Original-Research: DEMIRE AG (von NuWays AG): BUY

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Original-Research: DEMIRE AG - from NuWays AG

09.05.2025 / 09:00 CET/CEST

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Classification of NuWays AG to DEMIRE AG

Company Name: DEMIRE AG

ISIN: DE000A0XFSF0

Reason for the research: Update

Recommendation: BUY

from: 09.05.2025

Target price: EUR 1.30

Target price on sight of: 12 months

Last rating change:

Analyst: Philipp Sennewald

Q1 results in line with guidance, chg.

Topic: Yesterday, DMRE released Q1'25 figures, showing the expected decline

in rental income and FFO following the decreased asset base. In detail:

Q1 rental income decreased 25% yoy to EUR 14.0m (eNuW: EUR 13.5m), which was

mainly driven by the sale of the "LogPark" in Leipzig and the

deconsolidation of the "LIMES" portfolio. Both have a combined effect of EUR

17.5m on DMRE's annualized rent. On this basis, also the NOI significantly

decreased implying a slightly weaker NOI margin of 64.5% (-0.8pp yoy), which

should be mainly attributable to the increased vacancy rate of 18.1% (FY24:

15.1%). This was mainly caused by Deutsche Telekom leaving parts of their

rental space, which was only partly offset by the strong letting performance

in Q1 (25k sqm). Going forward, we expect the vacancy rate to go down again,

driven by an ongoing strong letting performance as well as the targeted

disposal of higher vacancy assets.

Q1 FFO came in at EUR 2.1m, much stronger than our estimated EUR 1.2m but still

74% down yoy. Mind you, this figure displays the FFO before shareholder loan

interest (EUR 93.5m volume & 22% interest), which the company capitalizes,

thus not being cash but P&L relevant. The disproportionately strong decline

was mainly caused by the increased interest payments for DMRE's corporate

bond as well as the weaker NOI margin.

Guidance confirmed. On the basis of the results, management confirmed the

FY25 guidance of EUR 51-53m rental income and EUR 3.5-5.5m FFO. In our view,

which is already reflecting a certain amount of disposals, both are to

conservative. For the top-line, we now expect DMRE to achieve EUR 54.6m, which

is based on the Q1 rental income, an annualized contractual rent of EUR 53.7m

as well as an improved vacancy. Our FFO estimate of EUR 5.6m is also ahead of

the guidance following the stronger than expected result in Q1 and a

conservative estimate going forward.

Despite the muted operating performance, the stock remains highly

undervalued in our view and should provide a good opportunity, particularly

for special situation investors. Reiterate BUY with an unchanged EUR 1.30 PT

based on our NAV model.

You can download the research here: http://www.more-ir.de/d/32530.pdf

For additional information visit our website:

https://www.nuways-ag.com/research-feed

Contact for questions:

NuWays AG - Equity Research

Web: www.nuways-ag.com

Email: research@nuways-ag.com

LinkedIn: https://www.linkedin.com/company/nuwaysag

Adresse: Mittelweg 16-17, 20148 Hamburg, Germany

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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben

analysierten Unternehmen befinden sich in der vollständigen Analyse.

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2133682 09.05.2025 CET/CEST

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