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 specifically designed for infrastructure investments. CR Energy's management intends to increase AuM by € 100m annually to over € 1bn.

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.