Original-Research: UBM Development AG (von NuWays AG): Buy

Classification of NuWays AG to UBM Development AG

Company Name:	UBM Development AG
ISIN:	AT0000815402
Reason for the research:	Update
Recommendation:	Buy
from:	17.10.2024
Target price:	EUR 27.00
Target price on sight of:	12 months
Last rating change:
Analyst:	Philipp Sennewald

Good exchange result for new green bond

Topic: UBM recently announced the planned issue of a further green bond with a volume of up to € 100m (possible increase to € 150m) with a five-year term and an annual coupon of 7%. Until 15 October, the company provided an exchange offer to the holders of the UBM Bond 2019-2025 (2.175% coupon / € 120m) and the UBM Bond 2021-2026 (3.125% coupon / € 150m). In detail:

Yesterday, UBM announced the results of the exchange offer for the new green bond, as a nominal amount of € 73.6m, representing c. 25% of the holders of both the ’19-'25 and ’21-’26 bonds, was exchanged. In our view, this clearly underpins investors’ trust in the company’s prospects going forward. The re-offer price was set at 100% of the nominal amount.

In addition to the exchange offer, new investors will be able to subscribe to the new green bond in the period from 16 October to 22 October in the way of a private placement. While we expect the company to reach the targeted € 100m, we do not yet include this in our estimates and wait for the end of the offer period. The planned value date is 29 October.

Overall, the issuance will further strengthen UBM’s solid financial position with an equity ratio of > 30%, an LTV of 46% and liquid funds of € 180m as of H1. Moreover, UBM has no relevant maturities until the ’19-'25 bond (c. € 90m remaining nominal) expires in November ’25e.

Management intends to use the net issue proceeds for refinancing as well as the financing of new or existing suitable green projects, which are in accordance with the company’s Green Finance Framework. Mind you, that UBM is one of the leading developers of timber-hybrid construction in Europe with currently more than 300k sqm in the pipeline (total pipeline: € 1.9bn pro rate over 4 years), including the tallest timber-hybrid tower in the world, the Timber Marina Tower. Given the cost advantages in connection with the modular and serial construction as well as the significantly reduced carbon emissions, we expect UBM’s projects to meet brisk demand once the market fully reopens, as investors are under pressure to comply with the EU taxonomy.

Reiterate BUY with an unchanged € 27 PT based on DCF.

You can download the research here: http://www.more-ir.de/d/31071.pdf
For additional information visit our website: www.nuways-ag.com/research

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse.
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