Topic: Yesterday, the Group´s CEO Octavian Patrascu presented its growth plans for NAGA during our roundtable. Further, he announced to have entered into a cooperation with the messenger Telegram. Our key takeaways:

First-ever fully integrated trading app within Telegram. As a first mover, NAGA is the first broker that natively integrated its full trading offering into the Telegram ecosystem. Customers now can do the whole onboarding and KYC process without leaving the Telegram app. Further, onboarded customer can use all the features of the NAGA Super APP within the Telegram app. In our view, the integration of the NAGA SuperApp into the Telegram ecosystem with its c. 950m users is a bold move, that should massively increase the reach of NAGA and lower entry barriers for potential new customers. As a result, number of new customers should increase significantly. Further customer activity should increase as well, as receiving a trading signal and placing a trade is no longer separated in two different apps. At least not from a user´s perspective.

Promising growth ambitions unveiled. Similar to the recently announced cooperation with BVB, the cooperation with Telegram is another important milestone on NAGA´s growth path. According to its internal plan, NAGA expects to grow to € 129m in sales until FY26e, achieving some € 31m EBITDA. This is clearly above our conservative estimates of € 103m in sales and € 21m EBITDA, but not out of reach. Keep in mind 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.

For FY24, we are anticipating € 71m in sales and an EBITDA of € 8.6m (12% EBITDA margin), slightly below the internal plan on the topline (€ 75m) and above on the bottom line (€ 8.7m). Obviously, investment into future growth could burden margins in the short-term.

Overall, the revitalization of customer activity in the brokerage space, paired with cross-selling and synergy effects arising from the merger and important strategic cooperations should fuel NAGA´s growth going forward.

BUY with a new PT of € 1.40 based on DCF.