Original-Research: MWB AG (von NuWays AG): Hold

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Original-Research: MWB AG - from NuWays AG

04.12.2024 / 09:00 CET/CEST

Dissemination of a Research, transmitted by EQS News - a service of EQS

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Classification of NuWays AG to MWB AG

Company Name: MWB AG

ISIN: DE000A4032H1

Reason for the research: Update

Recommendation: Hold

from: 04.12.2024

Target price: EUR 50.00

Target price on sight of: 12 months

Last rating change:

Analyst: Henry Wendisch

Positive x-read but still muted secondhand market

Topic: Last week, The Platform Group (TPG) announced the takeover of

Chronext which highlights the interest in secondhand watch dealers such as

MWB, in our view. On the other hand, current data still show a muted

secondhand watch market. In detail:

TPG announced the acquisition of Chronext via an asset-deal out of

insolvency under self-administration. While no transcation data were

disclosed, we expect TPG to have paid 5-10x EBITDA based on past TPG

acquisitions. However, we do not regard this as a fair valuation cross-read

for MWB, because (1) Chronext was bought out of insolvency, pushing down the

price, (2) MWB operates as a broker (vs. Chronext as a mix of retailer and

broker) and (3) MWB is smaller and therefore not comparable. However, the

deal shows that companies such as TPG have a keen interest to expand into

the secondhand watch market, which will remain a large and vibrant part of

the overall watch market, due to artificial scarcity on the firsthand

market.

On the other hand, market prices on the secondhand market have continued to

decline throughout 2024 and now seem to stabilize at trough levels. (see p.

2) As this leads to reluctance at investor type watch buyers, fearing a

further decline in the future, the still low inventory turnover (pre-owned

Rolex watches took an average of 67 days to sell in H1'2024 vs. 18 days in

2021, Source: Forbes) also indicates a much lower no. of watches sold. Both

effects lead to tough market conditions. Light at the end of the tunnel

could come from continously strong capital and crypto markets, as

investor-type watch buyers might take profits there and shift asset

allocation more towards watches.

MWB however is only a small piece of the overall market and with its

elaborate network of repeat customers a bit more immune against overall

market dynamics. Especially the sale of just a few higher priced watches can

significantly affect sales positively. Moreover, MWB is in a comfortable

position to capture growth in the next years, as its unique USPs of (1) a

high level of trust among customers (vs. some concerning Chronext reviews on

Trustpilot) and (2) of finding a desired watch within 7 days remain fully

intact, even at current market conditions, which shows their potential to

capture market share.

Against this backdrop, we view MWB as too early to buy and thus reiterate

our HOLD recommendation, with unchanged PT of EUR 50.00, based on DCF.

You can download the research here: http://www.more-ir.de/d/31481.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: research@nuways-ag.com

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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2043619 04.12.2024 CET/CEST

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