2021 expectations clearly exceeded
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The preliminary 2021 figures of Frequentis AG (ISIN ATFREQUENT09, General Standard, FQT GY; revenue: €330 million; EBIT: €28 million) have significantly exceeded our previous expectations (revenue: €320 million; EBIT: €21.7 million). In addition to a good business development of the companies acquired from L3 Harris Technologies, profitable project completions contributed significantly to the significant increase in sales and earnings. Despite pandemic-related delays in contract award processes, order intake also expanded to €330 million (previous year: €314.6 million). We are adjusting our 2021 estimates but leave 2022ff largely unchanged for the time being. With a 2022 EV/sales of 0.96, the share is favorably valued compared to the peer group (median: 1.12).
The DCF analysis yields a value per share of €24.19 and the peer group analysis based on 2021, 2022 and 2023 yields an average value per share of €36.73. With equal weighting of both approaches, the Fair Value per Frequentis share is €30.46. Our fair value is thus just under 10% above the current share price and leads to our investment recommendation of "Hold".
Frequentis AG is an Austria-based supplier of communications and information systems, diversifying its activities into two business segments: ATM (Air Traffic Management) business segment, which includes ATM Civil, including Information Management, and Defense business fields, and PST (Public Safety & Transport) business segment, which includes Public Safety, Public Transport and Maritime business fields. As of December 31, 2010, the Company had seven wholly owned subsidiaries in the area of Sales & Operations, four wholly owned subsidiaries and one majority owned subsidiary, as well as one affiliate, APUS Software GmbH, in the area of Software, and two wholly owned, one majority owned, one minority owned, as well as one affiliate, 3T Communications AG, in the area of Services. The Company's subsidiaries are located in the United States, the United Kingdom, Canada, Australia, Germany, Singapore, Slovak Republic, Romania, and the Czech Republic.
Since 2007, BankM AG (Frankfurt am Main, Germany) is the partner of small and medium-sized enterprises and specializing in capital market financing with its experienced, interdisciplinary team. SME customers benefit from individual service and rapid access to selected investors that fit their needs. BankM's services include capital market advisory, arranging IPOs and capital increases for equity financing, debt advisory and debt capital mediation, designated sponsoring and research as well as M&A, hereby specializing in the identification of suitable strategic partners in China.
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