Classification of NuWays AG to CR Energy AG

Company Name:	CR Energy AG
ISIN:	DE000A2GS625
Reason for the research:	Update
Recommendation:	BUY
from:	22.08.2024
Target price:	EUR 12.00
Last rating change:
Analyst:	Philipp Sennewald

PT adjustment after issuance of bonus shares; chg.

CR Energy recently announced the inclusion of the bonus shares in the Open Market of the Frankfurt Stock Exchange as part of the successfully completed capital increase. As the bonus shares were issued at a ratio of 1:3, the company’s share capital increased by € 17.6m to € 23.5m. For shareholders, the issuance of bonus shares is equal to a stock split, i.e. it is value-neutral and will cause no dilution of shareholdings.

Management opted for the bonus shares instead of paying out dividends this year with the aim to increase visibility and liquidity of the stock and thus the attractiveness of the share. Yet, we expect the company to start paying dividends again starting next year (eNuW: € 0.65ps). Like in previous years, shareholders will then most likely have the choice between a cash and a stock dividend.

Aside from this, the company looks set to continuously boast a strong operating performance, which should become visible with the release of the H1 report in September. In fact, with its three key holdings CR Energy is in an excellent position to benefit from the surging demand for affordable as well as sustainable housing. Mind you, CR’s subsidiary Terrabau is among the pioneers of affordable housing solutions with a focus on East Germany’s metropoles Leipzig and Berlin. Especially in Berlin, the company aims to focus on social housing going forward, which gets subsidized by the IBB (Berlin’s development bank) with an interest-free building loan (30y) of up to € 2,000 per sqm as well as a cost subsidy of up to € 1,800 per sqm. Given Terrabau’s cost-efficient construction method (i.e. serial construction), this should allow for significant margin upside going forward.

Furthermore, we expect subsidiary CR Opportunities to launch its first European Long Term Investment Fund (ELTIF) in H2. The fund shall be populated with properties from Terrabau’s development projects. ELTIF’s are closed-end funds, which are specifically designed for infrastructure investments. CR management intends to increase AuM by € 100m annually until 2027.

The stock remains a BUY with a new PT of € 12.00 (old: € 48.00) based on DDM. The lower PT is solely due to the higher share count following the issuance of the bonus shares.

You can download the research here: http://www.more-ir.de/d/30585.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
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse.
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