Taaleri - Good outlook for 2018

Taaleri’s H1 results exceeded our estimates following higher than expected investment income and performance fees in in Wealth Management, while Financing saw lower profits following weaker investment income. The outlook for 2018E looks promising following the H1 results. We retain our BUY-rating with a target price of EUR 11.4 (11.0)

Wealth Management drives profits

Taaleri’s operating profit in H1 amounted to EUR 12.4m. Wealth Management’s operating profit was EUR 14.1m, driven by performance fees and investment income of EUR 5.6m and EUR 4.9m respectively. Performance fees were higher than anticipated, as the mutual funds continued to contribute significantly despite a weaker first half of the year in comparison to the previous year. Financing’s operating profit was below previous year levels, at EUR 2.4m compared to EUR 7.9m in H1/17. The operating profit was affected by investment income, with return on investment at fair value of -0.1%, as high-yield bonds saw a shaky first half of the year. Energy’s operating profit remained negative as expected, at EUR -0.9m, due to ramp up of the business. A new product launch remains likely in H2/18.

Good 2018E outlook following solid Q2 results

We have revised our full-year estimates upwards following the good H1 results. While our H2 estimates remain mostly without significant changes we have adjusted downward our estimates for Financing to reflect an expected lower investment income also in H2. AUM growth was stronger than expected, despite stagnating PE funds development due to slower commitment calls, and we expect to see AUM growth in PE funds during H2. Our 2018E sales and EBIT estimates are EUR 73.2m and EUR 23.1m respectively.

BUY with a target price of EUR 11.4 (11.0)

Following our revised estimates and a stronger than previously expected result in 2018E we adjust our target price to EUR 11.4 (11.0) and retain our BUY-rating.

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