Topic: Netfonds reported solid Q3 figures in line with our estimates on both, top- and bottom line. With that, the upper end of the guidance is in reach. Further, Netfonds announced a planned M&A transaction and a planned bond issuing. In detail:

• Gross sales grew by 16% yoy to € 56.2m, in line with our estimate of € 56m. Main driver was the strong AuA and AuM development with new record levels of € 27.2bn (+14% YTD; 20% yoy) and € 3.7bn, both above our estimates of € 26.7bn and € 3.5bn (eNuW old). Consequently, we increased our estimates for FY24 of € 27.4bn AuA and € 4.0bn AuM.
• EBITDA came in above estimates at € 1.9m (-5% qoq, 46% yoy vs eNuW: € 1.8m), mainly driven by the solid topline growth paired with stable OPEX compared to previous quarters, showing the strong operating leverage of the platform business.

Going forward, we see further sequential growth mainly on the back of the strong AuA growth that should become visible in top- and bottom-line with a slight delay but also driven by value accretive M&A transactions (i.e. MFK and Comfort Finance) as well as the launch of an own money market fund earlier this year with already above € 75m end of Q2. As a result, the confirmed guidance for FY24 of € 220-230m in gross sales and € 41.5-43m in net sales can hence be taken as granted.

Apart from that, Netfonds announced to have signed an LOI subject to the acquisition of another fund initiator. The potential target would add approximately € 100m in volume. The acquisition price is expected to be in the mid-single-digit millions. This acquisition is indicating once again that Netfonds is playing an active role in the market consolidation. In order to finance this and further potential transactions, Netfonds plan to issue an unsecured bond with a low- to mid-double-digit million volume.

Overall and on the back of 1) the strong operating performance, 2) Netfonds 360° finfire platform being the key mid- to long term growth and scalability driver and 3) further value accretive M&A transactions, we see Netfonds well on track to reach its mid-term target of € 59m net sales (vs eNuW: € 60m) and € 23m EBITDA (vs eNuW: € 21m) by FY26.

BUY with a new PT of € 76.00, based on DCF.