15/12/21 19:09:00

Scale Market Report: Little ones make it big

The scale segment continues to be respectable. Ernst Russ, Ökoworld, Naga and Deutsche Rohstoff remain the driving forces, recently joined by JDC and Lloyd Fonds. 

15 December 2021. FRANKFURT (Börse Frankfurt).  Among the "little brothers" of the DAX, the smallest stands out: the Scale All Share has risen by 28 percent since the beginning of the year, while the MDAX and SDAX have "only" risen by 10.5 and 7.4 percent, respectively, and the DAX by 12.6 percent. This is due to many extremely well performing scale shares. Ernst Russ (DE000A161077), JDC Group (DE000A0B9N37), Ökoworld (DE0005408686), Deutsche Rohstoff AG (DE000A0XYG76), Lloyd Fonds (DE000A12UP29) and The Naga Group (DE000A161NR7) - the performance leaders have doubled to quintupled in price.

As of Wednesday morning, the Scale All Share is at 1,866 points, down slightly from a month ago and the all-time high of 1,969 points reached in September. The Scale 30 selection index is currently at 1,572 points, well below its September record of 1,835 points.

JDC and Lloyd Fonds convince

New in the group of top performers on a twelve-month view is the JDC Group. The share has already risen from 9.44 to 25 euros since mid-December 2020. Business is currently going really well for the Wiesbaden-based financial services provider with the broker pool subsidiary Jung, DMS & Cie. Also due to some cooperations as IT and processing partner of major customers, JDC reported a "significant increase in sales and profits" in the first nine months. 

The share of the Hamburg-based fund and asset manager Lloyd Fonds also made an upward leap recently. It currently costs 13.75 euros, up from 10 euros a month ago and 6 euros a year ago. The reason for the recent rise in the share price is that the company has announced its intention to take over Munich-based BV Holding (Bayerische Vermögen Gruppe). The currently manages funds of around 2.5 billion euros from private and institutional customers. The assets under management of the Lloyd Fonds Group are expected to climb to just under 5 billion euros as a result of the transaction. 

This goes down well with analysts: According to Warburg Research, Lloyd Fonds' strategy confirms its intention to take an active role in the German investment and wealth management market. The analysts therefore increase their price target significantly from 14 to 18.50 euros and confirm the "Buy" rating. SMC-Research also recommends a buy: According to the analysts, the takeover could complete the restructuring of Lloyd Fonds and now focus on organic growth. The SMC analysts expect further increases in sales and earnings and raise the price target from 15.40 to 17.50 euros. Hauck & Aufhäuser is also optimistic, continues to recommend a buy and now sets a target price of 18 instead of 14 euros.  

Ernst Russ: Profiting from the booming freight business

The Ernst Russ share has also recently risen again significantly and now costs 5.50 euros, up from 4 euros a month ago and 1 euro a year ago. The company continues to benefit from the booming freight business. Börse Online has recommended the share, along with the container shipping giants A. P. Møller-Mærsk and Hapag Lloyd, as a buy. The cost of transporting a 40-foot container shipped from Asia to the U.S. has risen from under $2,000 two years ago to more than $25,000, it says. Ernst Russ is continuously expanding its fleet and, with smaller vessels, is somewhat more flexible than Møller-Mærsk, for example. Ernst Russ is also well equipped financially. However, investors should always keep an eye on freight rates. The price target of 5 euros has already been reached due to the recent price increase.

Naga aims for Nasdaq

The share of The Naga Group, the provider of the social network for trading transactions, cryptocurrencies and payments, is currently somewhat weaker. However, the share price has still doubled since December 2020. Most recently, the company, which has been growing strongly since a restructuring, announced its IPO on Nasdaq for 2022. With this, Naga wants to tap into an even broader group of investors. 

SMC-Research considers the share to be far too cheap: The analysts expect Naga's sales to roughly double in 2022 as well. Successful capital increases have also increased the scope for growth investments. The analysts now believe the share is worth 12.70 euros instead of the previous 11.70 euros (currently 7 euros) and confirm the buy recommendation. 

fashionette as Cyber Week winner

For a long time, the share of the online retailer for fashion accessories fashionette did not fare so well. The share price fell from 32 euros at the end of 2020 to a low of less than 16 euros (see interview). Recently, there has been a significant recovery, and the share is currently traded at 23.80 euros. 

In the opinion of Hauck & Aufhäuser, this is still far too little, the analysts rate the share as "Buy" and name a price target of 60 euros, which is far above the current price. The company had outperformed other online retailers during Cyber Week, they said, and the valuation of the securities appeared highly attractive. Praised the introduction of numerous new products from noble brands in the beauty sector, the business is an ideal fit for the operator of an online store for premium and luxury brands.

Further recommendations for scale shares

Research houseScale-CompaniesRecomendationPrice targetPrice in euro
First BerlinDeutsche RohstoffBuy31.0020.20
GBCDeutsche GrundstücksauktionenBuy29.5024.80
SMC ResearchBlue CapBuy47.0031.40
SMC Research2G EnergyHold113.0099.90
First Berlin2G EnergyAdd131.0099.90
GBCEQS GroupBuy47.3541.20
GSC ResearchEQS GroupBuy50.0041.20
First BerlinMedia and Games InvestBuy8.203.96

Three questions for... this time: Daniel Raab, CEO of fashionette AG

The share price has recently recovered significantly following the losses this year. How do you explain this turnaround?

The third quarter was an important quarter for us. With the acquisition of Brandfield as of July 1, 2021, we presented for the first time a consolidated group result that was positively impacted by Brandfield. And by restoring our delivery promise at fashionette to approximately two business days after the logistics migration, we were already able to realize accelerated growth from October at 29 percent, which was confirmed in November at 25 percent compared to the same period last year. 

After the acquisition of Brandfield: What are fashionette's future plans?

We continue to focus on our three strategic priorities to drive our profitable growth: geographic expansion, assortment expansion, and continued investment in our IT and data platform. In the short term, we will drive the integration of Brandfield and create synergies in the use of Group-wide data and processes as well as the continued expansion of our assortments. 

From an investor's point of view: What speaks in favor of your share?

We have managed to grow profitably continuously since 2013. With the acquisition of Brandfield, we have demonstrated that we are significantly advancing our regional expansion announced at the IPO and driving our dynamic growth to become Europe's leading, data-driven online platform for premium and luxury fashion accessories. We are operating in an attractive market whose dynamic growth has just begun. We are ideally placed to tap this market potential in a value-enhancing way.

fashionette AG is a European e-commerce group for premium and luxury fashion accessories. On the online platforms fashionette.com and brandfield.com, it offers a selected range of products such as handbags, shoes and beauty products. Using its IT and data platform as well as state-of-the-art technologies and artificial intelligence, the company enables customers to make personalized online purchases.



by: Anna-Maria Borse

© 15 December 2021, Deutsche Börse AG

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