Scale market report: "Stock market environment immensely challenging"

2022 was hardly an easy year on the stock market for any company, especially not the small ones. So it's all the more surprising that so many were able to completely detach themselves from it. Three questions this time go to Marc Laubenheimer of EV Digital Invest.

December 15, 2022 FRANKFURT (Frankfurt Stock Exchange). Beacon in difficult times: the share price performance of the youngest scale member Cantourage. From 6.48 to 16 euros, the share of the provider of medical cannabis has risen since listing on November 11 - more than two and a half times. At one point, Cantourage was even trading at 42 euros. By contrast, the shares of Porsche AG, another newcomer to the 2022 stock exchange, have "only" gained 24 percent since the IPO in October.

However, Cantourage is the exception, the Scale segment as a whole continues to struggle: While the DAX was able to recover a large part of its losses this year, the segment for small companies is not really getting off the ground. The Scale All Share, which tracks all Scale members, is at 1,267 points on Thursday morning, roughly the same level as a month ago. The Scale 30 selection index of the 30 most liquid stocks is currently at 1,158 points, down from 1,144 in mid-November.

A lot of red

Since the beginning of the year, this results in a minus of 33 percent for the Scale All Share and 23 percent for the Scale 30. However, the Scale segment is not alone in this: MDAX and SDAX are also sitting on much larger losses than their big brother DAX. Since the beginning of the year, they have lost 27 and 26 percent, while the DAX has "only" lost 9 percent. At least the Scale segment can still score in the long term: Over a three-year period, the Scale All Share is still up a total of 18 percent, while the MDAX and SDAX are down 8 percent and 3 percent respectively.  

Formycon (DE000A1EWVY8), Daldrup & Söhne (DE0007830572), Deutsche Rohstoff AG (DE000A0XYG76), SGT German Private Equity (DE000A1MMEV4) and Publity (<DE0006972508>) currently offer the strongest price performance over twelve months, with price gains of 24 to 70 percent. Almost all others have to cope with price losses. Advanced Blockchain AG (DE000A0M93V6), fashionette (DE000A2QEFA1) and Veganz Group (DE000A3E5ED2) remain at the bottom of the list.

Weak IPO year

2022 was also a weak IPO year: the only classic IPO in the Scale segment was the IPO of EV Digital Invest AG at the beginning of May with a volume of €6.3 million (see interview below) - Cantourage and Advanced Blockchain were listings. In 2021, two companies had raised a total of 137 million euros. Only 2019 without a single IPO was worse for the Scale segment.

Formycon as the new biontech? 

Deutsche Rohstoff AG is benefiting from high energy prices. It has just raised its forecast for 2022 once again: Oil and gas production in the fourth quarter was higher than expected, sales and profits would therefore be better than forecast in October. Formycon is also on the road to success. The share recently reached a new all-time high of 89 euros, and on Thursday morning it was 85.10 euros. The company from Martinsried near Munich is a supplier of biosimilars, i.e. low-cost biopharmaceutical follow-on products. Most recently, FYB201, a first product, was approved in the U.S., the EU and the UK. 
"The global launch of FYB201 and the revenues it is expected to generate are an important milestone in our transformation into a commercial-stage company," said Stefan Glombitza, CEO of Formycon, in presenting the nine-month figures. Incidentally, the largest individual shareholders in Formycon are the brothers Andreas and Thomas Strüngmann. They are among the richest Germans: after the sale of generics manufacturer Hexal for 5.6 billion euros in 2008, they provided Biontech with 150 million euros in start-up capital. 

Ibu Tec: Growth market for battery production

"A new star in the battery sky" is scale member Ibu-tec Advanced Materials (DE000A0XYHT5), according to the investor magazine "Der Aktionär". The background is that the specialty chemicals group from Thuringia now produces LFP battery material (lithium iron phosphate), an important component of batteries for electromobility and stationary energy storage. The most recent share price driver: Ibu-tec received a major development order in the battery sector from an international commercial vehicle manufacturer. The share price more than doubled in October and November to a peak of 36 euros, and is now 27 euros.

Helma share price plunges

Among the very big losers this year is Helma Eigenheimbau (<DE000A0EQ578>). The provider of solid houses is not only hit by the falling demand on the real estate market, but also by the insolvency of an important subcontractor. On November 24, Helma therefore slashed its profit forecasts for this year. Since the beginning of the year, the share price has almost quadrupled from 64 euros to the current 15.60 euros.

According to analysts, this is exaggerated. For example, GBC expects a price recovery and advises to buy. "The company is well positioned to participate in the overriding trends in residential and vacation property construction that continue to exist," the analysts explain, pointing to the extensive land portfolio and the sales potential from its development. "In addition, the properties, which were acquired on average four or five years ago, are likely to be accompanied by hidden reserves." However, the price target drops significantly from 54.35 euros to 29 euros.

Montega's price target of 32 euros is somewhat higher, but the recommendation is only "hold". The market environment is very tense due to the war in Ukraine, inflation and high construction interest rates and energy costs. Price levels in the German residential real estate market are therefore likely to come under pressure in 2023. "Visibility for 2023 remains significantly limited."