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First Berlin Equity Research
First Berlin Equity Research GmbH is one of the companies monitored by BaFin with regard to its compliance with the requirements of Section 85 (1) sentence 1 of the German Securities Trading Act [WpHG], art. 20 (1) Market Abuse Regulation (MAR) and Markets in Financial Instruments Directive (MiFID) II, Markets in Financial Instruments Directive (MiFID) II Commission Delegated Regulation and Markets in Financial Instruments Regulations (MiFIR).
First Berlin Equity Research GmbH
Vertreten durch den Geschäftsführer: Martin Bailey
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First Berlin Equity Research GmbH
Company responsible for preparation: First Berlin Equity Research GmbH, Friedrichstr. 69, 10117 Berlin
Person responsible for forwarding or distributing this financial analysis: Martin Bailey
Copyright© 2023 First Berlin Equity Research GmbH No part of this financial analysis may be copied, photocopied, duplicated or distributed in any form or media whatsoever without prior identified permission from First Berlin Equity Research GmbH. First Berlin Equity Research GmbH shall be specified as the source in the case of quotations. Further information is available on request.
Information pursuant to Section 85 (1) sentence 1 of the German Securities Trading Act [WpHG], to art. 20 (1) of Regulation (EU) No 596/2014 of the European Parliament and of the Council of April 16, 2014, on market abuse (market abuse regulation) and to art. 37 of Commission Delegated Regulation (EU) No 2017/565 (MiFID) II.
First Berlin Equity Research GmbH (hereinafter referred to as: “First Berlin”) prepares financial analyses while taking the relevant regulatory provisions, in particular section 85 (1) sentence 1 of the German Securities Trading Act [WpHG], art. 20 (1) of Regulation (EU) No 596/2014 of the European Parliament and of the Council of April 16, 2014, on market abuse (market abuse regulation) and art. 37 of Commission Delegated Regulation (EU) no. 2017/565 (MiFID II) into consideration. In the following First Berlin provides investors with information about the statutory provisions that are to be observed in the preparation of financial analyses.
Conflicts of Interest
In accordance with art. 37 (1) of Commission Delegated Regulation (EU) no. 2017/565 (MiFID) II and art. 20 (1) of Regulation (EU) No 596/2014 of the European Parliament and of the Council of April 16, 2014, on market abuse (market abuse regulation) investment firms which produce, or arrange for the production of, investment research that is intended or likely to be subsequently disseminated to clients of the firm or to the public, under their own responsibility or that of a member of their group, shall ensure the implementation of all the measures set out in Article 34 (3) of Regulation (EU) 2017/565 in relation to the financial analysts involved in the production of the investment research and other relevant persons whose responsibilities or business interests may conflict with the interests of the persons to whom the investment research is disseminated. In accordance with art. 34 (3) of Regulation (EU) 2017/565 the procedures and measures referred to in paragraph 2 (b) shall be designed to ensure that relevant persons engaged in different business activities involving a conflict of interests carry on those activities at a level of independence appropriate to the size and activities of the investment firm and of the group to which it belongs, and to the risk of damage to the interests of clients.
First Berlin offers a range of services that go beyond the preparation of financial analyses. Although First Berlin strives to avoid conflicts of interest wherever possible, First Berlin may maintain the following relations with the analysed company, which in particular may constitute a potential conflict of interest (further information and data may be provided on request):
- The author, First Berlin, or a company associated with First Berlin holds an interest of more than five percent in the share capital of the analysed company;
- The author, First Berlin, or a company associated with First Berlin provided investment banking or consulting services for the analysed company within the past twelve months for which remuneration was or was to be paid;
- The author, First Berlin, or a company associated with First Berlin reached an agreement with the analysed company for preparation of a financial analysis for which remuneration is owed;
- The author, First Berlin, or a company associated with First Berlin has other significant financial interests in the analysed company;
In order to avoid and, if necessary, manage possible conflicts of interest both the author of the financial analysis and First Berlin shall be obliged to neither hold nor in any way trade the securities of the company analyzed. The remuneration of the author of the financial analysis stands in no direct or indirect connection with the recommendations or opinions represented in the financial analysis. Furthermore, the remuneration of the author of the financial analysis is neither coupled directly to financial transactions nor to stock exchange trading volume or asset management fees.
If despite these measures one or more of the aforementioned conflicts of interest cannot be avoided on the part of the author or First Berlin, then reference shall be made to such conflict of interest.
