Original-Research: Advanced Blockchain AG (von GBC AG): Buy

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Original-Research: Advanced Blockchain AG - from GBC AG

Classification of GBC AG to Advanced Blockchain AG

Company Name: Advanced Blockchain AG
ISIN: DE000A0M93V6

Reason for the research: Research Comment
Recommendation: Buy
Target price: 17.64 EUR
Target price on sight of: 31.12.2025
Last rating change:
Analyst: Matthias Greiffenberger, Julien Desrosiers

Company performance in a challenging environment exceeds expectations with
significant value increases in the top 10 portfolio positions - target
price raised to EUR17.64 (previously: EUR11.00)
 
Advanced Blockchain AG has published preliminary figures for the fiscal
year 2023. The revenue of Advanced Blockchain AG fell to EUR5.2 million in
2023 (from EUR14.73 million the previous year), but still exceeded the
forecasted mark of EUR5.0 million. The significant increase in preliminary
EBIT to EUR2.2 million, an improvement of more than 40% compared to 2022,
demonstrates effective cost control and a strengthened focus on high-margin
activities.
 
The appreciation of the top 10 portfolio (according to AVS appraisal) from
EUR39.65 million by more than 45% to EUR57.5 million is particularly
noteworthy. This shows Advanced Blockchain AG's strategic competence in
investing early in promising blockchain technologies and successfully
developing them. With the development of the AI-supported research platform
'ABX Analytics,' Advanced Blockchain AG continues to position itself as a
leader in innovation in the blockchain sector and aims to expand its
service offering and generate stable, recurring revenues.
 
Furthermore, Advanced Blockchain AG has started the new fiscal year 2024
with impressive financial results. The company has already generated over
EUR1 million this year and over EUR3 million in the last ten months from the
sale of assets, which were sold at significant profits. As of April 15,
2024, the company's cash balance amounts to more than EUR2 million.
 
Advanced Blockchain AG plans to use the free capital to drive its expansion
plans. A notable investment was the acquisition of rights to Celestia (TIA)
tokens, which have already generated a significant book profit exceeding
ten times the original investment.
 
In summary, Advanced Blockchain positions itself successfully for further
growth in the dynamic blockchain industry through effective asset
management and strategic investments. As part of the growth strategy,
Advanced Blockchain is actively recruiting new talent to strengthen the
team and further advance the development of ABX Analytics.
 
Given the recent surge in Bitcoin to an all-time high, we see a significant
improvement in the market environment. This leads us to gradually reduce
our valuation discount, which was set during the 'Crypto Winter.'
Therefore, we are raising our rating for Advanced Blockchain AG's shares.
The Bitcoin halving, expected tonight at 22:30, will halve the reward for
mining a block from 6.25 to 3.125 Bitcoins. Historically, such halvings
have led to significant price increases as they slow down the new
production of Bitcoins.
 
The current undervaluation of Advanced Blockchain AG is particularly
evident when considering only the 10 largest positions in the portfolio and
the entire market capitalization. These top positions alone, according to
the AVS valuation report, represent a fair value of at least EUR57.5 million,
while the market capitalization of Advanced Blockchain is currently only
about EUR15.14 million (Tradegate 19.04.2024 11:01). We estimate the total
value of the portfolio, including updated valuations, at around EUR105
million. We estimate the holding costs at about EUR2 million. Thus, we have
estimated the company value based on the net asset value (NAV) at about
EUR103 million, which corresponds to a value of EUR27.14 per share. With the
significantly improved market situation in the crypto markets, we are
gradually reducing our original 'Crypto Winter' discount from 53% to 35%.
 
This has led us to determine a fair value per share of EUR17.64 (previously:
EUR11.00). Given the considerable upside potential, we assign a 'buy' rating.

You can download the research here:
http://www.more-ir.de/d/29473.pdf

Contact for questions
GBC AG
Halderstraße 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter:
http://www.gbc-ag.de/de/Offenlegung
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Date (time) of completion: 19.04.2024 (12:40)
Date (time) of first publication: 19.04.2024 (14:00)

-------------------transmitted by 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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Quelle: dpa-AFX