Customer mix helps against emerging macro risks, dividend grows
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The final 2021 figures of Frequentis AG (ISIN ATFREQUENT09, General Standard, FQT GY) have slightly exceeded the preliminary key data. Both turnover (€333.5 million; +11%) and order intake (€333.2 million; +5.9%) showed significant increases in 2021, while the order backlog reached a new record high of €467.9 million. EBIT improved to €29 million (2020: €26.8 million). Against the backdrop of the macro risks now looming (Ukraine conflict, inflation, inverted US interest rate curve), Frequentis is in a comparatively comfortable position with its customer structure dominated by the public sector - because investments in this area are not subject to the typical economic fluctuations, the military air traffic control portfolio could even benefit from the latest development. The dividend increase by 33% to € 0.20 per share for 2021 underlines this in our view. With an EV/sales and a P/E ratio 2022 of 0.94 and 23.11 respectively (peer group 1.62 and 25.62), the Frequentis share is still not too expensive.
Our DCF analysis yields a per share value of €31.30 and the peer group analysis on the basis of 2022, 2023 and 2024 returns an average value per share of €37.11. With equal weighting of both approaches, the fair value per Frequentis share is €34.21. Our fair value is thus 15.6% above the current share price and leads to our investment recommendation "Buy".
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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