Annual General Meeting Reports ABO Wind and Tick TS

As you know, I usually take notes at shareholder meetings. Since I had more opportunities than usual this year thanks to the Corona containment – virtually it is easier for me to participate than if I have to drive 500 km – today there are even two transcripts of AGMs in August. It’s about Tick TS (post here) and ABO Wind (I had only mentioned as a buy so far but had not written a deep analysis).

As always, I warn that a live transcript will inevitably be flawed and incomplete, and I’m happy if I can capture 80% of the most important information.

ABO Wind

The annual general meeting for ABO Wind was held on 8/20. The report of the board is (commendably!) available as a video on the company’s site:

In addition, ABO Wind has published the speech and the answers to selected questions on its website – praise must be given here, not many companies go to such lengths to make the contents of the AGM (which, after all, takes place during normal working hours) available to all shareholders. However, as not everything is listed in the questions, here is my transcript:

Question answer ABO Wind

– Auditor in the light of the Wirecard scandal
◦ Total fee 196T €
◦ Final audit of individual financial statements and Abo Spain, Greece and Hungary, Tax consulting at ABO Wind AG and support ABO Wind Spain operational audit
◦ Support in drafting contracts
◦ Review of GTCs
◦ Extension to further companies planned
◦ Restriction to audit only is rejected
– Corona impact, expected insolvencies end of year
◦ Fortunately little affected, but partly deliveries, court cases, … but so far well under control
◦ also see support programs as positively balancing
◦ pay attention to partners and suppliers as solid as possible but cannot exclude individual cases
– country risks (Argentina and South Africa)
◦ some colleagues from Argentina moved to Europe, running costs reduced, situation not clear
◦ in South Africa short term tender is expected, has several projects with short construction times and therefore good chances
– report solar projects as segment?
◦ Not obligated by commercial law, see no clear advantages but expense, therefore not
◦ Current status: 2019 17 million revenues from solar (14%), in new projects already every third project, will probably further increase solar share
– Problems of European manufacturers
◦ No involvement of manufacturers in project development (rather sales of these activities e.g. Nordex to RWE)
– International competitiveness (e.g.
◦ work with international market leaders, hardly any Chinese turbines in EU
◦ open to technology, may also consider Chinese manufacturers
◦ Western manufacturers have higher confidence, also with banks, and possibly also better financing conditions
◦ in solar they rely mainly on market leaders from China
◦ have done well with this so far
– prospects of repowering
◦ mainly Germany, only wind
◦ own team, have three projects that come into question, share of new projects at one third with increasing T
negative prices on the electricity exchange
◦ only short-term effect, may already deter investors or influence pricing
◦ see sales prices still high due to trend of falling expected returns
– Guarantees
◦ Group guarantees against suppliers at € 103,2 million, sufficient scope,
◦ additional guarantee line of 15 million are bank guarantees, total of € 165.2 million guarantee lines with banks and insurance companies, increased by a further 8 million
– liquidity
◦ available € 30 million, first-grade liquidity at 35%
– capital increases – is 51% of founders a potential brake on growth?
◦ See necessity to make further capital increase in the medium term
◦ Potential for now still for 800T new shares
– Solution of intertwining with Abo Invest – is this complete?
◦ Takes over management if Abo Invest orders it, Abo Invest has no own qualified employees, is also usual in the industry
◦ with other projects that one has developed, one also takes over management
◦ sees no reason not to do business with Abo Invest
◦ (comment from me: the question was quite detailed and aimed at conflicts of interest, I found it not fully answered)
– When was it decided to reduce the Abo Invest stake
◦ on April 14, sales via Hamburg, Düsseldorf and Munich from April 16 to 27. May
– Dividend and capital increase at the same time – does that make sense, do you need the liquidity to be able to pay dividends at all?
◦ Capital increase finances further growth, think that fits well together
– Abo Wind wanted to sell park in GR to Abo Invest which has rejected – what is the current status, is the price higher or lower?
◦ there are several interested parties
◦ Abo Invest was not offered a fixed price, can not compare with now achieved price possible
◦ Is now other investment object and therefore also not comparable (commissioning occurred / imminent) , Good bank financing obtained
– Breakdown of work in progress item
◦ D 24 m
◦ FR 19
◦ IR 15
◦ GR 12
◦ FI 9
◦ AR 5
◦ UK 5
◦ ZA 3
◦ ESP 2
◦ sontige 4

◦ Wind 77 million, solar 21 million, biogas 1
◦ Maturity: (?) unfortunately I was not able to note
– Write-offs on unrealizable projects
◦ exclusively wind projects, also in the first HY
– Margins on projects after sale of rights
◦ very dependent on region, type of project etc
◦ very adequate, especially in view of the reduced risk
– Risks and capital requirements of expansion
◦ Capital measures aimed at up to 50 percent of main owners
◦ Risks broadly spread
◦ individual markets have higher risk, take care that exposure does not become too high
– Listing in m:access – should higher segment be chosen, especially if you want to tap the capital market again?
Regulated market makes IFRS necessary, this is a high volume and expense, which is not seen as justified for uncertain effect on the share price
– Wind energy Germany
◦ Politics has not yet managed to resolve the congestion
◦ see strongere Involvement of local residents (current draft bill) positive
◦ Conflicts with species protection waiting for solution
– how many permits expected in D 2020
◦ up to 39 MW wind from two projects, that would be 77 MW in total
– Senvion insolvency – how is the replanning / adjustment of projects going?
◦ already done except for one French project which is already sold
▪ D 11 projects, FR 6 projects
– FR projects with right to old tariff
◦ 120 MW in tariff 2017 , here gibts about 70 € per MWh
◦ expect ready to build until 2023
◦ in PV expect permits up to 150 MW with which to participate in tenders, 200 MW would have to be done differently
– Spain also projects to completion?
◦ Turnkey build remains strategy, have also already hired more staff
– Solar – larger areas and PPA?
◦ Potential in all countries (except Finland and Ireland), already looking at what makes sense
– Any concerns about renewable being stalled in post-Corona build-out?
◦ See partly lobby groups in favor, but on the whole tend to support further, more positive
– new developments in storage market?
◦ Working on storage project in Northern Ireland
◦ Battery costs dropping sharply
– Why lots of hiring in certain areas but not project development?
◦ Service and operations management has grown a lot, solar is new addition , offer more and more complex services
◦ Commercial people work closely with developers, Support with that also in planning
◦ Expand technical teams
◦ Often more studies needed in planning
– Where is country risk devaluation accounted for
◦ Work in progress item
◦ Arg 2,3
◦ Ireland 1 mn
◦ Northern Ireland 0.4 mn
◦ GUV position increase finished/unfinished goods
– How much loans to unconsolidated investments
◦ 2018 2.8 mn
◦ 2019 2.3 mn
◦ 30.6. 2,2 Mio
◦ no loans to foreign companies
– Abo Invest shares
◦ Beginning of 19: 2.617T at book value of 3.277 Mio€
◦ End of 2019 1. Book value 1.472 million
◦ End of half year none more
◦ Gain on sale 2019 >500 K
◦ first half year 798T
◦ are in other operating income
– Why disproportionate increases in other expenses
◦ higher MA number
◦ more travel (international business)
◦ insurance premiums
◦ IT costs

◦ most important items:
◦ space costs 2.3
◦ advertising and travel 2.1
◦ vehicle 1.8
◦ sales tax 1.6
◦ loss of receivables 1.5
◦ IT 1.5 million

My impression: I would have liked to see more detailed information in some places, but overall the company is on a very good track. Country diversification has succeeded in many cases (France, Finland, Greece, Spain for example seem to be strong) while others like Scotland, Netherlands or Tanzania are/were more difficult. Due to the increasing pressure to finally slow down climate change, coupled with the ever decreasing costs (even in less sunny Germany, solar power can be produced below 5 cents per KWh, i.e. subsidy-free generag is now starting to make sense in some places). ABO Wind also said at the AGM that battery prices are falling so much that battery storage will be economically interesting pretty soon – and storage is one of the critical points in the further expansion of renewable energy generation. Therefore, there is a strong tailwind for the business. The share price has now risen to €27 (it was €15 when I bought it a year ago), and competitors such as Energiekontor and PNE are also climbing steeply. The announced acceleration of procedures for wind turbines in the German market, which has collapsed sharply, could also revive the domestic market, even though the government led by the CDU/CSU has so far been conspicuous by quietly blocking any climate protection and is lagging far behind its own targets.
I feel very comfortable with the investment in the long term, and believe that the tailwind for the industry will strengthen as prices continue to fall.

Tick TS

Tick TS’s annual general meeting was held on 8/25. It was interesting in that it was the first of the new boss Mr. Schölzki. I have partially supplemented with the transcript of another investor, I hope it is informative:

Report of the board of directors

  • Company has 20 employees and 1 trainee
  • different products:
    • TBMX front end
    • Whitelabel App
    • Pretrade Risk System
    • TBMX Market Making
  • Three customers as examples:
    • HSBC, large bank with own connections / memberships to many exchanges
    • Lang & Schwarz, hybrid client with own exchange connections and memberships and broker connections all over the world
    • Sino, no exchange membership, forwards clients’ orders to other brokers
  • Sales grew 10%, EBIT 22%, net profit increased to € 1.655 million, dividend increased by 24
  • 80% sales recurring, stable revenue base
  • Number of employees remained the same
  • Climate neutrality further company goal, footprint measured and 2000€ donated for compensation payment
  • Half-year: earnings minimally increased, EBIT almost identical, 21 employees and 78% equity ratio
  • Impact Corona: high vola on the stock markets, could be managed well from home office, could hire additional staff, project postponements
  • Forecast 1,6 to 1,9 Mio€, very close to new record high or even much more if it goes well
  • Availability of systems was 99.9928% while others had significant problems
  • Presentation Carsten Schölzki:
    • Since the beginning of the year board of directors

    • in Berlin information science, journalism, psychology, consultant, environment software and finance

    • managing director of a gmbh with software for german middle class, then paypal, then figo as CTO

    • important: responsible and honest handling of resources and employees

    • tick ts is special: clear size, but long established, and still potential for growth; that’s a special combination;

    • Coming from the outside, one discovers opportunities for improvement

    • Steering evolution instead of making revolution

    • 3 factors: satisfied employees, satisfied customers, satisfied Shareholder

    • Stability, agility, sustainability are values

    • Could care about quality and stability of software when projects were postponed because of Corona

Presence 42%, 32 shareholders Online

question answer

According to the annual report, €29T was spent on parking spaces, does this refer only to Berliner Allee, or other parking spaces?