Information pursuant to section 64 of the German Securities Trading Act [WPHG], directive 2014/65/EU of the european parliament and of the council of 15 May 2014 on markets in financial instruments and amending directive 2002/92/EC and directive 2011/61/EU, accompanied by the Markets In Financial Instruments Regulation (MIFIR, REG. EU NO. 600/2014).
First Berlin notes that is has concluded a contract with the issuer to prepare financial analyses and is paid for that by the issuer. First Berlin makes the financial analysis simultaneously available for all interested security financial services companies. First Berlin thus believes that it fulfils the requirements of section 64 WpHG for minor non-monetary benefits.
Key Sources of Information
The key sources of information consulted for preparation of the financial analysis consist of publications in news services (among others, Reuters, VWD, Bloomberg, DPA-AFX, DGAP), domestic and foreign specialized media (among others, Börsenzeitung, Handelsblatt, Frankfurter Allgemeine Zeitung, Financial Times), trade publications, published statistics, rating agencies as well as the publications of the analysed company.
Price Target Dates
Unless otherwise indicated, current prices refer to the closing prices of the previous trading day.
Agreement with the Analysed Company and Maintenance of Objectivity
The present financial analysis is based on the author’s own knowledge and research. The author prepared this study without any direct or indirect influence exerted on the part of the analysed company. Parts of the financial analysis were possibly provided to the analysed company prior to publication in order to avoid inaccuracies in the representation of facts. However, no substantial changes were made at the request of the analysed company following any such provision.
Asset Valuation System
First Berlin’s system for asset valuation is divided into an asset recommendation and a risk assessment.
The recommendations determined in accordance with the share price trend anticipated by First Berlin in the respectively indicated investment period are as follows:
|Current market capitalisation (in €)||0 – 2 billion||> 2 billion|
|Strong Buy¹||An expected favourable price trend of:||> 50%||> 30%|
|Buy||An expected favourable price trend of:||> 25%||> 15%|
|Add||An expected favourable price trend of:||0% to 25%||0% to 15%|
|Reduce||An expected favourable price trend of:||0% to -15%||0% to -10%|
|Sell||An expected favourable price trend of:||< -15%||< -10%|
¹ The expected price trend is in combination with sizable confidence in the quality and forecast security of management.
Our recommendation system places each company into one of two market capitalisation categories. Category 1 companies have a market capitalisation of €0 – €2 billion, and Category 2 companies have a market capitalisation of > €2 billion. The expected return thresholds underlying our recommendation system are lower for Category 2 companies than for Category 1 companies. This reflects the generally lower level of risk associated with higher market capitalisation companies.
The First Berlin categories for risk assessment are low, average, high and speculative. They are determined by ten factors: Corporate governance, quality of earnings, management strength, balance sheet and financial risk, competitive position, standard of financial disclosure, regulatory and political uncertainty, strength of brandname, market capitalisation and free float. These risk factors are incorporated into the First Berlin valuation models and are thus included in the target prices. First Berlin customers may request the models.
Valuation Methods and Principles
Valuations and the ratings derived from them are prepared with the greatest possible care while taking all of the relevant recognizable factors into consideration at the respective point in time. For the majority of companies the earnings statement, balance sheet and cash flow are estimated and projected into the future over a period of several years. Depending on the circumstances, a combination of several valuation methods is used for valuation of a company and an estimate of the share price trend in the future.
The following valuation methods are used when it comes to the valuation of companies: multiplier models (PER, price/cash flow, price/book value, enterprise value (EV)/sales, EV/EBIT, EV/EBITA, EV/EBITDA), peer group comparisons, historical valuation, discounting models (DCF, DDM), liquidation valuations or asset valuation methods.
Sensitivity of the Valuation Parameters
The valuation models are influenced by macroeconomic values such as interest rates, currency exchange rates, raw materials prices and economic forecasts. Moreover, market sentiment also has an influence on the valuation of companies. The figures underlying the valuation of an enterprise taken from the earnings statement, the cash flow statement and the balance sheet represent estimates at a specific point in time and are thus subject to risk. They may change at any time without prior notice.
Unless otherwise stated in the financial analysis, the ratings refer to an investment period of twelve months.
At the time of publication of this financial analysis it is not certain whether, when and on what occasion an update will be provided. In general First Berlin strives to review the financial analysis for its topicality and, if required, to update it in a very timely manner in connection with the reporting obligations of the analysed company or on the occasion of ad hoc notifications.
Subject to Change
The opinions contained in the financial analysis reflect the assessment of the author on the day of publication of the financial analysis. The author of the financial analysis reserves the right to change such opinion without prior notification.
