First Berlin Equity Research has published a research update on Deutsche Effecten- und Wechsel- Beteiligungsgesellschaft AG (ISIN: DE0008041005). Analyst Christian Orquera reiterated his BUY rating and decreased the price target from EUR 2.90 to EUR 1.90.

Abstract
Deutsche Effecten- und Wechsel- Beteiligungsgesellschaft (DEWB) has published its H1/22 report and an update on its portfolio holdings. The financial results came in roughly as expected. DEWB had no income (H1/21: €9.4m profit from Muetec’s exit), and EBIT amounted to €-495k (FBe: €-500k; H1/21: €8.5m). DEWB’s listed portfolio holdings were hit by the downswing of the capital markets. DEWB’s NAV dropped to €1.59 by the end of June, and is currently at €1.23, whereas the company’s shares have been trading at a ~21-22% discount to NAV. The anchor shareholding, Lloyd Fonds AG (LFAG; will be renamed to LAIQON in Q4), saw significant proforma sales (-26%) and EBITDA declines due to the absence of performance fees (they represented ~50% of sales in H1/21) in the current difficult capital markets. Still, following the recent acquisitions (BV Holding and Growney), and the progress of its WealthTech LAIC, LFAG has a solid market position and its recurring business is healthy and delivering strong proforma sales growth (H1/22: +44%). The company gave a positive growth outlook until 2025. The fintech Aifinyo saw healthy business progress in H1/22 and has seen higher demand for its financing products. Unfortunately, the social trading NAGA Group had two profit warnings and its 2020 and 2021 results have been revised down, which triggered a strong share price decline. DEWB’s private holding portfolio seems to be progressing well. The marketplace for alternative investments Stableton even managed to raise CHF 15m in May to finance further expansion. Considering the challenging capital market environment and the lower portfolio valuation, we believe it is unlikely that DEWB will conduct an anticipated portfolio exit this year. We have therefore revised our projections for 2022 and going forward. We have also lowered our portfolio revaluation assumptions for 2022 and 2023, and adjusted the COE to reflect the increased risk-free rate. We have updated our residual income model and arrived at a lower price target of €1.90 (previously: €2.90). We reiterate our Buy rating based on DEWB’s promising portfolio and the share’s substantial upside potential from current levels.