  • Rented parking spaces in Moll parking garage, at the beginning for every employee, now limited to necessary and now at 21,000

Unfortunately, there was again no remuneration report of the Management Board in the annual report, although this has already been requested once


  • Not required in over-the-counter market

Wirecard has once again shed light on the PRoblematik of the auditor – since when do you work with DHPG as auditor?

  • since 30.9.2010, no mandatory rotation
  • Responsible auditor changed in internal rotation 2018.

Why expand the Supervisory Board to 4 members,…

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Painful Truths Reloaded – Mr-Market markets, stock market, trading, economy

A special feature of the Mr. Market approach is that I do not discuss the basics and principles of trading on the markets in a purely theoretical way, but always *live*, so to speak, in the living, dynamic situation.

So I not only comment daily on the market events in the “Hari Live Stream”, but I also use the events again and again to convey or explain basic principles and techniques. So I am constantly moving from the concrete to the general and back again. Because I am convinced that this is the best method to convey real, internalized knowledge, not through theoretical treatises, which then do not “sit” at all.

Again and again, there are special movements of the market, where this can be seen particularly well. And in contrast to those who always know everything exactly afterwards, the members can experience every day what I have said *before* and how it then develops.

The big Covid crash in March was of course such a welcome case and was an excellent template for each of us for our own experience and insight. But there were also opportunities later, the big rally after the positive news on the Biontech/Pfizer vaccine in the fall of 2020 for example, or just most recently the bottoming out of the fall correction, which started to rally from Oct. 14, which we expected and recognized immediately.

So here are four stock market wisdoms, linked to experiences of the last years. The 4th stock market wisdom is my own, also -> here in the interview with the “Traders Magazine” topic.

Let this really get to you and honestly examine your own behavior. You will see how much concrete truth there is in the wisdom.

Never catch a falling knife

Never catch a falling knife. Some of you do it again and again because something that falls quickly feels “cheap” – misguided by a delusion of security and the belief that you can get through anything.

For example, do they remember cases such as Shell (RDS) in the Covid crash? The temptation to buy quite early in the first phase was great, being “value” and all, and now 20% cheaper.

But the “dividend pearl” Shell has then fallen about 70% since the highs, somewhat simplified from 30 to 10€ thirds and no matter how you wanted to talk yourself pretty at the time, it was unnecessary to be there, because that was a clearly visible, falling knife. The fact that the share has subsequently come up again does not make this mistake any better, especially since the share is still lagging behind other shares and there are countless better investments.

But of course it goes much better, I say only Wirecard and in the following link you can read in excerpts what I have written in the premium area to the members in advance, tenor “Finger weg!”:

-> Wirecard and us in the mirror

I have marked the dates mentioned therein 07.02.2019 and 29.04.20 with my comments in the now following chart. On 29.04.20 I said among other things to the KPMG “audit report”:

This is the absurd result that should wash Wirecard clean. I am sorry, there remains after all these years probably only to note that the Wirecard management must be an amateur player troupe, or the accusations are probably justified. In between fPersonally, I can’t think of anything else to say.

Or in other, more drastic words: I can take the piss myself, I don’t need Braun for that.

Before, I was not interested in the share, but had no opinion on the accusations. Now the management has lost its credibility with me *completely*.

It continues to be mainly the classic, small retail investor who is interested in Wirecard and writes his fingers to the bone in forums, even though his “opinion” of what is going on at Wirecard is completely irrelevant and without substance.

So never again reach into a falling knife, no matter how “cheap” the stock looks! Never again imagine to be “smarter” than the market, just because something has fallen strongly!

It is sufficient to be interested in a stock when it comes back to life or at least shows relative strength, which took Shell more than a year and was never the case with Wirecard.

This can then still be too early and be followed by another downward phase, but it is at least rationally okay to trade relative strength. Falling knives, on the other hand, are not.

And if you still adhere to this mistaken belief that you can just sit everything out in the stock markets, then you should be aware of the following wisdom from John Maynard Keynes:

The market can be irrational longer than it can be liquid!

Risk happens fast

Risk happens fast. Which is why there can be no hesitation if we want to avoid the big drops. We don’t have to guess them beforehand, that’s nonsense anyway, but we can recognize them quickly when they happen.

If panic, panic first, is another variant of this wisdom. How helpful that was in the Covid Crash cannot be overstated.

The chart is from spring 2020, plotted are the points to which I drove the community to the sidelines to avoid the big pain. They were quick *reactions* and not guessing into the blue:

On the safe side here were those who cut off or hedged crystal clear and hard according to their rules. All others who hesitated and thought about it and only started to think about it at 20%, how they can secure themselves now, have suffered heavy and unnecessary pain.

And of course, if you take this to heart in the future, you will get out a few times and then in retrospect it will turn out to be unnecessary, because the prices will turn around again right away. Then you can’t hesitate and have to get right back in and then you have “missed” a few percent at the most. This is the “insurance fee” you have to be willing to pay to avoid something like here or a Lehman 2008. I claim: it is still worth it.

The trend is your friend

Just as it is right and necessary to take cover in extraordinary crises, it is also right to follow a trend for as long as it lasts and not to be driven crazy by the daily fuss.

To follow the trend means to follow the principles of trend following, i.e. to watch out for higher lows and higher highs again and again. Trends also have corrections, but they have to follow the sequence of higher lows versus higher highs.ber be subordinate.

I can show this beautifully on the long-term chart of Thermo Fisher Scientific (TMO), a share that I characterized in the free area -> here in April 2015 as follows:

In contrast, the situation is quite different for the companies that primarily earn from the tools, tools, test procedures and methods with which the biotech companies conduct research and run their business.

Quite analogous to the manufacturers of shovels in the gold rush of the 19th century, these companies earn regardless of whether gold is actually found. And even a drug with side effects or research that is not approved by the American FDA cannot affect the manufacturers of the shovels.

My absolute favorite as far as this is concerned, and for me *the* blue chip in this sector, is Thermo Fisher Scientific (857209, TMO) with a very broad, promising product portfolio.

So if you haven’t already, do yourself a favor and get involved with Thermo Fisher Scientific’s products sometime. For me, this is a clear case for my investment portfolio – and not just since today, as loyal readers know.

And here the trend in logarithmic representation, it can hardly be more beautiful and there was never a reason to become particularly nervous:

But this conceals how immense the effect was in the portfolio, this is what the linear representation shows, this is what happened in the portfolio, just because you did trend following.

And no, this is not the Covid incidence, this is a “boring” investment value, if you pay attention to the right things like consistent growth and do not look for “cheap pearls” to satisfy your ego.

So: The trend is our friend – until it ends.

The truth is in the square

The big misunderstanding that many investors have and that is also persuaded by the financial industry is the misconception that stock market success has something to do with -> Prognosiritis, that you have to know today what the market will do tomorrow.

That is nonsense, one does not know anyway. But what you can do is to observe the present so exactly and unbiased that you can recognize situations in which chances and risks are bent in your own favor and not just 50/50.

If one has enough experience to recognize such situations, one will become continuously successful, even if in individual cases still something can come in between. It’s like the bank in roulette, the statistics do it, it’s also called the “edge”.

That this is really possible and that you have to keep an eye on the real game on the court is something I show the members again and again in the streams.

So last at the low of the correction this fall, which I had characterized from the beginning as “buyable”. On 10/12 I clearly wrote that a massive move was now coming soon. When it came on 10/14-21, I clearly called for entry – you can read all this in detail when you join us.

Here is the chart for it, the market had already given us the message with its marked bottom, you just had to read the “memo” because you take the game on the field seriously:

Whoever hesitated here made a mistake, exactly

brigens as above turned around with the risk. When the market rings – and it did on 10/14/21 – you should be awake and *react*, not guess, ponder, hesitate, swagger and cleverly ramble on.

Yours Michael Schulte (Hari)

*** Please note the -> Legal Notice <- when using the contents of this post ! ***


Michael Schulte (Hari)

*** Please note when using the contents of this post the -> Legal Notice <- ! ***

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“Pure New Energy”: PNE achieves record figures in 2021

Clean Energy Solutions provider PNE shines with strong figures. The annual report for 2021 shows: PNE has exceeded its own guidance of EUR 24 to 32 million with EBITDA of EUR 32.7 million (previous year: 26.3 million). EBIT amounts to EUR 9.3 million (previous year: 8.2 million) and basic earnings per share to EUR 0.33 (previous year: 0.02). Total output was also significantly expanded in 2021 to EUR 252.0 million (previous year: EUR 151.7 million).

Great progress was made in project development, despite some delays as a result of the Corona pandemic. In fiscal year 2021, the PNE Group completed, sold or started construction on wind farm and photovoltaic projects with around 1,076.1 MW/MWp (in the previous year only wind energy: 461.2 MW). This figure was thus more than double that of the previous year and a new record in the company’s history.

And a look into 2022 makes us even more confident, as 2021 was a comparatively weak wind year. At the same time, PNE massively expanded its own portfolio, while electricity prices skyrocketed to new record levels. Volume x price = profit, that is the magic formula that should provide a strong tailwind in 2022 and beyond. Both in terms of business and share price.

Compared to its direct competitors Energiekontor or ABO Wind, the share price has developed rather modestly, despite the recent strong increase. Looking at the valuation, PNE nevertheless appears more expensive than the peer group. On the one hand, this is due to historical reasons, on the other hand, a look below the surface reveals a somewhat different picture.

Pure New EnergyPNE

has had some tough times, some name changes and strategy shifts and fundamental changes in the shareholder structure. But for some years now, the company has come to rest and is focusing on its entrepreneurial activities alone with great success. And the name says it all: Pure New Energy.

