SRC Research the bank-independent analysts house for Financial and Real Estate stocks today presents a rating update about Marburg-based investment company 3U Holding AG which is listed on Frankfurt Prime Standard.
The company released last week on 31 March its 2010 annual report. The picture was mixed. The net income was clearly above company-s guidance and our expectations at Euro 5.8m and profitted from some positive tax effects. The operating profit was worse than expected. EBITDA came in only at Euro 6.4m far below company-s guidance of Euro 10m. The reason were several one off items bringing down operating profit, in particular in the telephony segment.
Very good was the picture at 100% daughter LambdaNet AG which returned to success with a steep rise of operating profit. EBITDA almost tripled from Euro 3.4m to approx. Euro 10m. Our optimistic forecast was only between Euro 8m and Euro 9m.
We adjusted our sum-of-the-parts approach, in particular for the good picture at LambdaNet, and come up with a higher fair value target price of Euro 1.10 per share. Keep in mind that we do not take the two new business lines Services and Renewable Energies into our fair value calculation as they do not deliver significant contributions to bottom line so far. In our view it is noteworthy that 3U took some important steps in 2010 to establish a profound business in the production and sales of solar components in the mid-term which will help to bring up total group-s results.
The new dividend payment for 2010 of 2 Cents per share might also attract new investors for the share. Thus we stick to our Buy recommendation and lift our target price to Euro 1.10 (old: Euro 1.00)
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