Recently, LAIQON has announced to have closed the game changing cooperation with Union Investment. With that, LAIQON provided a new promising guidance for its subsidiary LAIC, mainly reflecting the potential of the new cooperation. Further, LAIQON announced a capital raise on the level of LAIC and published FY23 prelims that came in rather weak. In detail:

Cooperation with Union is heralding a new era. Together Union and LAIQON will launch new type of fund-based investment product for wealthy Volksbanken and Raiffeisenbanken (VR) customers in Q4´24. The core of the joint product is an individual fund asset management (iFVV) that is providing an individually tailored portfolio, based on dozens of AI-generated decision parameters of the WealthTech LAIC considering both – classic and sustainable (ESG-compliant) investments constraints. While LAIQON is providing the technology and the reporting via its wealth tech LAIC (DAP 4.0) as well as a fully digital onboarding, Union Investment is providing the distribution channels and the sales power within VR ecosystem. The VR banks sell the product to customers by advising and onboarding them. The joint goal is to attract new customers for individual fund- and AI-based wealth management.

New promising guidance for LAIC. While the management expects AuM´s of LAIC to increase by € 5-6bn until FY28e to € 5.5-6.5bn, mainly driven by the new cooperation with Union, we are slightly more conservative expecting AuM´s to increase to only € 4.5bn AuM.

Financing secured. In order to finance the initial costs of the cooperation (eNuW: c. € 3m), LAIQON plans to raise up to € 6.8m, partially via emission of new “LAIC token 24”, partially via sale of existing token at a valuation of € 65m.

Weak FY23 prelims of € 30.7m sales (eNuW: € 33.4m) and € -4.8m EBITDA (vs eNuW: € -1.6m) reflecting the frustrating situation on the capital markets in FY23.

In this piece, we take a closer look at 1) the Digital Asset segment and the cooperation with Union Investment, 2) the Asset Management and 3) the Wealth Management.

As we consider the cooperation as a game changer for LAIQON, we reiterate BUY with a new PT of € 10.00, based on DCF.