The PNE Group offers the entire value chain of development, project planning, realization, financing, operation, sales and repowering of onshore wind farms in Germany and abroad. At sea, wind farms are developed until they are ready for construction. PNE is one of the most experienced players in the market.

In 2016, PNE had its back to the wall financially. The then Board of Management had wind farm projects planned and built properly, but it sold only a small part of them. The majority was “collected” in order to sell them in a package to large investors. The idea behind this was that individual projects bring in money, but only ever attract small investors. On the other hand, a bundled portfolio of the appropriate size called “YieldCo” was supposed to be interesting for globally active investors and thus able to achieve a higher price.

This strategy was doubted by many. It was previously untried and put an enormous strain on PNE’s balance sheet. This was because the costs hit the income statement and the balance sheet in full, while the sales revenues and the profits generated with them were on the back burner. The degree of indebtedness thus continued to rise, while the liquidity situation became steadily tighter. And equity was also under pressure due to the lack of profits. As a result, the share price fell, which made possible refinancing via

capital increases became less attractive.

YieldCo” followed by “Windparkportfolio2020”

In November 2016, the breakthrough was achieved and Allianz Global Investors was found as the “whale” to buy the YieldCo portfolio. The strategy had worked and provided relief. The high revenues allowed liabilities to be reduced and equity to be strengthened. Above all, the PNE Group was once again in a much more solid financial position, which helped with the new project.

And the Board of Management wanted to repeat the success and launched a second “Wind farm portfolio2020” with an even larger volume. And the share price started to fall again after its previous leap of joy, as many shareholders were put off by the prospect of a second “YieldCo adventure”. But the board put all its eggs in this basket.

For two years, the share price fluctuated between EUR 2 and 3 and during this time, the “Windparkportfolio2020” was built up. PNE made an effort, based on previous experience, to highlight the value of this portfolio in its figures so that investors could more easily see the progress and growth in the value of the company. However, the message did not sink in. In a direct comparison of key figures with competitors, PNE was regularly seen as much more expensive and slipped through the cracks with many investors and also with the media. Until today.

Morgan Stanley Infrastructure PartnersIt



when the “Windparkportfolio2020” was put on display in mid-2019 and PNE began active marketing. However, as early as August, PNE was confronted with interest from Morgan Stanley Infrastructure Partners, not for the wind farm portfolio alone, but for the entire company. The PNE Board of Management was positive about the plan and so a delisting offer at EUR 4 per share was made in October 2019.

However, MSIP’s plan did not work out. The price of EUR 4 was not attractive enough and “end game professionals” quickly bought into the stock, so MSIP ended up with less than 40% of the shares. As the share price stands today at over 10 EUR, MSIP missed a great opportunity.

MSIP has since acted calmly and like a “normal” strategic major shareholder. Above all, MSIP stopped the planned sale of the “Windparkportfolio2020” and had this asset completely rebooked to its own portfolio. Since then, PNE has had such an own portfolio and is continuing to expand it. In the meantime, around half of the projects are sold in order to realize profits, and the other half are transferred to the company’s own portfolio. Here, the one-time sales profits are then omitted, but the sale of the electricity production feeds the P&L for the next 20 years.

But a few weeks ago, rumors surfaced that MSIP was now looking to divest its stake in PNE. As the company collects investor money and invests it in different closed-end funds for a limited period of time, this is not an unusual occurrence. MSIP needs to cash out in order to pay its investors. And this creates opportunities for all other investors.

Higher valuation justified?!

After all, the world has changed considerably in the last two years. Huge sums of money are flowing into the green energy sector, governments around the world are launching subsidy programs, and investors are rushing into ESG-compliant The value of the company’s own portfolio in particular is constantly increasing, and the same applies to the project pipeline. Prospective buyers are therefore putting much more money on the table than two years ago. Accordingly, PNE is also worth much more. In a comparison with recently realized prices for company takeovers in the sector, PNE shares would be valued at well over EUR 15.

Shareholder structure

If an acquirer takes over the MSIP share, he would also have to submit a corresponding purchase offer to the outstanding shareholders. In order to prevent this from leading to a squeeze-out, Active Ownership has increased its stake in PNE to 11.99%, making it the second largest shareholder after MSIP with its 39.8%. ENKRAFT holds about 3.13% of the shares, Dimensional Holdings Inc. about 3.10% and GS&P about 3.02% of the shares. All other shares are attributed to free float.

Business areas

Potential buyers include financial investors, large energy multinationals such as Shell or RWE and, of course, competitors such as Energiekontor, ABO Wind or Pacifico Renewables from Alexander Samwer, who has, after all, formulated big plans with his company.

But what does a buyer actually get for his money? PNE projects wind and solar plants, primarily through its subsidiary WKN. But PNE has been strategically positioning itself more broadly for the past two years and is developing into a “Clean Energy Solutions Provider”, i.e. a provider of solutions for clean energy from the various renewable energies.

In the future, the strategic orientation of the PNE Group will include not only wind energy but also photovoltaics as well as storage solutions and power-to-gas technologies with a focus on hydrogen.

Currently, the PNE Group is active in 13 countries and on 4 continents, mainly in Europe, South Africa and North America. This broad and flexible positioning makes PNE more independent of fluctuations in individual markets and business areas and therefore the gradual expansion of activities to further technologies and markets is also planned. In this context, the focus is, among other things, on emerging markets with a strong increase in demand for energy.

In view of the sharp rise in electricity prices, the value of an in-house portfolio is becoming apparent. The electricity could be sold either via the EEG levy awarded in the tendering process, or directly on the electricity exchange. The third way is a so-called Power Purchase Agreement, where the electricity is purchased from a single buyer for a certain period of time. More and more companies are taking this route, partly because it reduces their own carbon footprint.

Such PPAs are usually only concluded for one or two years and, thanks to the currently very high electricity prices, there is significant price increase potential lurking here for the electricity producers if the PPAs are renegotiated now. Each new, higher PPA also increases the value of the entire company.

Hidden reserves due to build-up of wind farm portfolio

The results have been significantly influenced by the build-up of the company’s own wind farm portfolio. This has created “hidden reserves” that are not immediately apparent. Due to the investments in own projects, a total of EUR 134.6 million, of which EUR 53.0 million in fiscal year 2021 (previous year: EUR 50.0 million), in pre-tax profits are expected at Group level by the end of 2021.n have been “eliminated”.

In other words, if the projects had been sold instead of being held in the company’s own portfolio, pre-tax sales profits of EUR 134.6 million would have been realized to date. The current market capitalization of PNE is EUR 785 million.

And since these “hidden reserves” are not included in the income statement, PNE also always reports relatively modest net profits and thus low earnings per share. Compared with its competitors, PNE thus looks comparatively expensive – until you take a closer look at the figures and consider all the factors.

My assessment


PNE is benefiting from the GreenEnergy megatrend and the global and increasing efforts to achieve climate targets and decarbonize the energy supply world.

The Urkaine war has once again massively increased the urgency to quickly and consistently move away from gas and oil as energy sources and especially from Russia as an energy supplier. The approval procedures are lengthy and an acceleration would be helpful. So far, however, the German government has only paid lip service to the issue, with little in the way of concrete action. But perhaps something will happen after all. Until then, the strong increase in demand with hardly any increase in supply will primarily generate strong price increases.

The project developers are currently being hampered by the lengthening delivery times, e.g. for rotors and turbines, and of course the high prices are also a burden.

The accelerated development and expansion of the company’s own portfolio creates value, but reduces the profit generated in the short term. And since 2021 was a year with little wind, earnings from electricity production are also lower than average. However, this may change again in 2022; in any case, January and February were record-breaking for wind, while March disappointed. Overall, however, Q1 2022 was very strong and also very lucrative thanks to high electricity prices.

PNE benefits in the long term and should Habeck’s efforts to accelerate projects succeed, then more quickly. Values could be lifted even faster at PNE if the rumors about the departure of major shareholder MSIP should prove true. For in the event of a takeover, hardly less than EUR 20 will be called for, as MSIP will already be pushing to achieve the best possible return for its investors. In addition, ActiveOwnership is a minority shareholder with a stake of over 10%, which is unlikely to be fobbed off too cheaply. The takeover price should then be the new reference price for PNE and subsequently a kind of safety net for the share price.

The comparatively high valuation remains a weak point, but there are reasons for this and it should not be the only reason for investors not to invest in PNE. The risk-reward ratio is positive and the share is an attractive addition to a portfolio. Buy, leave, reap…


: I have ABO Wind, Energiekontor, PNE on my watch list and/or in my portfolio/wiki.

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Broker Pools Part 3: JDC Group

This post is part of a mini-series on broker pools, you can find the first part (market overview) here, as a second part I took a close look at Netfonds here (and bought some shares).

The JDC Group (Jung, DMS & Cie) essentially acts as a broker pool and liability umbrella. In addition, the company itself also operates financial products to end customers through its subsidiary FiNUM – this area still generated almost €30 of the €111 million in sales in 2019. In addition, the platform belongs to JDC.

JDC’s story goes something like this: They consolidate the already pressured market for financial and insurance sales, scale with the platform and eventually make good profits. Ideally, at some point a large proportion of insurance contracts will run through this platform and you can take a small piece of every commission – ultimately what Hypoport has done in the construction financing business. Great-West Lifeco has been a major shareholder since last year. JDC has repeatedly been able to report good news with the acquisition of larger corporate clients, such as Boehringer’s in-house broker, comdirect, or Lufthansa’s in-house broker subsidiary, Albatros. Essentially, the internally developed app for the personal management of insurance policies is used as a white-label solution adapted to the respective customer. In return, JDC, as the broker pool, receives the contracts and a corresponding share of the commissions.
Incidentally, JDC’s focus is more on insurance; of the acquisition commissions in 2019, €57 million were from the sale of insurance policies and only €18 million from the investment and tangible assets area:


The JDC Group was once called Aragon and went public back in 2005 – at that time at an issue price of €8.50 and an initial price of even more than €10 per share. Before the financial crisis, the share price rose to 30€ and fell in the wake of the financial crisis and ongoing margin pressure / losses to below 2€ in 2015. In 2012, an end to the failed “buy-and-build” strategy and a focus on the core business was announced, subsequently several investments were sold to shrink back to health. Then in 2015, the company was now renamed JDC and a fresh start was made after the restructuring. Since then JDC has invested a lot of money e.g. in the purchase of contract portfolios = portfolio commissions. At the peak of the crypto token boom, the company even did its own ICO (later nothing has been heard of it – was it worth it?).


