Original-Research: MAX Automation SE (von NuWays AG): Kaufen

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Original-Research: MAX Automation SE - from NuWays AG

Classification of NuWays AG to MAX Automation SE

Company Name: MAX Automation SE

ISIN: DE000A2DA588

Reason for the research: Update

Recommendation: Kaufen

from: 19.04.2024

Target price: EUR 8.20

Target price on sight of: 12 Monaten

Last rating change:

Analyst: Konstantin Völk

Positive long-term prospects for Vecoplan and bdtronic

Topic: In recent years, two of the current six portfolio companies

(continuing operations only) became increasingly important. These two

companies, bdtronic and Vecoplan, accounted for 71% of FY23 sales.

Enough reason to have a closer look at their prospects.

Vecoplan: As a global specialist for shredding, conveying, and processing

of raw materials in the recycling industry, Vecoplan can benefit from the

latest EU regulation. Until today, a lot of waste in the EU is exported to

third countries like Turkey, Indonesia, and Malaysia. In February 2024, the

European Parliament adopted tougher rules for waste shipments. Plastic

waste exports to non-OECD countries will be prohibited, while those to OECD

countries will be subject to stricter conditions. This forces EU member

countries to adopt better recycling strategies benefiting demand for

Vecoplan's products. Vecoplan showed a dynamic revenue growth of 10% p.a.

over the last five years. We expect sales to grow by 6.0% p.a. until 2030e

with low double-digit EBITDA margins (eNuW), outpacing the growth of the

global waste management market of 5% according to Polaris Market Research.

Bdtronic: In 2023, the EU banned the sale of new CO2-emitting cars by 2035,

including petrol and diesel-driven cars, which increases the demand for

electric vehicles. In addition, major automotive manufacturers set internal

electrification targets. For instance, Volkswagen aims for a fully electric

production by 2033 within Europe. With 2/3 of bdtronic's sales coming from

the EU, this could have a material impact on its impregnation segment.

Bdtronic's trickle impregnation machines used for the impregnation of

electric motors are sold to Tier1-suppliers and OEMs and are suited for

large scale production. The strong demand for bdtronic's products has

already shown up in the numbers with a five-year revenue CAGR of 14% and a

similar development in order intake. We expect bdtronic to grow by 9.4%

p.a. until 2030e with EBITDA margins north of 15% (eNuW).

Mind you, in addition to the positive operating performance, a successful

divestment of the subsidiary MA micro, which is part of discontinued

operations (company news 08.09.2023) should be a notable share price

catalyst, as it is seen to underpin that the value of the "parts" clearly

exceeds the current Enterprise Value of the group (eNuW). A strategic buyer

could be willing to pay at least 10x EBITDA for this highly profitable and

return-rich speciality business, implying a purchase price of more than EUR

93m (eNuW). Reiterate BUY with an unchanged EUR 8.20 PT based on DCF.

You can download the research here:

http://www.more-ir.de/d/29465.pdf

For additional information visit our website

www.nuways-ag.com/research.

Contact for questions

NuWays AG - Equity Research

Web: www.nuways-ag.com

Email: research@nuways-ag.com

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