First Berlin – ABO Invest AG Research Update (14/09/2020)

First Berlin Equity Research has published a research update on ABO Invest AG (ISIN: DE000A1EWXA4). Analyst Dr. Karsten von Blumenthal reiterated his ADD rating and increased the price target from EUR 2.20 to EUR 2.30.

ABO Invest presented half-year figures which, thanks to good wind conditions, were well above the previous year's figures and slightly above our estimates. A 15% y/y increase in electricity production led to a 13% increase in sales to €19.5m. The net result of €2.3m more than doubled the prior year figure. A high free cash flow of €16m led to a €5.0m net inflow of funds despite interest and redemption payments and increased cash and cash equivalents to €19.7m. We thus see ABO Invest as well positioned to quickly implement the planned new growth strategy. At an extraordinary general meeting on 8 October, the course will be laid for a new market presence and improved growth opportunities. After the better than expected half-year figures and taking into account the weak summer months of July and August, we have increased our estimates for the full year. An updated DCF model yields a new price target of €2.30 (previously: €2.20). We confirm our Add recommendation.