Source: So

what are the numbers (growth, balance sheet, profits), and do they support the story told by JDC?

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Income Statement 31.12.15 31.12.16 31.12.17 31.12.18 31.12.19
Total Revenues 75,59 77,66 84,21 94,48 110,97
Salaries And Other Employee Benefits (12,14) (11,19) (14,44) (16,53) (17,42)
Operating income (1,10) (1,17) (1,12) (3,48) (1,86)
EBT Incl. Unusual Items (1,00) (0,77) (0,89) (3,10) (1,81)
Net Income</td >(1,73) (1,21 68 4,27 81
Weighted Average Diluted Shares Outstanding 10,85 11,39 11,93 12,43 13,1
Goodwill 24,56 24,56 24,56 25,83 27,12
Other intangibles 6,69 20,53 19,2 20,91 22,8
Total assets 65,8 72,92 75,16 86,21 102,3
Long-term debt 12,69 13,16 17,35 14,92 19,21
Total equity 24,68 29,71 28,03 33,41 30,48
Tangible book value (6,57) (15,38) (15,73) (13,33) (19,44)
Total debt 12,69 13,26 17,48 18,27 33,95


Sales have thus increased very nicely from €75 to €111 million, i.e. just under 50%. That corresponds to about 10% growth per year – not a purebred growth company, but still quite respectable overall. What else do we see? The number of shares has increased by 20%, so part of the growth was obviously financed by capital increases. I don’t like that so much… Furthermore, the financial debt has also increased considerably. But above all: If you deduct goodwill and intangible assets, you would get a negative equity of almost 20 Mio€! It is also striking that in none of the last 5 years profits could be generated (which explains the capital requirement).

Until a few years ago, I would have surely called it quits at this point – an unprofitable company, in a market where others are quite profitable (see last post on market overview) and with a pretty weak balance sheet


Well, in the meantime I have learned that it can make sense to invest massively first in order to reap massive rewards later. This is especially true for digital platforms, and JDC sells itself as such a platform. Let’s remember what Hypoport’s figures looked like when I invested back then (2015)


Business year 2009 2010 2011 2012 2013 2014 [Q1 ’15]
Sales € million 50,5 66,9 84,4 87,8 98,1 112,3 [33,3]
Profit € million -0,3 3,3 3,7 -0,8 3,1 5,9 [3]

Financials of Hypoport at the time of my investment

The revenue development was quite similar to JDC’s now, but the profitability was already somewhat higher at that time. In particular, however, you could see that profits kept fluctuating and slipping into negative territory, and it wasn’t until 2014/15 that you slowly started to see the scaling. In the meantime, the stock is one of the biggest success stories on the German stock exchanges and profits have risen rapidly. So if JDC can realistically repeat such a story one should not write it off too quickly.

So what questions do we need to answer to know if JDC could still be an interesting investment?

Well, first and foremost we need to find out w

s market position, how well the business is scaling and whether there are other profit drivers. In addition, JDC is investing a lot, so we have to see if and to what extent these investments pay off.

Market position

JDC is the third largest German broker pool by revenue, behind Fonds Finanz and almost equal to Netfonds. The growth is in a similar range as the big competitors, the profitability rather below (but this is justified by the investments in the platform). In terms of normal business, the company is probably solid, but not exceptionally well positioned.

However, there has been a recent trend towards more and more key account business – mostly banks or corporate brokers, who can then use JDC’s platform as a whitelabel product for their customers. Here, there has recently been a noticeable increase in customer acquisition, this still young area probably already contributes 20% to sales.

  • Nov 2017: Albatros (Lufthansa’s brokerage subsidiary for employees) is acquired, is expected to generate up to 20 million in revenue per year over 5 years, 150,000 customers.
  • March 2019: Contract with Sparda Bank Baden-Württemberg (started in June).
  • August 2019: contract with Bavaria Wirtschaftsagentur (BMW)
  • Oct 2019: 5-year contract with comdirect
  • Nov 2019: 5-year contract with VW Bank (contracts with 100,000 customers)
  • April 2020: contracts with subsidiaries of Nürnberger Versicherung and Boehringer Ingelheim
  • July 2020: contract with Sparkasse Bremen
  • According to the company, there is still a good pipeline and further contracts can be expected.

If you look at this list, you can quickly see the potential: The brokerage companies of banks and corporations are not large enough to be able to profitably digitize their business themselves. Since there are still many of these, there is great potential for growth. At the same time, JDC seems to be ahead of the competition in this area. It is not clear how much a contract with Comdirect as one of the largest online banks will bring (this also depends on how well the bank can advertise and sell insurance contracts), but it is clear that even comdirect, which is actually well positioned, does not see any (economic) opportunity to simply do digital insurance sales itself. In the wholesale business, other qualities are required, such as real automation, but also high data protection requirements and good completeness. You also don’t hear much from competitors when it comes to acquiring large customers, so I assume that JDC has a significant advantage here and can continue to grow significantly in the future.

However, I also have to state that I can’t see any great organic growth outside of the key account business at the moment. According to the press release on the Albatros deal, it was supposed to bring “up to €20 million a year” in revenue. The deal was implemented from 2018 and, according to the annual report, 2019 was the first full year of revenue contributions from Albatros. There were also other effects, notably the purchases of the private customer business of Assekuranz Herrmann for €2.8 million and the KOMM Invest investment pool for €3.6 million, plus the Sparda cooperation went live in 2019. Sales increased from 2017 to 2019 from 84

to €111 million, a total increase of €27 million. If we assume a slightly lower than forecast “up to €20 million” revenue for Albatros, say €18 million, for KOMM Invest (according to the 2019 AR) €5 million and for Assekuranz Herrmann €4 million (here the revenue was not mentioned but €1 million EBITDA per year was forecast)

, then that would already be €27 million revenue from these sources alone. In other words: the rest is stagnating or maybe even shrinking. Unfortunately, the exact figures cannot be determined, but it seems to me that one hundred percent of the growth comes from acquisitions and the key account business. My understanding is that the revenue and profit from Assekuranz Herrmann should have been incorporated into the Advisory segment. However, this segment actually saw a decline in revenue from 2017 to 2018, so if my suspicions are correct this would not be a particularly good sign of strength in small-scale end-customer business either.


How well does JDC scale and how can you tell? Costs should increase slower than revenues, so that you can create economies of scale as you grow in size. Ideally, personnel and operating costs in particular should remain the same or increase only minimally. Is this the case? For this purpose, we look at personnel costs, and we do this on a quarterly basis in order to also identify more recent trends. Personnel costs should at least not show any major structural fluctuations, but should be reasonably stable


31.12.15 31.3.16 30.6.16 30.9.16 31.12.16 31.3.17 30.6.17 30.9.17 31.12.17 31.3.18 30.6.18 30.9.18 31.12.18 31.3.19 30.6.19 30.9.19 31.12.19 31.3.20 30.6.20
Sales 20,03 17,38 18,96 18,39 23,2 19,81 20,42 19,1 24,98 22,39 21,83 21,81 28,44 26,73 25,64 26,89 31,65 31,29 27,28
Personnel costs (3,25) (3,11) (3,22) (3,21) (1,65) (3,40) (3,56) (3,62) (3,86) (3,86) (3,77) (4,17) (4,74) (4,24) (4,13) (4,54) (4,51) (4,50) (4,44)
Personnel cost ratio 16,23 % 17,89 % 16,98 % 17,46 % 7,11 % 17,16 % 17,43 % 18,95 % 15,45 % 17,24 % 17,27 % 19,12 % 16,67 % 15,86 % 16,11 % 16,88 % 14,25 % 14,38 % 16,28 %

Quarterly personnel costs and revenues at JDC. Source:

Personnel costs have actually not increased in the last three quarters, and the personnel cost ratio has fallen from over 17% in 2017/2018 to more like 15% in the meantime. So there does seem to be scaling here, especially since the personnel costs do indeed include the costs for the growing “Advisory” division, from which I do not expect any significant economies of scale.


As already mentioned, JDC often takes over portfolios from insurance companies. Brokers are paid for the management of the portfolios.

commissions on inventory, but there is still a certain amount of management effort. This means that you can always buy up stock and bring it onto your own platform – and in theory not only get your money back, but even make follow-up business. If you can do this task more efficiently than others with a digital platform, then there should be good profits in it. When inventory is purchased, the cost of it is capitalized into intangibles as “customer base.” Then the costs are amortized. This explains, for example, why EBITDA may well be rising steadily, even if profits are not. Incidentally, the amortization of insurance contracts is between 10 and 15 years, which is roughly in the range that can be assumed for the term of the contracts.

However, not only portfolios are bought up, but also smaller brokers and broker pools when the opportunities are good. This seems to be quite possible at favorable conditions, in the acquisition of the private customer division of the Assekuranz Herrmann wrote JDC:

“These are contracts with historically long holding periods that promise a return on investment after run-off costs of over 25 percent per year.
This will improve our EBITDA by about one million euros p.a.” Ralph Konrad, CFO of JDC Group AG is pleased. “Since we had already taken over the settlement of the contracts concerned three years ago, the additional income will flow to us from January without any significant start-up expenses or additional costs.”

The purchase price here was just €2.8 million , if you can get a profit of €1 million from this this is extremely favorable.

In addition, digitization costs money, of course. JDC says it capitalizes investments for software development where it can; they are also included in intangible assets and have increased from €0.9 million to €1.3 million since 2015. (Of course, the true investments in IT can also be significantly higher than the capitalized ones and usually will be).

