Revenue Acceleration to be expected in Q4
On November 1, MAX 21 AG reported its 9M figures and elaborated on the operational outcome in a conference call the following day. The company reported €4.58 mln. in consolidated revenues on group level.
For the first nine months, MAX 21’s subsidiary KeyIdentity GmbH (formerly LSE Leading Security Experts GmbH) recorded revenues of €1.15 mln which is already above FY 2015 level. Group management expects accelerated Q4 growth in this segment, mainly because payment of three new major clients including BSI (Bundesamt für Sicherheit in der Informationstechnik) and insurance company Ergo came into effect mid- to late October. Further, KeyIdentity has entered negotiations with two additional major German corporations.
Revenues of the subsidiary Binect GmbH (formerly pawisda systems GmbH) grew by 22% QoQ to €1.04 mln. Compared to KeyIdentity, Binect is lagging behind expectations with 9M revenues of about €3.0 mln which is well below FY 2015 level of €5.1 mln.
For enhancement of working capital, MAX 21 AG has entered into a factoring agreement for a total amount of €2.5 mln. which will ease the financing of top line growth. In light of this release of liquidity the capital increase we had previously anticipated in our most recent basic report update of September 5 has now become obsolete. We have adjusted the respective positions in our financial statement projections.
In order to further expand expertise internally the company has appointed an advisory board of three experienced professionals which have held leading positions in IT security companies. According to management this will not entail any additional substantial costs.
We expect the substantial restructuring measures of the past nine months to translate into Q4 figures and to entail fueled growth in 2017. We leave our forecasts and DCF valuation unaltered and restate the fair value of €2.44 per share. Based on the current price we 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.
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