Original-Research: 123fahrschule SE (von NuWays AG): Buy

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Original-Research: 123fahrschule SE - from NuWays AG

22.10.2024 / 09:01 CET/CEST

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

Group AG.

The issuer is solely responsible for the content of this research. The

result of this research does not constitute investment advice or an

invitation to conclude certain stock exchange transactions.

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Classification of NuWays AG to 123fahrschule SE

Company Name: 123fahrschule SE

ISIN: DE000A2P4HL9

Reason for the research: Update

Recommendation: Buy

from: 22.10.2024

Target price: EUR 7.20

Target price on sight of: 12 months

Last rating change:

Analyst: Philipp Sennewald

Legislation changes to fuel further growth

Yesterday, we held a digital roundtable with 123fahrschule, where CEO Boris

Polenske outlined the implications of the recently announced amendments to

the learner driver training in Germany. To remind you, last week, Germany's

Federal Ministry of Transport (BMDV) held an information event, where it

provided comprehensive insights into the amendment of the learner driver

training. The main highlights were the re-introduction of online theory as

well as the use of driving simulators for up to 10 lessons. The changes are

expected to come into effect in Q1'26e and are seen to significantly change

and improve driving school training going forward. In detail:

Online Theory. Starting 2026, driving schools will be allowed to

re-introduce online lectures, comprising up to 6 of the total 14 lectures.

While this should save the time resources of driving instructors and hence

increase efficiency, it will also have positive impacts on students. In

fact, 123f plans to introduce two oneday seminars, comprising 8 lectures in

presence in central locations. Afterwards, the theoretical training moves on

to online courses, which will take place daily except for Sundays, offering

students increased flexibility. Moreover, as students will have to attend

only 2 days in presence, we expect an increased willingness to travel also

longer distances of up to 30 minutes, thus increasing 123's catchment area.

In our view, this should enable 123f to significantly increase local market

share.

Driving simulators. The BMDV also announced that driving simulators will be

a part of the education going forward, as learner drivers will be allowed to

complete their manual gearbox training on the simulator. This has several

positive implications for 123f. (1) From 2026, 123f will no longer need

switchgear vehicles, which alone should result in an annual EBIT effect of EUR

0.4m. (2) It compensates for the shortage of driving instructors. (3) As 30%

of the practical training gets shifted to the simulator, driving instructors

are able to drive more lessons per student and week. (4) Given the

comparably low costs of operating a simulator, 123f will be able to achieve

similar contribution margins while offering its product at a lower price

than the competition, which should increase the market share of the company

further, as smaller, local peers will not be able to equip their branches

with simulators due to cost and space issues.

Overall, the information provided by the BMDV fully underpins our

expectations and should further boost 123f's top-line growth as well as

margin expansion going forward. In light of the tailwinds, 123f remains a

BUY with an unchanged PT of EUR 7.20 based on DCF.

You can download the research here: http://www.more-ir.de/d/31083.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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2012985 22.10.2024 CET/CEST

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