The following table shows the development of intangible assets over the last years:

Year Intangible assets Amortization of intangible assets Investments in intangible assets Cash outflows for investments in acquisitions Proceeds from sale of intangible assets Proceeds from sale of companies
2014 31661 1392 937 0 335 3497
2015 31248 1373 960 0 0 1961
2016 45090 2346 4795 10482 0 0
2017 43761 2782 1812 0 0 0
2018 46736 2874 2491 2153 1 0
2019 49924 3126 1720 2865 0 0

A major leap was made here in particular by the takeover of the portal in 2016, to which a major purchase of contracts was added. In the last two years, the two smaller companies mentioned above were also acquired.


ou can’t tell from just looking at the figures how successful the investments really are and how much return they have brought. If you believe JDC, they are…

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Omicron – How expectations make the courses – Mr-Market markets, stock exchange, trading, economy

I have explained here again and again how -> expectations determine prices and not the news itself, the news is only the catalyst that changes expectations.

Therefore, days like today’s Friday are particularly nice, where the new Covid variant B.1.1.529 (Omicron) not only determines the news, but also the market. Because on these days you can observe the effect of expectations exemplarily and that’s what I want to do briefly with them today.

There were sharp drops crosswise on today’s Friday and the well-known Covid logic was played on the market, the classic “stay-at-home” stocks were bought just as sharply as the medical profiteers in the field of laboratory diagnostics, some in double digits in the process. And everything that would suffer directly from flight bans and new lockdowns was sold just as sharply in double digits, such as tourism companies or engine builders for aviation. At -> Twitter today, I showed MTU Aero Engines (MTX) and Eurofins Scientific (ERF) as two of these.

First of all, you can ask an interesting question there, namely why the DAX did not fall so sharply already on Thursday? Look, the upper arrow was Thursday and the lower one today’s Friday:

And now they hold on. -> I posted this tweet of the well-known epidemiologist Eric Feigl-Ding on Thursday at 11 o’clock in our forum and we discussed this as a reason for concern. So the thing was already known on Thursday!

The reason why there was the reaction in the DAX only on Friday is quite simple, on the Wallstreet was on Thursday “Thanksgiving” and stock exchange holiday, the Wallstreet was closed. Just look at the low volume in the DAX on Thursday, then they know how that looks when the US traders are missing.

I have said it many times, many European indices like the DAX are at best the tail that wags the dog, with no real life of their own. Asia and Wallstreet give the direction and they were right from zero o’clock at night in the futures then sharply downward on Friday.

Who seriously comments the stock exchange happening only from the point of view of the DAX, should therefore rather times “grow up”, because that is as if one comments with a soccer play only the happening at the corner flag!

But that only incidentally, because it is so eye-catching, it should be here about the expectations.

And there we have now a potential Covid variant, which if it goes very badly, in the worst case practically acts like a new virus, if it should be able to bypass the antibodies by vaccination or recovery. Or, in the best case, it cannot prevail against Delta and is also less lethal and therefore does not pose a major threat. There are now worlds between the worst case and the best case, and the possible range of stock market activity is now correspondingly wide.

But we don’t know that today and we probably won’t know for at least days, maybe even a few weeks. According to Biontech, it will take about 2 weeks for them to assess how well the existing vaccines are still working. 2 weeks for everyone to worry and merrily ponder, the market included.

So now the market has to rank what’s new, and immediately there’s a glaring difference from February 2020 to admire. As it happens habe I them 2 weeks ago in -> Painful Truths Reloaded also a chart of this phase shown, here it is again:

Back in mid-February 2020 the pandemic was already running, there were already the horrible pictures from Wuhan of people lying in the streets. And the market had shrugged its shoulders for a long time, which then justified my “dissonance” and ensured that we were well prepared when it started.

The market shrugged its shoulders for a long time because it had no template for what would happen now. At times, people still believed that the virus could be contained in China, a naïve notion from today’s perspective, and Omicron will not remain in South Africa either; it has already arrived in Belgium, Israel and elsewhere.

However, the market did not have a template at that time and therefore could not bundle its expectations. That’s one of the reasons why there was this hesitation for a long time, until things started to go downhill with a vengeance.

Today, on the other hand, the market simply pulls the expectations out of the drawer, which it has now learned with Covid in the spring of 2020. And that’s why we reliably saw the typical reactions today.

It’s simply the expectations that move the prices. Today the market has clear expectations, at the end of January 2020 it didn’t have them. So simply the difference arises and I wanted to show them today for the occasion!

What this means now is another question, it is clear that the prices now fluctuate with the risk until there is (hopefully) all-clear, because the vaccinations still work well enough.

If however not, then there is clearly more delivery risk here, that depends now however on the virus and the new realizations. Do not think, however, in any case that this is now guaranteed to be a straight case as in March 2020, it will rather not, uncertain fluctuation is more likely. The only thing that is certain now is increased volatility until there is clarity here, whenever that will be.

So from here, there is a risk that the fears come true, then it goes significantly lower. And there’s a good chance that Omicron won’t be eaten as hot as it’s cooked, then this dip represents a clear opportunity at the end of the year. Ultimately, we have to accept that we don’t know today and any determination would just be pointless guesswork.

What is clear, however, is that the market is now treating this according to the logic of the Covid experience, so a divergent course it may overlook for longer than necessary, as it did in the spring of 2020.

It will be exciting to see when the market then also reacts to the positive side of the equation, after today it was mainly looking at the virus – perhaps already next week. Because before that, in the last few days, inflation fears have determined market events and precisely these inflation data would quickly fall again if, for example, the oil price were to fall permanently again due to new travel restrictions. Today oil has collapsed because of that already from pure anticipation.

So I don’t think we need to worry about the economy suffering a new round of the virus *and* high energy prices, it’s more likely to be one of the two and that has a positive aspect too, just as market action is always multi-dimensional and never two-dimensional-causal.

So it is always expectations that move prices. The news act nu

r indirectly by changing these expectations. A news that was already expected, therefore, can no longer move the market, a surprising news, on the other hand, very much.

To Covid the market has now clear expectations and exactly after the pattern it tries now to treat the danger of B.1.1.529. The more we know about the variant, the more precise the reactions will be.

Yours Michael Schulte (Hari)

*** Please note the -> Legal Notice <- when using the contents of this post ! ***

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Kissig’s Stock Report: Interest rate joy drives Deutsche Bank and Commerzbank. Really now?

As part of my cooperation with Armin Brack’s“Aktien Report“, I take a look at interesting companies at irregular intervals. The issues of the “Aktien Report” and/or “Geld Anlage Report” reach their readers on Saturdays free of charge and “hot off the press” in the email inbox and one can subscribe ▶ here to the “Geld Anlage Report”. Bonus for the readers of my blog: a few days later I may publish the analyses here as well.

Stock Report No. 74 from 04.02.2022

Interest rate joy drives Deutsche Bank and Commerzbank. Really now?

It’s really happening: central banks are going to raise interest rates! They last tried to do so in 2018 and then had to abandon the attempt again after the stock markets had taken a sharp dive.

In the spring of 2022, the situation is somewhat different. The central banks have not only pushed interest rates into negative territory, but have also virtually flooded the economy and the markets with money. All for the good purpose of avoiding a financial shortfall in the economy during the Corona pandemic, which led to bank and corporate failures around the world during the financial crisis, at the latest after the Lehman bankruptcy. And from which European government budgets in particular, as well as bank balance sheets, are still suffering today. Quite different from their U.S. counterparts.

The Bank of England has already made two interest rate hikes, and Fed Chairman Jerome Powell has recently been “hawkish” about an economic situation in which higher interest rates are expected. This is based on the assumption that an increase in inflation has a negative impact on the economy. A proponent of hawkish policy is interested in higher interest rates to mitigate the negative effects of inflation). As a result, some market observers are already talking about seven rate hikes in 2022 instead of three, and hedge fund manager Bill Ackman

even proclaims that he believes in a strong opener, a shock, with a 0.5% rate hike instead of the expected 0.25%.

And even the ECB, which has always been at pains to calmly declare that there will be no interest rate hikes in the eurozone in 2022, now sounds less convinced. At least Christine Lagarde has no longer ruled out rising interest rates in 2022.

Inflation! Inflation? Inflation!

The main reason for interest rate speculation is the inflation rate. It has shot up well above the desired rate of 2% and has stuck there energetically. Initially, it looked like it would only be a temporary nuisance, but this temporary phase has now lasted for many months. Almost a year. The strong recovery after the Corona collapse is one reason, the global supply chain disruptions and lack of transportation capacity another. This results in sharp price increases for the missing materials, and in the second half of 2021, the enormous increase in energy prices, especially in Europe, was added. Oil climbed to a seven-year high in recent days and is already sniffing the $100 mark.

All of this is driving inflation, and the central banks are – also – responsible for fighting inflation. That’s why there are increasing calls, including from within their ranks, to finally raise interest rates and reduce the supply of liquidity. The latter is happening b

he Fed’s bond purchases are about to expire. And as the bonds are repaid by the issuers, depending on their maturity, the Fed’s bond holdings are reduced over time, reducing its total assets. And that leaves less money available to the market.

But in addition to inflation, the Fed also looks at the performance of the U.S. labor market and the economy. And on the stock market. The stock market is much more important in the U.S. than in Europe, because Americans organize their pensions primarily through stock investments instead of the state pension systems that prevail in Europe.

Interest rate steps by the central bank usually only develop an effect in the real economy after 18 months. For the most part, the central bank runs behind developments. It only reacts when a development has long since gained momentum, and its measures then take effect much later. Its steering influence is therefore rather overestimated (by the central bank itself and by politicians).

Are interest rates really rising?

The mere thought that the central bank could turn the interest rate screw produces an effect. The markets rise or fall, as the case may be. That’s what happened this time, too, as bond yields shot up sharply in recent weeks. On the other hand, they have already calmed down again, which tends to signal composure on the part of the market. And not the expectation that the Fed will “hit” harder and more often than previously assumed. And perhaps it will even have to dare to do the roll backwards after only a short time.

After all, the economy buckled toward the end of the year. In the USA, the labor market is still pretty much empty, and in Europe there is a lack of jobs. Youth unemployment remains very high, especially in the southern countries.

Inflation is a particular burden on the poor and those with low incomes. For them, price increases for everyday necessities represent real losses in quality of life. The stimulus checks from the U.S. government have been used up, and now they have to pay high heating costs and, in some cases, significant increases in food prices. This puts a strain on consumer spending, and the U.S. economy is particularly dependent on private consumption.

