With its reputation for authenticity and trustworthiness, MWB has made a name for itself by busting counterfeit watches on social media, having built a substantial online community of 220k Instagram followers. The company is a unique play in the growing online secondhand market for luxury watches, which BCG expects to grow by 54% p.a. to CHF 31bn by 2026e (CHF 5.5bn in 2022). The online share of the secondhand market for luxury watches currently stands at 25%, but is set to reach 60% (similar to e.g. shopping for clothing at 70% online penetration), implying a strong catch-up potential.

MWB’s USP and strong differentiation against peers such as Chrono24 and chronext are its elaborate and trusted network as well as its multi-year luxury watch expertise by the two founders and “anti-fake ambassadors” Leon Schelske and Robin Haas. More importantly, MWB enables customers access to hard-to-get luxury watches and ensures finding a buyer for every seller and vice versa. Within only 7 days they can fulfill the client’s desire, all the while guaranteeing 100% authenticity. This stellar value proposition explains why MWB

sold 410 luxury

watches in FY'23 with a selling prices of up to € 460k.

MWB’s capital light business model provides the company with strong gross margins of c. 5% carried by the company’s high level of customer pre-payments. MWB does not purchase any watch that has not already been paid for, and hence keeps working capital and market risk to a minimum. As sales look set to grow at a c. 44% CAGR 23-26e, scalability should allow for profitability improvement to achieve a positive EBITDA margin by 2024e.

The company capitalizes on the continued imbalance between firsthand and secondhand market, as the former leads to scarcity of desired brands and models. Moreover, new buyers are becoming ever more digitally savvy (e.g. Gen Z, millennials), which should accelerate the online penetration, superbly positioning MWB for future growth.

MWB provides an excellent opportunity to participate in a vibrant growth story in a luxury niche market. However, the strong share price movement of more than 50% post IPO already surpassed our PT of € 60.00 (based on DCF), which is why we recommend to HOLD.