Topic: During the recently held extraordinary general meeting, NAGA received the approval for the merger with CAPEX with a 99.81% majority. As the pending regulatory change of control process is rather a formality, we adjust our estimates, now fully reflecting the merger with CAPEX. For FY24 we now expect:

• Sales of € 77.8m, resulting from 15.9m transactions (eNuW) and an avg. revenue per trade of € 4.9 (eNuw). Apart from the technical impact of the merger, the stronger trading figures from peers that indicate an upswing of customer activity in the market, paired with cross-selling potentials between NAGA and CAPEX, are driving sales. The number of active customers (eNuW: 46k) and trading volumes (eNuW: € 340bn; € 21.4k per trade) should develop accordingly.
• EBITDA is expected to come in at a solid € 10.1m, thanks to the strong topline development as well as anticipated synergy effects. While management expects an OPEX reduction of some € 10m, we are a bit more conservative, anticipating only € 8.5m (eNuW: marketing spending: € 4m, personnel expenses: € 2.5m, other operating expenses € 2m). EBT is seen at negative € 0.7m.

Despite the fact, that the merger looks like an unfavourable deal for existing shareholder due to its dilutive nature(existing shareholders possess only 25% of all outstanding shares post merger and the outstanding convertible bond as well as management's long-term incentive scheme could dilute them further), the growth potential of the joint Group is huge: In 2026, management plans to generate USD 250m in sales with 40% EBITDA margins. While we think this is a rather optimistic scenario, the past has already shown that an incremental positive change in the sentiment could have an enormous effect on the P&L of NAGA. The leverage of the joint Group could even scale this effect. Still, in our base case scenario we conservatively only anticipating € 98m in sales and an EBITDA € 20m (20% EBITDA margin), leaving room for positive surprises.

In light of the revitalization of customer activity in the brokerage space, paired with cross-selling and synergy effects arising from the merger, we see significant growth potential again.

BUY with a new PT of € 1.20 (old: € 1.30), based on DCF.