Original-Research: 123fahrschule SE - from NuWays AG 22.10.2024 / 09:01 CET / CEST Dissemination of a Research, transmitted by EQS News - a service of EQS Group AG.

Original-Research: 123fahrschule SE (von NuWays AG): Buy

Original-Research: 123fahrschule SE - from NuWays AG

22.10.2024 / 09:01 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group AG.
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 123fahrschule SE

     Company Name:                123fahrschule SE
     ISIN:                        DE000A2P4HL9

     Reason for the research:     Update
     Recommendation:              Buy
     from:                        22.10.2024
     Target price:                EUR 7.20
     Target price on sight of:    12 months
     Last rating change:
     Analyst:                     Philipp Sennewald

Legislation changes to fuel further growth

Yesterday, we held a digital roundtable with 123fahrschule, where CEO Boris
Polenske outlined the implications of the recently announced amendments to
the learner driver training in Germany. To remind you, last week, Germany's
Federal Ministry of Transport (BMDV) held an information event, where it
provided comprehensive insights into the amendment of the learner driver
training. The main highlights were the re-introduction of online theory as
well as the use of driving simulators for up to 10 lessons. The changes are
expected to come into effect in Q1'26e and are seen to significantly change
and improve driving school training going forward. In detail:

Online Theory. Starting 2026, driving schools will be allowed to
re-introduce online lectures, comprising up to 6 of the total 14 lectures.
While this should save the time resources of driving instructors and hence
increase efficiency, it will also have positive impacts on students. In
fact, 123f plans to introduce two oneday seminars, comprising 8 lectures in
presence in central locations. Afterwards, the theoretical training moves on
to online courses, which will take place daily except for Sundays, offering
students increased flexibility. Moreover, as students will have to attend
only 2 days in presence, we expect an increased willingness to travel also
longer distances of up to 30 minutes, thus increasing 123's catchment area.
In our view, this should enable 123f to significantly increase local market
share.

Driving simulators. The BMDV also announced that driving simulators will be
a part of the education going forward, as learner drivers will be allowed to
complete their manual gearbox training on the simulator. This has several
positive implications for 123f. (1) From 2026, 123f will no longer need
switchgear vehicles, which alone should result in an annual EBIT effect of EUR
0.4m. (2) It compensates for the shortage of driving instructors. (3) As 30%
of the practical training gets shifted to the simulator, driving instructors
are able to drive more lessons per student and week. (4) Given the
comparably low costs of operating a simulator, 123f will be able to achieve
similar contribution margins while offering its product at a lower price
than the competition, which should increase the market share of the company
further, as smaller, local peers will not be able to equip their branches
with simulators due to cost and space issues.

Overall, the information provided by the BMDV fully underpins our
expectations and should further boost 123f's top-line growth as well as
margin expansion going forward. In light of the tailwinds, 123f remains a
BUY with an unchanged PT of EUR 7.20 based on DCF.

You can download the research here: http://www.more-ir.de/d/31083.pdf
For additional information visit our website: www.nuways-ag.com/research

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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2012985 22.10.2024 CET/CEST