Furthermore, there have been signs of relief in the area of supply bottlenecks for some weeks now. More ships are being handled at the container terminals again, and production of missing parts is gradually being ramped up. And the high energy prices are also likely to fall again soon – all factors that should slow down inflation. This will reduce the pressure on central banks to raise interest rates.

It is therefore quite possible that the first one or two interest rate hikes will not be followed by any more.

This would be positive for the stock market, as it would make interest-bearing securities with meager interest rates of less than 2% hardly a real investment alternative. And the growth companies, which have recently come under heavy pressure, could also breathe a sigh of relief, because without further increases in interest rates their future profits would not be further devalued and their current discounted valuations would thus be given “room to maneuver” again.


Banks are also mostly equity stocks, but for them, interest rates affect them on a completely different level. This is because they issue loans, and interest rates here arein an enormous leverage. Whether Deutsche Bank receives 1% or 2% for a loan of 100,000 euros has a significant impact on its interest income.

Banks not only lend out their own money and the money they receive from savers, but also obtain additional borrowed capital on the interbank market, from central banks or by issuing bonds and notes. The higher the interest rate level, the higher their own interest expenses. And yet this is not a zero-sum game for the banks. They earn money from the interest margin, and that has been steadily shrinking over the years. This is one reason why banks are trying to find new sources of revenue. The reintroduction of account management fees is just one of their measures.

Only recently have interest margins started to widen again, and with interest rates rising, this trend is likely to continue for some time. Perhaps the banks will even manage to return to their historical interest margin of 2%.


banks German banks have always been very credit-heavy by international standards. This means that a large part of their business consists of installment loans, car financing and, above all, real estate loans. U.S. banks have a much greater focus on capital market business, which is more volatile but also much more lucrative.

Accordingly, changes in interest rates also have a much greater impact on business at German banks than at their US counterparts. This is even more true for the savings banks and cooperative banks than for the major German banks.

In a rough stock market year for technology stocks in 2021, the shares of Deutsche Bank and Commerzbank did very well and posted significant gains. This outperformance accelerated even further from the beginning of 2022.


The Commerzbank share price rose from 5 to 8 euros in 2021. Relative to the March 2020 corona low of 3 euros, the gain is even more impressive. However, the five-year high at the beginning of 2018 was also once just under 12 euros, and before the financial crisis of 2008/09, well over 200 euros were also paid for a Commerzbank share. At its peak in March 2000, the price was even just under 265 euros.

Commerzbank is a long way from that. Today, it consists of the merged banks Commerzbank and Dresdner Bank, but their once strong branch business, which was so enormously important as a distribution channel for financial products and represented a competitive advantage, has degenerated into a cost trap in the age of direct banks, fintechs and neobrokers, home banking and financial apps. The strong unions are not making the necessary structural change any easier either.

The largest shareholder in Commerzbank is the federal government. This is a result of government support measures from the financial crisis. The previous second-largest shareholder was the U.S. hedge fund Cerberus, and there had been speculation for some time that the Americans wanted to buy the federal government’s stake. But things turned out differently, as Cerberus reduced its stake in January and now holds less than 3% of CoBa shares. This resulted in a substantial loss. Cerberus committed itself to a standstill period of 45 days for the remaining stake. It is therefore quite possible that

ts will be announced at the beginning of March.

In view of the brightening prospects for the German credit market in particular, this move by Cerberus comes as something of a surprise. It is possible that the Americans do not trust the new hope for interest rates and the associated further price increases, or that they simply have other plans for their money.

Provisions for mBank

One of CoBa’s earlier hopes was its Polish subsidiary mBank. An attempt was then made to sell it a few years ago in order to reduce debt. But no buyer was found for the ambitious price.

In the meantime, mBank has become a problem child. Most recently, Commerzbank in Poland had to set aside the equivalent of another 436 million euros because of foreign currency loans. mBank had to set aside provisions with regard to loan agreements indexed to foreign currencies for the fourth quarter, and this also weighed on the Commerzbank Group’s fourth-quarter operating result. Commerzbank nevertheless expects a “positive consolidated result” for the 2021 financial year.

Constant burdens

The problems of mBank are only exemplary for the situation of Commerzbank. For many years, it has been in a state of constant upheaval, changing CEOs and strategies. The problems remain, however, because they stem primarily from the high branch density, the associated high personnel costs and the constant restructuring that entails severance payments, write-downs and one-time expenses.

It is obvious that there will have to be bank mergers in Europe, including cross-border ones. Germany has been very unwieldy in this respect so far. The three-pillar model of public savings banks, cooperative banks and private banks, which is unique in the world, is vehemently defended. The market share of the savings banks including Landesbanken, cooperative banks and banks with development or support functions in the total assets of the German banking sector was together just under 52% in July 2021. In other words, more than half of the German banking market is therefore not open to foreign investors per se. Unfortunately, it can therefore be assumed that the German banks will not be among the active consolidators, but will rather have to try to slip in somewhere at the end of the merger wave. By then, the route will have long since been set by others.

At the same time, Commerzbank in particular could well arouse the interest of foreign investors. With the shares held by the federal government, an interested party would quickly acquire a significant stake. But the federal government is still well in the red with its block of shares and would have to absorb a billion-euro write-down in the federal budget if it were to sell below the purchase price. And it would have to admit that it has once again failed as an investor, while in the U.S. the government aid has flowed back to the national budget with fat profits.

Deutsche Bank

Germany’s banking leader has very similar and also very different problems to Commerzbank. Under Alfred Herrhausen, who was later murdered, the bank ventured into investment banking. It bought up a number of brokers and asset managers, especially in the U.S., including Bankers Trust, which already had a rather tarnished reputation. Until the financial crisis, the investment banking made a lot of money, however, the fat bonuses for the U.S. German bankers and their colleagues in London caused great frustration in the German banking towers. The differences in pay were huge, thanks to the bonuses. At least when the stock markets were running. When the stock markets were down, everyone had to cut back together.

Under Swiss bank boss Josef Ackermann, the trend toward investment banking was exacerbated. Then came the colossal crash during the financial crisis, when it turned out that Deutsche Bank had many of the “toxic” securities in its…

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Sayonara Sawai, Sayonara Ateam | Price and Value Stock Blog

A few years ago (specifically 2017), when it became increasingly difficult to find classic value stocks among German second-line stocks, I chose Japan as a small investment focus and invested in a few stocks there. These were the two IT service providers Toho System Science and Minori Solutions (sold with 25% and 100% profit, respectively), the CAD software specialist Argo Graphics (sold in 2018 with almost 50% profit, since then still significantly increased…) as well as Sawai Pharmaceutical and Ateam. The latter were my highest weighted positions in the process, but in contrast to the others they were rather disappointing. I have now decided to check off this chapter for the time being, to learn from it and to reflect on the whole thing.

Sawai Pharmaceuticals

Sawai has more or less gone sideways since my purchase (at just under 6000 yen), while profits in America have been severely limited by competitive pressure (look at the prices of Mylan and Teva!) and in Japan by the constant “drug price revisions” of the government as a quasi-monopoly customer. Each year, more generics were brought to market and production volumes were increased (often with fewer employees), profits were definitely made and the valuation is still favorable. Here are the figures:

Revenues 123492 132428 168068 184341 182537 179345
Operating income 23186 20539 22293 25990 26793 24789
Net Income 17155 15914 14017 19376 19279 18313
Diluted EPS Excl Extra Items 465,25 431,39 360,26 442,32 440 417,92
Dividends Per Share 120 130 130 130 130 130


You can see nicely how revenues have increased initially (due to the acquisition in the US), but earnings per share still remain below its record level. If you adjust the profit for the amortization of the acquisition of the US business, Sawai trades at a very moderate P/E ratio of around 10-12.
I think it’s quite possible that the valuation will also jump significantly at some point, because actually Sawai is not a bad company, and definitely still cheap. The share price is 5100 yen, and the dividend yield of 3% is not bad at all. But I realized that so far I had underestimated the impact of the government’s price cap and expected a swing to a new growth path soon. However, if the Japanese government does not want to allow its companies to make more profit than necessary and can constantly enforce price cuts, then this is a considerable risk. To assess this better, I would probably need Japanese sources, which I don’t have. Therefore, I have left here.

Did I do something wrong?

I’m not sure – the valuation is still cheap, the stock has held up very well compared to, say, Teva or Mylan, and even its biggest domestic competitor Nichi-Iko has given up a third of its share price in the period. I got off lightly with my single-digit loss.

ommen. The fact that it is difficult to predict market dynamics makes investing difficult, and I foolishly invested here at the very moment when it was becoming increasingly difficult for generic manufacturers (after they had earned very well for a long time). Maybe I’ll look back in five years and selling now was the biggest mistake – I don’t know. (After all, it’s a stable, profitable company not particularly hit by Covid19).

Still, I see little reason to be sure that Sawai can steadily increase its profits over the long term and earn high returns on capital as long as the government keeps depressing prices so regularly and has found a good way to shift profits from the companies to society in the form of the health insurance companies. So I also see limited potential here, and probably harder for me to assess than I expected.


When I invested in Ateam in 2018 I thought “what could go wrong?”. The company actively and profitably growing in the promising online space (platforms and mobile games) got for a price-to-earnings ratio of about 12.

Presentation of the company’s performance at the time of my purchase

Ok, I was aware that the then larger part “mobile games” sells quite short-lived products from which you can make money for a time, but which will eventually expire and have to be replaced by new ones.
However, the second largest area, online platforms / comparison portals, was growing so strongly at the time that I assumed it should easily compensate for this. But the reality was: the existing games came under much more pressure than I had expected, the new games were not big hits, and the growth of the platforms slowed down. The numbers now:

quarterly revenue growth by segment (source Ateam IR)

So the games fell further and further behind, and contrary to my hopes, no new hits were produced. “Lifestyle Support” (online platforms), on the other hand, caught some of it, but also fell back slightly even before Corona. Some of the newly launched sites were discontinued again because they did not perform sufficiently well, other hopefuls like Qiita have good user growth but still have problems with monetization.

