Solid Growth with "Safety“
Frequentis AG (ISIN ATFREQUENT09, General Standard, FQT GY) is a global leader in “control center solutions” with applications in the fields of air traffic management, public safety and public transport. The safety-critical target markets, whose solid growth rates are in the mid-single-digit percentage range, show very high market entry barriers (relevant, long-term existing reference customers). Frequentis has shown above-average growth rates in the target markets over a period of more than 30 years; the growth path was only temporarily interrupted by two extreme events (9/11 and the financial crisis in 2008). The company has always been profitable. The financial year 2018 closed with a total operating performance of €293.9 mln (+7% compared to the previous year), EBIT rose disproportionately to €15.6 mln (+9%). After a successful IPO with a net cash inflow of €20.2 million, the company has a high net liquidity which can be used for acquisition purposes.
We see the fair value - calculated from DCF and peer valuation - at €24.79 per share (excluding inorganic growth impulses) and rate the share as “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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