Original-Research: Coreo AG (von GBC AG): BUY

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Original-Research: Coreo AG - von GBC AG

Einstufung von GBC AG zu Coreo AG

Unternehmen: Coreo AG
ISIN: DE000A0B9VV6

Anlass der Studie: Research Note
Empfehlung: BUY
Kursziel: 2.60 Euro
Kursziel auf Sicht von: 31.12.2021
Letzte Ratingänderung:
Analyst: Cosmin Filker; Marcel Goldmann

Issue of a 6.75% bond with a volume of up to EUR 30 million for the
expansion of the real estate portfolio and for the premature repayment of
the bond with warrants attached 2018/2022

On August 13, 2020, Coreo AG announced the issue of a 6.75% corporate bond
with a volume of up to EUR 30 million and a term of 5 years. The public
offering is scheduled to take place in the period 24.08.2020 to 08.09.2020.
The security has a coupon of 6.75 % p.a. payable semi-annually. The listing
is to take place on the Freiverkehr of the Frankfurt Stock Exchange.

The Company plans to use the bond funds primarily to finance the further
growth of its residential and commercial real estate portfolio. The focus
here is on the Value Add segment in mid-centre locations in Germany.
According to the latest available figures as of December 31, 2019, Coreo AG
has a property portfolio (IFRS) of EUR 44.38 million. For further
properties acquired in 2019 with a volume of just under EUR20 million, the
transfer of benefits and burdens did not take place until the first half of
2020. The long-term investment plan foresees a significant expansion to
over EUR400 million over the next 4 - 5 years. If a loan-to-value of 75% is
assumed for property financing, Coreo AG would have to raise new capital of
around EUR85 million for the outstanding investments in the coming fiscal
years. In addition to the access to liquidity from the planned value-
enhancing sales, part of this is to be provided by the current bond issue.

However, the company also intends to use the proceeds of the issue to
redeem the option bond, which runs until 2022 and has a current outstanding
volume of EUR15 million, ahead of schedule. In this case, the company would
achieve an immediate improvement in earnings, as the warrant bond has a
coupon of 10%, which no longer corresponds to the company's development
since the issue. If it were to be repaid in full, annual interest savings
of EUR 0.49 million p.a. would be achieved.

In our last research study (see study dated 17 June 2020), we assumed a
significant expansion of the property portfolio and real estate projects in
the coming financial years. For the current financial year, we expect
investments totaling EUR 40 million. To this extent, the funds from the
bond issue would increase the financial basis for the corporate growth we
have assumed. The key creditworthiness figures derived from our unchanged
forecasts are comparatively sound. The expected EBIT interest coverage
ratio for the current fiscal year is 2.4 and is expected to increase
significantly to 3.6 as early as 2021.

In the course of the current bond issue, we conducted an interview with
Coreo board member Marin Marinov. This is available at http://www.more-
ir.de/d/21403.pdf.

Die vollständige Analyse können Sie hier downloaden:
http://www.more-ir.de/d/21459.pdf

Kontakt für Rückfragen
Jörg Grunwald
Vorstand
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: (4,5a,6a,11); Einen Katalog mölicher Interessenkonflikte finden Sie unter:
http://www.gbc-ag.de/de/Offenlegung.htm
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Date (time) completion german version: 20.08.20 (14:05)
Date (time) first distribution german version: 20.08.20 (15:00)
Date (time) completion english version: 26.08.20 (09:55 am)
Date (time) first distribution english version: 26.08.20 (11:00 am)

-------------------übermittelt durch die EQS Group AG.-------------------

Für den Inhalt der Mitteilung bzw. Research ist alleine der Herausgeber bzw.
Ersteller der Studie verantwortlich. Diese Meldung ist keine Anlageberatung
oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.

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Quelle: dpa-AFX