On the cost side, the development of new apps has apparently become significantly more expensive due to higher requirements, but it is not possible to generate ever higher revenues in the competitive environment. The new strategy here is to now develop not only for cell phones, but for all types of end devices. This is probably still more expensive, but has a better chance of bringing in the money (or decent profits) again due to the larger market.

The short-term outlook is mediocre: After the loss in the past Corona year, there should be slight growth and a black 0 again next year. Notable profits from new games can’t be expected for the year, if they don’t come the following year anyway. Corona has apparently hurt the wedding planning site quite a bit and that should continue for a bit longer,even the comparison sites for financial products have suffered. So in the short term there will probably be little progress, with remaining high but un

sure potential for later years. So I decided to exit with a painful loss of more than 50% and keep the company on the watchlist for that long. If hit games can be produced again (or at least “Lifestyle Support” finds its way back to nicely profitable growth) the stock is still strongly undervalued.

What was my mistake?

For one thing, I expected that at least moderately successful games would continue to be released, even though I knew that was a bet. Well, I lost that bet.
I also didn’t expect growth in “Lifestyle Support” to dissipate as quickly as it has – even before Corona, there was stagnation in most areas. Maybe I could have taken these two points as warning signs and got out earlier?
But probably my biggest mistake was to have chosen a high weighting in this rather risky investment due to the high proportion of games. With a new hit game, it probably would have been a big win – so it’s a big loss. And what is the number one rule of investing?

1.never lose money!

What’s the number


2.never forget rule number 1!

Well… remember Tobi, remember!

To summarize: Both are actually not bad companies, but due to a deterioration in external market conditions, growth has been curbed and valuations have not progressed accordingly. At least with Ateam, however, I see chances (and risks) that it will come back – though certainly not next year.

Tidying up

The two sales, however, have another background: At the time, I turned to Japan, as I hardly saw any attractive stocks left in Germany. In the meantime, the situation has improved somewhat: on the one hand, there are definitely stocks that I find attractive. On the other hand, I recognize more and more that higher valuations are acceptable for good, profitable companies and that I can also feel comfortable with such. To do that, however, I need to understand the company better and more deeply – and that, in turn, is comparatively easier with German small caps than with Japanese ones.

My private portfolio had grown to almost 20 positions (including Wizz Air and Sixt which I reduced to one share at the beginning of April in order not to expose myself to the Corona risks) – to follow them reasonably is then also increasingly difficult. Therefore I am happy when I can reduce it again a bit.


Where did I reinvest the money? I have Grenke bonds (in the short term also shares), bought some shares of Doccheck and of Lang&Schwarz and increased Tick TS a bit.On occasion I hope to be able to write more about it.

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The dual mandate and a schizoid stock market year – Mr-Market Markets, Stock Market, Trading, Economy

The stock market year 2021 is slowly coming to an end, but there is still a hurdle in our way with the FED meeting next Wednesday 15.12.21.

Because there the Fed decides on monetary policy, it is expected that it significantly reduces the stimulus (tapering) and perhaps even real interest rate increases for 2022 in prospect.

There are often misunderstandings about the Fed’s monetary policy, because anyone who has grown up in the tradition of the Bundesbank automatically associates monetary stability with the central banks’ mandate. This is still formally the case with the ECB, which was founded in the tradition of the Bundesbank but is now increasingly distancing itself from it and, with the support of politicians, is also subsuming political issues that are actually alien to monetary policy, such as climate change, into its tasks.

But the FED has since 1977, since the times of high inflation – which Paul Volcker later broke – a “dual mandate” for monetary stability *and* full employment!

A stable, good employment situation near full employment (which does not mean 0% unemployment) and thus a humming economy, is thus an equal goal of the FED beside the monetary value stability! That is an important difference to many other central banks which have primarily the money value as mandate!

The stock market has therefore always been an important factor for the FED over the last 20 years – even if it is not directly mentioned in the mandate, one simply cannot separate cyclical issues from it. The high dependence of many U.S. citizens’ pensions on their 401k stock savings plans adds to this. A prolonged bear market there means retirement poverty in many cases.

Which is why the FED has flinched every time things got really serious. And that’s been the case for more than 20 years, ever since Greenspan took the helm.

Most recently, the Fed has become more and more of an “auxiliary” to Wall Street, and that was possible because inflation was never a problem. If one factor of a dual mandate is not a problem, one can concentrate fully on the other factor, and that was the economy, which leads to full employment. And so the FED has simply “printed away” every bear market, such as Covid’s most recent one, with a flood of money.

So the FED has become the reliable “cavalry” of Wall Street. The last attempt to break away from this was Jerome Powell’s pirouettes in Q4 2018, the market then twisted his arm at Christmas 2018 and got what it wanted after all, the 2019 rally was the result.

By the way, because this dual mandate is what it is, the unemployment numbers every beginning of the month are also so important to the market because they effectively help determine FED policy.

Now, however, inflation is stupidly back and with inflation rates of 5% or 6%, the Fed *must* act, it cannot do otherwise in its dual mandate!

The problem is only, as strongly as the stock market is now inflated and how much the economy now correlates with it, a conflict of objectives arises. Because a too fast braking of the money flood can hit straight during the Pandemie the economy, to which the FED is just as obligated!

Therefore, it was a bit “wishful thinking” on the part of the Fed to describe inflation as “transitory”, i.e. temporary.I don’t want to. Because that would have spared her a difficult balancing act, which she now has to undertake after all. That’s not something you like to do.

So on Wednesday of next week, the Fed will quite certainly start tapering, i.e. reducing the stimulus. That has to be now in the face of inflation and the market knows since August and he has also priced in. That would not be a problem.

What is a problem, on the other hand, are the far more aggressive tones that have been heard from the Fed recently, implying that in 2022 there may not only be a sharper tapering, but perhaps also a first rate hike.

These tones are a problem for the market and especially for interest rate sensitive stocks, which also affects growth stocks with high multiples, because their high valuation is based on a discount factor that hardly exists at zero interest rates.

And if you think that this is new for the market, you are wrong. Because this discrepancy, this concern about a changed interest rate policy was already involved in the whole year 2021 to create an almost “schizoid stock market year”.

In the following chart you see on the one hand the NASDAQ100 of the 100 largest tech stocks, so there are the big names like Apple (AAPL), Microsoft (MSFT) or Alphabet (GOOGL) included, but also many well-known tech companies like NVidia (NVDA), Cisco (CSCO) or Intel (INTC).

These are almost all corporations that earn immense amounts of money and whose valuation may also be high, but which show every month with immense cash flow that there is real substance here. These corporations can almost not care if the FED raises interest rates, the valuation is backed by profits, they are usually swimming in money and idR also need to pay little or no interest on debt.

So these corporations have become something like “safe havens” for many funds and investors and those who simply invested in these tech corporations all of 2021 are now sitting here with around 20% annual gains and a fat grin on their face.

On the other hand, they’re looking at the ARK Innovation ETF, from the hyped fund manager -> Cathie Wood .

In it are many interesting future stocks of the category Teladoc (TDOC), Palantir (PLTR) or Coinbase (COIN), which usually do not yet really make profits and are highly valued mainly because of high expectations for the future.

However, it is precisely such stocks that are particularly affected when interest rates rise. On the one hand, because they themselves are often still carrying financing that has to be serviced, and on the other hand, because the future valuation is subject to discounting by the interest rate level – the higher the interest rate level, the less future profits are worth in the present.

Those who joined in the hype on these stocks at the beginning of the year in 2021 have had a frustrating 2021 in which nothing was to be gained and are in the 20% minus range if they simply held these stocks.

So two investors bought tech stocks in 2021. One the big blue chips, the other the smaller future stocks and the difference between the two portfolios is glaring!

Exactly that was the schizoid stock market year 2021 and that has just to a good extent also with the expectation to the monetary policy, which runs now next Wednesday on its dissolution and will surely lead to strong movements of the market.

What k

o come 2022 then?

Well, you know my attitude to it, forecasts are difficult, especially concerning the future, which is why I do not make any. For the big “white predictions” others are responsible, if you want to pay attention to something like that, you are rather wrong here at Mr. Market anyway.

But nevertheless, some things can be said, not as a whitewash, but derived from historical patterns. We will also discuss this intensively in the community, until 22.12.21 I am active with daily articles, then the blog goes on Christmas vacation for 2 weeks.

Which will also soon bring them back to the question of good intentions for 2022. And maybe they also want to invest once in their knowledge and skills in the matter of the market and therefore I want to make here now the only kind of advertising, which I allow myself from time to time.

Strictly speaking, it is also not advertising, but the honest documentation of the letters of members who write to me at the extension.

The last time I did this was in -> Rattling with Sugar Pieces half a year ago.

So here it comes, the real feedback from real members in the last 7 days. So all comments have been received in the last week! Many members have been paying members for many years, some now for almost 10 years. This longevity, this working together for success, is a trademark of Mr-Market anyway.

Read a cross section of what was written to me last week about Mr-Market by those who need to know – because they are renewing their membership.

And then consider joining, the turn of the year is actually ideal for reading in and making a fresh start!

Dear “Hari”,
thank you very much – as every year, but I like to repeat myself – for your not only competent, but also empathetic guidance through the stock exchange year. I wish you and your family happy holidays and in all respects a good and successful new year.

Thank you Hari – as every year very instructive and a super support (time factor) besides the professional life.

Hi Michael,
I read your analyses daily. They help me a lot in classifying the current stock market and world situation!!!
Thank you very much and many greetings

Dear Hari,
just admirable what you are doing!!!
I thank you for the impressive accompaniment in 2021 and continue to be particularly pleased about the diverse thought-provoking impulses away from the stock market events. Alone these differentiated contributions justify m.E. already the subscription amount in these times of the aggravation and “Alternativlosigkeit”.
I wish you a peaceful Christmas and a good slide into the year 2022. Stay healthy!…

Dear Hari,
on this way many thanks for your tireless efforts to classify and interpret the stock market events almost daily, showing the opportunities and risks, but also ways and possibilities to meet them. The live stream and the weekly outlook are the biggest help for me not to despair even in stormy weather. Happy Advent, Merry Christmas and all the best for 2022 to you and your loved ones.



thank you very much for your invaluable help.It was again an interesting year and very gladly I will renew my membership


A day without Mr.Market is not a real stock market day. I would like to give my son the opportunity to read along, because he should learn right from the beginning how to invest money properly. That’s why I have given him as a group member.


regards and I look forward to another year of membership


Dear Hari,
I would like to take this opportunity to thank you and the columnists for your great work. I notice more and more how my thinking structures are changing and I am learning bit by bit. My development is far from over and I hope to remain a member of Mr. Market for many more years.
I wish you happy holidays and a happy and healthy year 2022.

