First Berlin – M1 Kliniken AG Research Update (06/08/2019)

First Berlin Equity Research has published a research update on M1 Kliniken AG (ISIN: DE000A0STSQ8). Analyst Christian Orquera reiterated his BUY rating and increased the price target from EUR 19.20 to EUR 19.80.

M1 Kliniken AG reported financial results for FY/18. Group revenues were better than expected at €65.2m (FBe: €59.1), growing by an impressive 38% (FBe: +25%). EBT came in at €8.1m (FBe: €8.6m) and was slightly lower than anticipated. We believe that due to the ongoing aggressive business expansion, the company incurred marginally higher costs. Usually, start-up measures at new locations translate into sales with some delay. M1 trained more than 60 new doctors at the M1 Academy last year. The company reported net profit of €6.6m which was better than expected (FB: €6.2m) due chiefly to a low corporate tax rate of 18.3% (vs. FB: 28%). Management gave a positive outlook for 2019 and expects sales and EBT to continue growing at a double digit rate. Beside the ongoing German and international clinic expansion, the company recently broadened its ?M1 Select? product range with new skin care cosmetics. We continue to expect strong growth in 2019 and beyond. In light of 2018 results, we have fine- tuned our 2019-2021 forecasts. These measures, accompanied by the effect of rolling over our DCF-model, led to a slightly higher price target of €19.80 (old: €19.20). We reiterate our Buy rating.