Report
Wim Lewi

Dynamic Top Pick List - January 2022

Today we confirmed our 2022 Dynamic Top Pick List :
We maintained the same selection as last December. However some stocks have moved significantly and we adapted the comments in the report.
• We KEEP Large Caps: AB Inbev, Ageas, Ahold Delhaize, ArgenX, bpost, CFE, D'Ieteren, Telenet, UCB and Umicore.
• We KEEP Mid Caps: Care Property Invest, Fugro, Intervest Offices and Warehouses, Kinepolis, Materialise, Ontex, Sipef and X-fab.

Performance: Since our previous update (2/12/21) our DTPL rose 3.9%. That was again strong month, it beat the AEX by 3.5% (Technology) and Bel20 by 0.8%. For the year we keep an average 2.7% outperformance. The worst performer by a long shot was Umicore (-19.7%) due to a profit warning. The best performers by far were CFE (+29.1%) on the back of the split announcement and Kinepolis (+17.0%) on the lock-down relaxation.

Our view: For 2022, we have constructed our DTPL list around certain themes that we believe will outperform over the next 12-13 months. Below, we discuss those and select some stocks as examples :

• Reopening : At the moment the lock-downs are hurting certain stocks. We dare to increase this exposure as we believe the waves will show lower amplitudes (Post-Omicron) as science and knowledge builds. Kinepolis is a prime benefactor from a re-opening and it is also protected by its real-estate position. AB Inbev is another example as the events calendar fills up.

• Defensive : FED will gradually start to taper the money flow that propelled markets to a long list of new records, while challenges for our economy remain (Inflation, Covid and Climate). Ahold-Delhaize, Care Prop, GBL, UCB.

• Take-Out/Valuation : Last year has seen some bold take-out manoeuvres by large private equity funds that prey on undervalued assets. Also some stocks disappeared as their large shareholders preferred a private holding. We still believe in Ontex (GBL 20%), Telenet (Liberty 57%), Intervest O&W (FPIM 10%), Ageas (European bank, China), bpost (Consolidation) and EVS.

• Sustainability : Over FY22 we expect sustainability to maintain an important theme. The market is struggling with new reporting standards, comparability and the ESG impact on financials. We believe that companies that invest in the transition to a better society will be rewarded. CFE (Wind) and Umicore (Recycling, Mobility) are companies that tick some boxes.

• Growth at Reasonable Price : We still believe that some companies can grow faster than the market, but we avoid paying too much premium. ArgenX, D’Ieteren, Materialise and X-fab are active in structural growth markets.

The specific reasons for the changes can be found in our DTPL document that will be published this morning on our website.
Underlyings
Ageas SA/NV

Ageas is an insurance company engaged in providing a range of life and non-life products distributed through a variety of channels. Co. focuses on helping its customers to mitigate risks related to property, casualty, life and pensions. Co. serves its customers through a combination of wholly owned subsidiaries, equity associates and partnerships, with financial institutions and distributors in Belgium, the U.K., Luxembourg, Italy, Portugal, Turkey, France, China, Malaysia, India, Thailand and Hong Kong. Co. is organized into five operating segments: Belgium, U.K., Continental Europe, Asia, and General Account.

Anheuser-Busch InBev N.V. ADS

ArGEN-X SE

Argenx N.V. is a clinical-stage biotechnology company developing a deep pipeline of differentiated antibody-based therapies for the treatment of severe autoimmune diseases and cancer. Utilizing its suite of differentiated technologies, Co. is focused on developing product candidates with the potential to be either first-in-class against novel targets or best-in-class against known, but complex, targets in order to treat diseases with a significant unmet medical need.

Bpost SA

Bpost is engaged in the provision of national and international mail and parcels services comprising the collection, transport, sorting and distribution of addressed and non-addressed mail, printed documents, newspapers and parcels. In addition, through its subsidiaries and business units, Co. sells a range of other products and services, including postal, parcels, banking and financial products, express delivery services, document management and related activities. Co. operates through two business units: the Mail & Retail Solutions and the Parcels & International.

Care Property Invest SA

Care Property Invest NV. Care Property Invest NV, formerly Serviceflats Invest NV, is a Belgium-based real estate investment company that builds and finances housing for pensioners. The Company specializes in premises equipped with technologies ensuring safety and comfort of elderly people. In addition, Care Property Invest designs, builds, supervises the progress of a number of construction works, monitors the budget and finances projects in the long term. Care Property Invest NV cooperates mainly for public health care center in Antwerp -Openbaar Centrum voor Maatschappelijk Welziijn (OCMW), including Berchem. The Company focuses its activities on the Belgian market. It operates through a number of subsidiaries, such as Ter Bleuk NV, Siger SA and Konli BVBA and VSP Wolvertem bvba.

Compagnie d'Entreprises CFE SA

CFE is engaged in civil engineering, buildings and industrial construction, dredging works and electrical installations. Co. is also engaged in property development, environmental protection and building management. Co.'s works carried on by Co.'s civil engineering group includes the following: hydraulic engineering, harbor works, bridges, and other engineering works, tunnels, road construction, dams, storage tanks, piping and drainage and caissons sunken soft soil. Co.'s buildings and industrial construction sector is active in the following fields: administrative buildings, industrial construction, public utility buildings, redevelopment, and residential buildings.

D'Ieteren SA

D'Ieteren is engaged in two sectors of services to the motorist: Automobile Distribution, which is a distributor of Volkswagen, Audi, Seat, Skoda, Bentley, Lamborghini, Bugatti, Porsche, and Yamaha brands in Belgium; and Vehicle Glass, which is engaged in the repair and replacement of vehicle glass mainly in Europe, North and South America, Australia and New Zealand through Belron s.a. and notably its CARGLASS®, AUTOGLASS® and SAFELITE® AUTO GLASS brands.

