EVDI announced to have entered the Austrian market with its online investment platform. The kickstarter in the new market was the project “Am Ankerplatz” – a centrally located, well maintained residential building from the Gründerzeit period in Vienna with 25 flats as well as a commercial unit. The financing volume of € 2.3m (6.6% fixed interest yield / guaranteed for 17 month) has been raised within only three hours.

After the take-over of the Berlin-based digital wealth manager wevest Vermögensverwaltung AG, management delivered on another IPO promise by entering the Austrian market. And the timing is good: While the German real-estate market is still depressed and very challenging, the Austrian real-estate market seems to be relatively stable, despite the current macroeconomic headwinds. But it is not only the timing: The internalization should additionally diversify the business and operations and hence stabilize the income streams. Further, EVDI unlocked new potential projects and customers, which should drive sales, going forward.

Despite the fact, that both initiatives have been planned for a while, both can be seen as strategic reactions to the currently depressed situation in the German real-estate market driven by inflation and rising interest rates, which triggered a sharp increase of financing costs and rising default risks. Both naturally reduce the number of attractive projects for EVDI (with regards to risk-return), which is well reflected in our FY23 estimates and should not change until year end.

Beyond 2023, the outlook is brighter: EVDI is facing a long-term growing market, interest rate hikes seem to slow down and prices in the real-estate market start to decrease. All that should drive number of projects and volumes again. Further the takeover of wevest that unlocked bigger transactions and new products and cross-selling potentials, and the regional expansion should start to bear fruit. As a result, topline should start to grow again.

Thanks to the scalable platform and a now more diversified business model, we see stable EBIT margin is seen north of 20% in the mid- to long-term (eNuW: FY´27E), in line with management long-term vision (20% EBIT-margin).

Remains a HOLD for the moment with an unchanged PT of € 5.00 based on DCF.