SUPERVISORY AUTHORITY: Bundesanstalt für Finanzdienstleistungsaufsicht (German Federal Financial Supervisory Authority) [BaFin], Graurheindorferstraße 108, 53117 Bonn and Marie-Curie-Straße 24-28, 60439 Frankfurt am Main
Reliability of Information and Sources of Information
The information contained in this study is based on sources considered by the author to be reliable. Comprehensive verification of the accuracy and completeness of information and the reliability of sources of information has neither been carried out by the author nor by First Berlin. As a result no warranty of any kind whatsoever shall be assumed for the accuracy and completeness of information and the reliability of sources of information, and neither the author nor First Berlin, nor the person responsible for passing on or distributing the financial analysis shall be liable for any direct or indirect damage incurred through reliance on the accuracy and completeness of information and the reliability of sources of information.
Reliability of Estimates and Forecasts
The author of the financial analysis made estimates and forecasts to the best of the author’s knowledge. These estimates and forecasts reflect the author’s personal opinion and judgement. The premises for estimates and forecasts as well as the author’s perspective on such premises are subject to constant change. Expectations with regard to the future performance of a financial instrument are the result of a measurement at a single point in time and may change at any time. The result of a financial analysis always describes only one possible future development – the one that is probable from the perspective of the author – of a number of possible future developments.
Any and all market values or target prices indicated for the company analysed in this financial analysis may not be achieved due to various risk factors, including but not limited to market volatility, sector volatility, the actions of the analysed company, economic climate, failure to achieve earnings and/or sales forecasts, unavailability of complete and precise information and/or a subsequently occurring event which affects the underlying assumptions of the author and/or other sources on which the author relies in this document. Past performance is not an indicator of future results; past values cannot be carried over into the future.
Consequently, no warranty of any kind whatsoever shall be assumed for the accuracy of estimates and forecasts, and neither the author nor First Berlin, nor the person responsible for passing on or distributing the financial analysis shall be liable for any direct or indirect damage incurred through reliance on the correctness of estimates and forecasts.
Information Purposes, No Recommendation, Solicitation, No Offer for the Purchase of Securities
The present financial analysis serves information purposes. It is intended to support institutional investors in making their own investment decisions; however in no way provide the investor with investment advice. Neither the author, nor First Berlin, nor the person responsible for passing on or distributing the financial analysis shall be considered to be acting as an investment advisor or portfolio manager vis-à-vis an investor. Each investor must form his own independent opinion with regard to the suitability of an investment in view of his own investment objectives, experience, tax situation, financial position and other circumstances.
The financial analysis does not represent a recommendation or solicitation and is not an offer for the purchase of the security specified in this financial analysis. Consequently, neither the author nor First Berlin, nor the person responsible for passing on or distributing the financial analysis shall as a result be liable for losses incurred through direct or indirect employment or use of any kind whatsoever of information or statements arising out of this financial analysis.
A decision concerning an investment in securities should take place on the basis of independent investment analyses and procedures as well as other studies including, but not limited to, information memoranda, sales or issuing prospectuses and not on the basis of this document.
No Establishment of Contractual Obligations
By taking note of this financial analysis the recipient neither becomes the customer of First Berlin, nor does First Berlin incur any contractual, quasi-contractual or pre-contractual obligations and/or responsibilities toward the recipient. In particular no information contract shall be established between First Berlin and the recipient of this information.
No Obligation to Update
First Berlin, the author and/or the person responsible person for passing on or distributing the financial analysis shall not be obliged to update the financial analysis. Investors must keep themselves informed about the current course of business and any changes in the current course of business of the analysed company.
Dispatch or duplication of this document is not permitted without the prior written consent of First Berlin.
Should any provision of this disclaimer prove to be illegal, invalid or unenforceable under the respectively applicable law, then such provision shall be treated as if it were not an integral component of this disclaimer; in no way shall it affect the legality, validity or enforceability of the remaining provisions.
Applicable Law, Place of Jurisdiction
The preparation of this financial analysis shall be subject to the law obtaining in the Federal Republic of Germany. The place of jurisdiction for any disputes shall be Berlin (Germany).
Notice of Disclaimer
By taking note of this financial analysis the recipient confirms the binding nature of the above explanations.
By using this document or relying on it in any manner whatsoever the recipient accepts the above restrictions as binding for the recipient.
Qualified Institutional Investors
First Berlin financial analyses are intended exclusively for qualified institutional investors.
This report is not intended for distribution in the USA, Canada and/or the United Kingdom (Great Britain).