Original-Research: elumeo SE (von NuWays AG): BUY

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Original-Research: elumeo SE - from NuWays AG

Classification of NuWays AG to elumeo SE

Company Name: elumeo SE

ISIN: DE000A11Q059

Reason for the research: Update

Recommendation: BUY

from: 11.03.2024

Target price: 5.00

Target price on sight of: 12 Monaten

Last rating change:

Analyst: Mark Schüssler

Growth avenues lead the way in 2024 and beyond

elumeo looks set to benefit from two growth initiatives in particular which

should help both top and bottom line performance going forward:

Growth avenue #1: juwelo. We currently expect much of H1'24e to be burdened

by the continued muted consumer sentiment witnessed over the last quarters,

estimating c. EUR 22m (eNuW) in sales for the first half of the year (flat

yoy). While customer activity should be relatively unaffected overall for

elumeo's core platform juwelo, the mix of both products and customers will

likely reflect macroeconomic headwinds. However, whereas competitors like

Wempe overwhelmingly offer higher-priced jewelry, leading customers to

either stay or churn altogether, elumeo can prevent churn on its platform

by offering both higher- and lower-priced items and allowing customers to

simply subsititute one for the other. Thus, the average sales price is seen

to decline compared to the prior reporting period (eNuW: EUR 72), but the

number of items sold should steadily rise over the year to c. 645k (+2%

yoy, eNuW) as (1) the continued development of an interactive mobile

jewelry shopping app (eNuW: one-digit million figure or between c. 2-13% of

FY'23e revenue) is expected to contribute perceptibly to FY total revenue

by H2'24 and (2) AI translated automated shopping shows likely help reduce

operating costs and boost video shopping content globally, the testing of

which is still ongoing but already promising.

Growth avenue #2: jooli. The platform was launched in the Indian market to

capitalize on both lower customer acquisition costs and a trove of data

needed to enhance the app's algorithm and features such as livestream

shopping (clips of ~20 seconds) of not only jewelry but various lifestyle

products. While first KPIs like order volume are promising, jooli's

development is financed out of the company's own resources and conducted

such that customer acqusition is profitable from the beginning, causing a

slower but financially healthier ramp up. Therefore, we currently do not

expect material top or bottom line contributions from jooli before 2026e

(see also our update from February 2nd). However, as the company prepares

jooli for a successful roll-out in its European markets in the mid-term,

elumeo's core platform juwelo looks set to benefit from an eventual

recovery of the jewelry and overall e-commerce market with sales prices and

items sold likely to recover.

We reiterate our BUY rating with an unchanged PT of EUR 5.00 based on DCF.

You can download the research here:

http://www.more-ir.de/d/29107.pdf

For additional information visit our website

www.nuways-ag.com/research.

Contact for questions

Die Analyse oder weiterführende Informationen zu dieser können Sie hier downloaden: www.nuways-ag.com/research.

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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The result of this research does not constitute investment advice

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