Original-Research: DEMIRE AG - from NuWays AG 24.02.2025 / 09:25 CET / CEST Dissemination of a Research, transmitted by EQS News - a service of EQS Group.

Original-Research: DEMIRE AG (von NuWays AG): BUY

Original-Research: DEMIRE AG - from NuWays AG

24.02.2025 / 09:25 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group.
The issuer is solely responsible for the content of this research. The
result of this research does not constitute investment advice or an
invitation to conclude certain stock exchange transactions.

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Classification of NuWays AG to DEMIRE AG

     Company Name:                DEMIRE AG
     ISIN:                        DE000A0XFSF0

     Reason for the research:     Update
     Recommendation:              BUY
     from:                        24.02.2025
     Target price:                EUR 15.00
     Target price on sight of:    12 months
     Last rating change:
     Analyst:                     Philipp Sennewald

What's ahead in FY25e after successful refinancing? Chg.

Topic: Following the successful refinancing of DEMIRE's EUR 600m corporate
bond (EUR 499m outstanding notional) in Q4'24, we take a look at the company's
prospects for FY25e and beyond.

Mind you, that the bond was extended until YE'27 with an increased cash
coupon of 5% as well as a 3% PIK coupon in 2027. Moreover, the refinancing
framework obliges DEMIRE to reduce the outstanding notional, which stands at
EUR 253m following a tender for EUR 50m at par and a tender for EUR 196m at
76.25%, by another EUR 50m in FY25e and '26e respectively. Otherwise, the
company would have to pay a penalty fee of 3% in FY25e and 2% in FY26e.

We hence expect management to dispose further assets in the course of the
year (eNuW: EUR 89m GAV) as well as next year (eNuW: EUR 43m GAV). In our view
the company is likely going to sell several smaller to mid-sized assets
(eNuW: EUR 10-40m GAV each) at a maximum discount of 5%. The latter should
hereby be seen as conservative given easing market conditions in the real
estate sector, hence providing a certain upside to our estimates.

As a result of the ongoing disposals, we expect rental income to reduce to EUR
56.0m in FY25e and EUR 52.3m in FY26e. Besides the reduced asset base, the
high share of CPI-linked rental contracts is seen to have a positive effect
while the increasing number of insolvencies and thus a higher vacancy will
have the opposite effect. On the bottom line, FFO is seen to come down to EUR
17.1m this year and EUR 16.1m in the following driven by the same effects.

On a positive note, the targeted CapEx measures are set to improve the
attractiveness of the portfolio to tenants, potentially improving WAULT and
vacancy. Moreover, the company currently has no incremental financing needs
thanks to the refinancing and operating cash generation.

Against this backdrop, current valuation remains undemanding as the stock is
trading on a 76% discount to its NAV. We hence maintain our BUY
recommendation with an unchanged PT of EUR 1.50 based on our NAV model.

You can download the research here: http://www.more-ir.de/d/31833.pdf
For additional information visit our website:
https://www.nuways-ag.com/research-feed

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: [e-mail]
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss
bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben
analysierten Unternehmen befinden sich in der vollständigen Analyse.
++++++++++

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2090305 24.02.2025 CET/CEST