planned for the
coming 2024 financial year. This portfolio comprises 1,341 flats and 15
commercial units and, as the largest acquisition in Coreo's history, would
have a significant impact on the company's revenue and earnings
performance. As a precautionary measure, we have postponed the acquisition
date to the second half of 2024 (previously: first half of 2024) and are
therefore also reducing the expected rental income for 2024 to EUR 8.22
million (previously: EUR 9.56 million). This effect is not relevant for the
2025 financial year; the lower expected rental income of EUR 12.15 million
(previously: EUR 12.36 million) expected in this financial year is solely a
result of the sale of 'Hagenweg'.
The book loss of EUR 0.61 million from the sale of the properties on
'Hagenweg' in Göttingen was recognised in full in the first half of 2023,
meaning that no further negative effects are expected for the second half
of the year. In our previous forecasts, we did not anticipate any valuation
losses; on the contrary, we assumed valuation gains due to the investments
in the existing portfolio. In the updated forecast, we have taken into
account both the book loss and conservatively assumed slightly lower book
gains on the existing portfolio. Accordingly, the company should report a
negative EBIT of EUR -0.12 million in the current 2023 financial year
(previously: EUR 2.18 million). With the expected strong increase in rental
income, in particular due to the addition of the two already fixed
portfolios, EBIT break-even should be achieved sustainably from the coming
2024 financial year.
As part of our DCF valuation model, we have determined a new price target
of EUR 1.00 (previously: EUR 1.30). The price target reduction is solely a
consequence of the forecast adjustment. We continue to assign a BUY rating.

Die vollständige Analyse können Sie hier downloaden:

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Date and time completion (german): 17.11.23 (07:55 am)
Date and time first distribution (german): 17.11.23 (10:30 am)
Date and time completion (english): 20.11.23 (08:02 am)
Date and time first distribution (english): 20.11.23 (10:00 am)

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