Binect reached break-even, KeyIdentity to catch up
On April 25, MAX 21 AG (ISIN DE000A0D88T9, Basic Board, MA1 GY) published its annual report 2017 results and held a conference call the following day.
As previously guided, Binect has reached b/e on EBITDA level at the end of the year on a monthly basis and management is confident that this achievement is sustainable. The business model consists of two tracks: a click charge per letter model (E-POST BUSINESS BOX) and the processing of mails completely on its own profit and cost account. The latter is now being reported as “strategic sales”. To drive this strategy forward, the product pipeline has been extended to address smaller and larger companies more flexibly. While the processed mail volume increased significantly by 22% to 97,2 Mio. sales grew by just under 2%. This reflects the still dominating revenue from click charges and overlays the strong growth in strategic high-margin sales at more than five-fold – albeit on a yet low level.
KeyIdentity (KI) still has the break-even ahead of it. It became obvious that acquisition of large customers is tedious due to their long decision paths and hence hardly predictable; however, with Thyssen Krupp, KI has gained the first DAX-listed multi-national concern for the implementation of its multi-factor authentification technology. The focus has now been extended to larger midsize companies with deal volumes between €30 and €50 ths. p.a. In light of this new strategy, management guides b/e in 2019.
For both companies, the Key Performance Indicators “Customer Lifetime Value” and “Monthly Recurring Revenues” are improving. Major growth drivers for both businesses are the digitalization trend and the increasing IT security awareness.
Based on the annual report, we have adjusted our forecasts and updated our DCF and peer group valuation. We calculate a fair value of €1.98 per share and rate the stock as “Buy”.
Max 21 AG, formerly MAX21 Management und Beteiligungen AG, is a Germany-based technology holding that specializes in the areas of information security and digital communications. Among others, the Company holds interests in Binect GmbH and KeyIdentity GmbH. Binect GmbH is a provider of encrypted communication, and develops software that allows or collect and coordinate e-mails from various platforms. In cooperation with Deutsche Post AG, Binect GmbH offers a hybrid business communication and postal distribution solution, including printing, enveloping, franking and delivery. KeyIdentity GmbH provides digital access and identity security solutions. It is a supplier of the LinOTP Product Suite, which is used in adaptive multi-factor authentication.
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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