While shares in Formycon, 2G and Cliq Digital continue to make particularly strong gains, it is another company that has performed best: drilling services provider Daldrup und Söhne. The three questions this time go to André Marques from EQS.
15 May 2023. FRANKFURT (Börse Frankfurt). The return of the small caps is still pending. The Scale segment, like the SDAX, continues to trade well below its 2021 highs, but analysts specializing in small caps consider Scale shares to be heavily undervalued, at least some do. The Scale All Share, which tracks all members, is at 1,237 points at midday Monday, down slightly from a month ago. The index has been treading water since the beginning of the year. By contrast, the DAX has risen by almost 13 percent.
But there are some segment winners: geothermal specialist Daldrup & Söhne (DE0007830572) remains the top performer over a one-year period. Since May 2022, the share price has risen from under 6 euros to currently 14.30 euros - more than a doubling of the share price. The company from Ascheberg in North Rhine-Westphalia is seen as a beneficiary of the energy transition. This is because Daldrup specializes in drilling, among other things for geothermal energy plants. The investment company SGT German Private Equity (DE000A1MMEV4) also performed well, with a share price increase of around 30 percent, the Düsseldorf-based streaming provider Cliq Digital (DE000A0HHJR3) with 26 percent and - due to the extremely good performance in 2022 - the biotech company Formycon (DE000A1EWVY8) with 24 percent. At the bottom end are Advanced Blockchain AG, Veganz Group and Helma Eigenheimbau with losses of 70 percent on a twelve-month view.
Daldrup: geothermal energy as a share price driver
Things are going like clockwork for Daldrup & Söhne, probably also due to good figures for 2022 and some recommendations. According to SMC Research, Daldrup fully met earnings expectations in the last financial year with earnings before interest and taxes of around 2 million euros, and the margin of 5.5 percent was in the upper range of the target range. SMC also sees the further earnings prospects as positive: geothermal energy is increasingly coming to the fore in heat supply, and the German government is pushing the issue. However, the analysts had already downgraded the recommendation to "Hold" in April - due to the good share price development. The target price of 11 euros is now well below the current valuation.
MuM with "best quarter ever
The share of software provider Mensch und Maschine (DE0006580806) is also on the up this year, at least some of the heavy losses from 2022 have been made up. The company had already increased sales and profits in 2022, and for the first three months of this year Mensch und Maschine (MuM) now reported "the best quarter ever" with double-digit sales as well as earnings growth.
For SMC Research, the share is not only a buy candidate, but a "Strong Buy". The analysts consider a price of 63.60 euros to be appropriate (currently 50 euros). Particularly spectacular in the first quarter: the development of operating cash flow, according to SMC. LBBW Research also continues to recommend a Buy and also trusts the share at 63.50 euros. "The development of the software division is more positive than we expected." MuM is positioned in strong niches with its own software solutions, which should also withstand an economic headwind, he said.
Ökoworld: Rowing back on aid for climate activists
Scale member Ökoworld (DE0005408686) recently made headlines. Ökoworld founder Alfred Platow had announced in early May via press release support for the goals of the Last Generation and the assumption of penalties for climate sticklers*. "Ökoworld is therefore massively publicly hostile. Also coworkers of the Ökoworld are personally attacked," explained Platow in a statement. "I had expected criticism, but not to this emotional extent." He therefore had to row back: The money is now to go to the environmental trust fund. In addition, Platow clarified that the money comes exclusively from private sources of "like-minded people and Weggefährt*innen" - and not from special assets of the Ökoworld funds or the company. The share had risen above 113 euros in 2021, but had lost heavily in 2022. The initial gains this year have already disappeared, and the share price currently stands at 36.10 euros.
Trading in scale shares in April once again shows the large preponderance of a few stocks: The highest turnover scale stock was again Formycon; in the past month, shares of the company worth 15 million euros were traded on Xetra and the Frankfurt floor. Second to fifth place went to 2G with 9.3 million euros, Cliq with 9.2 million euros, Deutsche Rohstoff with 3.2 million euros and Ibu-tec with 2.9 million euros. Since the beginning of the year, the gap between Formycon (83.3 million euros) and second-placed Cliq (35.7 million euros) is even greater.
EQS: Share price jumps after Bundesrat approval
EQS Group(< DE0005494165>), an international RegTech company for compliance solutions, is recommended by two analyst firms at once: by GSC with a target price of 32 euros, by GBC with a target price of 38 euros. Currently, the target price is 25 euros. According to the company, it offers "the leading cloud solution for compliance with the Whistleblower Protection Act for companies and public authorities". Delays in the implementation of the EU Whistleblower Directive into national law had recently weighed on the share. On May 12, the German Bundesrat, which had refused to approve the Whistleblower Protection Act in its then current version in February 2023. The EQS share price shot up from 20.5 to 25 euros (see interview).
Analysis house/bank | Scale-Company | Recommendation | Target price in Euro | Current rate in Euro |
First Berlin | Deutsche Rohstoff | Buy | 40.00 | 27.55 |
Montega | Cliq Digital | Buy | 75.00 | 27.35 |
SMC Research | Delignet | Buy | 10.70 | 6.95 |
SMC Research | Noratis | Buy | 20.00 | 10.10 |
SMC Research | 2G Energy | Buy | 30.00 | 24.20 |
SMC Research | Laiqon | Buy | 13.70 | 8.02 |
SMC Research | Blue Cap | Buy | 36.00 | 22.40 |
SMC Research | MVise | Hold | 2.00 | 0.625 |
The delays in transposing the EU Whistleblower Directive into national law meant that you were unable to achieve the original plans for 2022. How are things looking in 2023?
Very well. The laws have been launched in the most important markets of Germany, France, Spain and Italy and will come into force in the course of 2023. We expect this to provide strong growth impetus for EQS in 2023 and beyond.
The Whistleblower Protection Act is seen as an important growth driver. What role do your other segments play?
The other segments are also benefiting from the major trends of digitalization, regulation and sustainability. Some products are already more established and generate stable cash flows, others are at the very beginning of the growth cycle. The platform approach with all important workflows for the compliance department offers us great growth potential in the coming years.
From an investor's point of view: What speaks in favor of your stock?
With our solutions, we are the leading provider in strong growth markets that benefit from the three megatrends of digitalization, regulation, and sustainability in the long term. In addition, there are strong barriers to entry in our markets and customer loyalty is very high.
EQS Group is a leading international cloud software provider for corporate compliance, investor relations and ESG. The cloud-based software EQS Cockpit can be used to manage compliance processes, for example in the areas of whistleblower protection and case handling. EQS Group was founded in Munich in 2000. Today, the Group is represented in the world's major financial centers with around 600 employees.
by Anna-Maria Borse © 15 May 2023, Deutsche Börse AG
Silverio Marques
Anna-Maria Borse is a finance and economics editor specializing in financial markets/stock markets and economic topics.
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