Sales and incoming orders increase by around 10%, stronger strategic focus on software
Note regarding MiFID II: This research report has been prepared by order of the issuer based on a contractual agreement and is being compensated for by the issuer. The research report has simultaneously been made publicly available to all interested persons. Hence, the receipt of this research report is to be regarded as a permitted insignificant non-monetary benefit according to § 64 para 7 sentence 2 No. 1 and 2 of the German Securities Trading Act (WpHG).In the first half of 2024, Frequentis AG (ISIN ATFREQUENT09, General Standard, FQT GY) increased its revenue by 10.4% (to € 206.2 million), order intake rose by 9.6% and the order backlog exceeded € 600 million for the first time. Due to the typical project seasonality - with a weak H1 and a strong H2 - H1 EBIT was € -2.8 million (H1 23: € -0.3 million). As 55-60% of annual revenues are generated in the second half of the year, while the cost blocks are essentially evenly distributed, H2 is significantly higher-margin. Accordingly, we believe Frequentis is on track to achieve its own EBIT margin target (around 6%). Frequentis is barely dependent on economic developments, but is currently feeling the inflationary pressure (e.g. via the wage settlements). With a EV/Sales2024 of 0.84, we consider the share to be rather favourably valued.
Our DCF analysis suggests a value per share of € 33,39 and the peer group analysis based on 2023, 2024 and 2025 yields an average value per share of € 33,44. Equally weighting both approaches returns a fair value per Frequentis share of € 33.41. Our fair value thus exceeds the current share price by 15.6% and entails a "Buy" rating based on our valuation scheme.
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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