On Monday after the bell, EVDI announced that for the first time ever, insolvency proceedings were opened for a developer of a real estate project that was financed via the EVDI platform. In total € 2.4m, which were contributed to the related project, are now in question. Overall, roughly 750 retail customers (of total c. 14,000 customers) should be affected by the insolvency (eNuW).

After an impressive track-record of 70 financed projects and > € 200m financed volumes through the EVDI platform without a single default, it was in our view just a matter of time until the first project default, especially in the currently difficult macroeconomic market situation with rising interest rates and decreasing real estate prices. Still, the majority of the investors affected by the project default should still have generated a positive aggregated return on the EVDI platform. The direct impact of the default on EVDI´s P&L, but also the indirect signaling effect on other projects this year should be rather limited (eNuW: € 0.4m sales reduction for FY23).

Independently of the project default, EVDI should have reached its FY 2022 sales guidance of € 5.5-6.0m (32% yoy growth at the mid-point), which is in line with our estimates of € 5.8m (eNuW). Key driver for the appealing development is the increased average sales per project (eNuW: € 0.32m vs € 0.22m in FY 2021) on the back of higher average volumes per project (eNuW: € 3.1m vs € 2.8m in FY21), while number of projects (eNuW: 18 vs 20 in FY 2021) and aggregated financed volumes (eNuW: € 55.2m vs € 55.5m in FY 2021) should have stagnated. FY 2022 EBIT is expected to be around € -3.8m (eNuW), burdened by one-off costs for the IPO (eNuW: € 2.5m), which were partly offset by cost-cutting measures initiated during the year (reduced personnel ramp-up, marketing budgets and service provider and third-party costs).

Going forward, growth should come mainly from prospective regional expansion to other European countries, new product features and the ongoing market penetration in a growing market. Thanks to the scalable platform business model, an EBIT margin north of 20% should be achievable in the mid- to long-term (eNuW: FY´25E), in line with management’s long-term vision (20% EBIT-margin).

We reiterate our BUY rating with reduced PT of € 9.50 (old: € 11) based on DCF.