Topic: Last week, EVDI published unaudited H1´24 figures that came as a mixed bag: While topline showed slight improvements on low levels, the bottom remained soft, still burdened by project defaults. In detail:

• H1 sales came in at € 1.6m, which is above previous year´s figure of € 1.5m, but inflated by c. € 0.3m that are directly depreciated in other operating expenses as it is rather unlikely that the amount outstanding can be collected. The adjusted sales figure of € 1.3m is still above our estimates of € 1.1m, driven by higher financing volumes of € 13.7m (vs eNuW: € 13m) and higher avg sales per project of € 0.21m (vs eNuW: € 0.14m).
• EBITDA came in at negative € 2.2m (vs € -1.4m in H1´23), below expectations of € -1.9m, mainly due to high legal costs and decreasing but still high personnel expenses paired with low topline levels. Note that € 2.8m of the other operating expenses are expenses from write-offs of receivables that are offset by the c. 0.3m sales adjustment and the € 2.3m reduction of value adjustments of receivables in other operating income.

Overall, the business of EVDI is still heavily burdened by the deteriorating real-estate market with project defaults and project delays, construction costs and real-estate prices normalizing slower than expected, and investors of the senior tranches (mostly banks) of new projects being more selective and reserved. All that should further burden the business at least for the remainder of FY24. EVDI hence confirmed its FY24 sales guidance of € 2.3-2.7m, which imply only € 1.0-1.4m adjusted sales in FY24 (vs eNuW: € 1.5m).

Positively, we should have already seen the trough in the real-estate market and the recovery is already ongoing. Further, EVDI has diversified its business by offering new products that are rather contrary to real-estate investments such as deposit accounts, renewable energy projects, ETFs as well as holistic wealth management. This initiated diversification should reduce the dependency from the very cyclical real-estate project business, stabilizing the income and margins going forward.

In light of the recent stock price weakness, we change to BUY with a reduced PT of € 1.80, based on DCF.