EVS Broadcast Equipment SA

EVS Broadcasting Equipment is engaged in the development and marketing of audiovisual equipment relating to the processing of pictures and sound. Co. provides solutions based on tapeless workflows with a consistent modular architecture. Co.'s activities are divided into the following regions: Asia-Pacific, Europe, Middle East and Africa, and America.

Fugro NV Cert of Shs

Fugro collects and interprets data related to the earth's surface, soils, and rocks beneath. Co. provides advice to oil and gas, mining, and construction industries. Co. provides the people, equipment and technology that support the exploration, development, production and transportation of the world's natural resources. Co. also provides its clients with the technical data and information required to design, construct and maintain structures and infrastructure in a safe, reliable and efficient manner. Co. operates in three divisions: Geotechnical, Survey, and Geoscience.

Groupe Bruxelles Lambert SA

Groupe Bruxelles Lambert is a holding company. Through its subsidiaries, Co. operates through the following segments: Imerys, which consists of the Imerys group that operates in four business lines of energy solutions and specialties, filtration and performance additives, ceramic materials, and high resistance minerals; and Financial Pillar, which includes, on the one hand, under investment activities, the companies Sienna Capital, Ergon Capital Partners (ECP), ECP II, ECP III, PAI Europe III, Sagard, Sagard II and Sagard III, Kartesia and Merieux Participations I and II and, on the other hand, under consolidated operating activities, the operating subsidiaries of ECP III.

Intervest Offices & Warehouses SA

Intervest Offices & Warehouses is a Belgian property investment fund. Co. specializes in investments in office buildings and semi-industrial properties situated on locations outside municipal centres. Co.'s business properties are located on the Antwerp-Brussels axis. Its activities can be divided into two business segments: Offices segment which includes the properties that are let to companies for professional purposes as office space; and Semi-industrial buildings segment which includes those premises with a logistical function, storage facilities and high-tech buildings. At Dec 31 2010, Co.'s portfolio consists of 69% in offices buildings and 31% in semi-industrial buildings.

Kinepolis Group NV

Kinepolis Group NV is a Belgium-based company, which is primarily engaged in the operation of cinemas. The Company's activities are divided into such business units, as Box office, In-theatre sales, Business-to-business (B2B), Film distribution and Real Estate. The Box office unit includes sale of the tickets. The In-theatre sales unit is involved in the sale of snacks and related articles. The B2B unit takes care of the organization of corporate events and the sale of screen advertizing to corporate customers. The Film distribution unit includes all activities related to movies showed in the cinema. The Real Estate is responsible for the property management and utilization. Additionally, the Company has a Technical department, which delivers technological support to Kinepolis facilities. The Company is present in Belgium, France, Spain and Poland.

Materialise ADS

Ontex Group N.V.

Ontex Group NV is a Belgium-based company, which operates in the manufacturing sector of industry. The Company is a producer of disposable personal hygiene solutions for babies, women and adults. It offers a range of such products as baby diapers, baby pants, baby wet wipes, pads, pantyliners, tampons, light incontinence products, pull-ups, belt diapers, all-in-one tape systems, shaped pads and underpards. Its products are distributed through retail partner brands, as well as under its own brands (canbebe, canped, Helen Harper, Moltex, Baby Charm) across several distribution channels, such as retail trade, care institutions and pharmacies. The Company is present in Europe, Northern Africa, Australia and Asia.

SIPEF group

Sipef is a holding company. Through its subsidiaries and associated companies, Co. is primarily engaged in the development and production of sundry commodities, including palm oil, palm kernels, tea, tropical fruits and flowers, bananas, pineapples, ornamental plants, guava, pepper and natural rubber. Palm oil, which is Co.'s most important commodity, is used within the cosmetics industry, in soaps and detergents, as a supplement to cattle and poultry feed, for production of protein, and for several other purposes. In addition, Co. provides management, marketing and consultancy services in the agro-industry.

Telenet Group Holding NV

Telenet Group Holding is a holding company. Through its subsdiairies and its broadband network, Co. is engaged in the provision of cable television, including television services, broadband internet and telephony services to residential subscribers in Flanders and certain communes in Brussels as well as broadband internet, data and voice services in the business market throughout Belgium and parts of Luxembourg. In addition, Co. is engaged in the provision of mobile telephony services through a mobile virtual network operator partnership with Mobistar NV.

UCB S.A.

UCB is a global biopharmaceutical company focused on severe diseases in two therapeutic areas, namely central nervous system disorders and immunology. In the area of central nervous system disorders, Co. is focused on advanced Parkinson's disease, epilepsy, restless legs syndrome and epilepsy. In the area of immunology disorders, Co. is focused on rheumatoid arthritis, axial spondyloarthritis, psoriatic arthritis, systemic lupus erythematosus, juvenile idiopathic arthritis, post-menopausal osteoporosis, systemic lupus erythematosus and immunological diseases.

Umicore

Umicore is global player in the materials technology and recycling industries. Co. focuses on application areas such as chemistry, materials science, metallurgy and recycling. Co.'s business model comprises four segments: Catalysis, Performance Materials, Energy Materials and Recycling. Catalysis focuses on the abatement of global automotive emissions; Performance Materials focuses on materials that help develop more sophisticated and safer products; Energy Materials produces materials used in the production and storage of clean energy including rechargeable batteries and photovoltaics; and Recycling treats complex waste streams containing precious and other non-ferrous metals.

X Fab Silicon Foundries SE

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Analysts
Wim Lewi

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