Thank you for the last five years of Guidance. It has helped me become consistently profitable. Merry Christmas to you and your family.

Dear Mr. Schulte,
thank you for your special way of teaching and all the excellent information in this blog. My personal growth, including a much improved investment return, is based in large part on your blog. In particular, one of your last articles – Serenity – has it all when you approach such topics.
A heartfelt thank you. I wish you a Merry Christmas, continued good health and a blessed New Year.

Mr. Market has become a daily companion for me, an important source of information and learning, even beyond the stock market. Thank you for the daily work you do here Mr. Schulte!

So what are they waiting for? Use the turn of the year for a new beginning!

Your Michael Schulte (Hari)

*** Please pay attention to the -> Legal Notice <- when using the contents of this post ! ***

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Kissig’s analysis of small caps: Muehlhan in upheaval

In Traderfox’s “Der Nebenwerte Investor” you will find regular analyses by me on German small and mid caps. “Der Nebenwerte Investor” is paid and who wants to order this magazine or one of the others from Traderfox, gets ▶

. Subscribers receive the new articles, not only those written by me, directly after writing in advance in their email inbox and the magazine with all articles then appears every 14 days.

Muehlhan AG is a specialist in surface protection and industrial services in the wind power, oil and gas, marine and construction sectors. At least until recently. That’s because Muehlhan divested itself of two business segments at once in order to focus more strongly on promising areas in the future and to improve its margins. In addition, the shareholders’ attention is naturally focused on the cash that has been filled to the brim as a result of the sales, since the company has so far remained cagey about how it will use it. In addition to acquisitions, dividends are also at the top of the wish list.

Muehlhan is one of the leading providers of specialty services related to surface corrosion protection, especially for ships, infrastructure facilities such as bridges, oil rigs and wind generators.

Corrosion protection

Muehlhan’s business segments are not sexy. But important. Over time, corrosion destroys even the best steel and requires constant care. The best-known example is probably the Golden Gate Bridge in San Francisco, which is so famous precisely because of its striking red paint. Clock designer Joseph B. Strauss actually wanted the bridge to be painted gray. But when the orange-red anti-corrosion paint was applied, he and above all the residents liked it so much that they stuck with this temporary solution. And this corrosion protection has to be constantly renewed, about every seven years, because otherwise the Bay Area landmark would be eaten away relatively quickly by wind and weather. And that in the truest sense of the word.

But the Golden Gate Bridge is just one of thousands of structures that require regular maintenance. In recent years, there have been more and more reports of dilapidated bridges in Germany; more than half of them are affected. Many are in need of repair work and quite a few have to be completely replaced. This is very expensive, and regular corrosion protection is comparatively inexpensive. If it is done consistently and right from the start. The coating is initially applied to newly built objects and renewed at regular maintenance intervals, which are between five and ten years.

Broad performance spectrum

Bridges, however, are not the only structures that will not last long without regular renewal of the corrosion protection. The same applies to oil and gas pipelines, to oil platforms in the North Sea, and also to wind turbines, both on land but especially at sea. And Muehlhan, with its nearly 2,800 employees, is active in all of these areas.

In addition to corrosion protection, the company has expanded its range of services in the past. It now includes passive fire protection, scaffolding, welding, insulation and industrial cleaning. By contrast, the importance of the formerly dominant but still important Ship Newbuilding/Repair unit has declined over the years. As a result of the diversification

g, the Industry and Energy segments now make the highest contribution to sales.

Regionally, Muehlhan focuses on Europe, the Middle East and the USA, with Europe accounting for the lion’s share at around 85%. In this context, 35% of sales are generated in the Industry segment, renewables already contribute 25% and the remainder is distributed between Ship and Oil & Gas, each with 20%. Until mid-2021, at any rate.


Muehlhan acts as a holding company with various subsidiaries in which the active business is conducted. In recent years, some industries have been struggling, such as the shipping industry and also the oil & gas sector. With energy prices skyrocketing at the moment, it is easy to forget that for years prices were low, mainly due to oversupply from the fledgling aggressive fracking providers from the US. As a result, there were more frequent project postponements and increased price pressure among service providers.

A year ago, Muelhan announced the sale of its North Sea oil and gas business. Specifically, this involved activities such as surface protection, fire protection, insulation and scaffolding for customers in the oil and gas industry. Here, Muehlhan simply lacked the necessary size to be successful in the long term.

In addition, the company wanted to strategically realign itself and focus more strongly on the renewable energy sector, for example work on rotor blades, high-voltage activities, corrosion protection or service topics such as occupational safety. However, the project then dragged on because two of Muelhan’s competitors also wanted to divest their activities in this sector.

Sale of scaffolding

business In August, Muehlhan somewhat surprisingly announced the sale of its wholly owned subsidiary Gerüstbau Muehlhan GmbH to Brand Energy & Infrastructure Services, based in Ratingen, Germany, which is part of the US-based BrandSafway Group. The purchase price was EUR 28 million on a debt-free basis.

Scaffolding was a relatively stable, albeit lower-margin, business segment. Its addressees include traditional building construction or special scaffolds such as for grandstand construction or advertising signs. In addition, however, the scaffolding business was also closely linked to the Oil & Gas business areas and in this respect the sale of the division was not entirely surprising, at least at second glance.

Sale of the Oil & Gas business

At the beginning of November, Muehlhan was then able to announce the completion of the sale of Muehlhan Öl & Gas. It completed the sale of all shares in MDK Energy A/S (Denmark) and Muehlhan Industrial Services Ltd. (Great Britain) to the Altrad Group. The transaction further implements Muehlhan AG’s strategy of focusing on its core business. At the same time, the business will be transferred to a buyer who intends to further expand it.

Impact on business figures

The two sales will naturally have an impact on business figures in 2021 and beyond.

In September, the company said that without the sale of Gerüstbau Muehlhan GmbH, it expected sales and earnings from operations to recover in fiscal 2021 compared with the previous year. However, the sales of EUR 295.3 million and EBIT of EUR 12.4 million of 2019 should not yet be reached again

en. The pre-Corona level was therefore somewhat higher.

The deconsolidation result from the sale of Gerüstbau Muehlhan GmbH, which is expected to be between 18 and 20 million, will be added to operating earnings. The sale was completed on October 1 and the deconsolidation result will therefore be realized in the 4th quarter of 2021.

With regard to the sale of Muehlhan Öl & Gas, the company said it would not be necessary to adjust its EBIT guidance for fiscal 2021. The transaction includes potential earn-out components that can be realized in fiscal year 2022, if necessary.

Here, a premium on the balance sheet valuation could have been expected due to the recent strong increase in energy prices. On the other hand, the potential increase in value could also have been reflected more clearly via the earn-out component; no details are known on this to date. Accordingly, potential additional earnings can be expected in 2022.

Nine-month figures

At the end of October, Muehlhan presented its figures for the first three quarters of the fiscal year. Following a weak 1st quarter due to the pandemic, the remainder of the year through the end of September 2021 saw a largely return to normal. Sales from January to September 2021 increased by €28.8 million year-on-year to €225.3 million. EBIT also recovered significantly to €8.2 million, compared with €2.0 million a year earlier. EBIT margin improved accordingly from 1.0% to 3.6%, but did not quite reach the pre-pandemic level. The nine-month consolidated net income attributable to Muehlhan AG’s equity investors increased by EUR 4.1 million to EUR 3.6 million.

Cash flow from operating activities amounted to EUR 30.9 million. It was positively influenced by the payment received in connection with the sale of Gerüstbau Muehlhan GmbH. Without this cash inflow, cash flow would have been significantly lower than the previous year’s cash flow of 12.5 million euros.

The Ship business unit showed a decline in the reporting period. Sales decreased from 49.1 million to 41.4 million.

In the Oil & Gas business area, business recovered from the COVID 19 effects. Sales increased by 13.5 million euros to 60.1 million euros, thus reaching pre-pandemic levels.

In the Renewables business, sales increased again significantly by 19.4 million euros to 68.1 million euros. Sales have thus doubled within two years.

In the Building/Infrastructure business unit, the reduced activity in the Middle East had an impact. At 55.5 million euros, sales were only 3.0 million euros higher than in the previous year, which was affected by the pandemic.

In the Marine & Construction segment, sales decreased by 2.5 million euros to 106.1 million euros, also due to pandemic-related project postponements.

The Energy segment continues to grow. Compared to the same period of the previous year, sales increased significantly from 87.7 million euros to 119.1 million euros.

Forecast for 2021

The company had not adjusted its operating forecast for 2021. It continued to depend crucially on the further course of the pandemic. Excluding further negative effects from Corona restrictions in the final quarter, the Executive Board and Supervisory Board of Muehlhan AG expect the company to generates fiscal year 2021 sales of around 290 million euros. EBIT of between €7.5 million and €10.0 million is expected to be generated from the operating business. Added to this is the deconsolidation result of around EUR 18 million to EUR 20 million from the sale of Gerüstbau Muehlhan GmbH, which will be realized in the fourth quarter of 2021.


Muehlhan will present its annual report at the beginning of April. This will reflect the impact of the two major transactions. Even more interesting should be the company’s outlook for 2022 and also what will be done with the money raised from the sales.

It is quite possible that Muehlhan would like to strengthen its activities, especially in the future field of renewables, through acquisitions. However, a special dividend and/or significantly increased dividends for the next few years could also be in the offing in order to allow shareholders to participate in the sales proceeds.

Shareholder structure and takeover fantasy

The repositioning with the future-oriented Renewables segment and the now amply endowed cash position also make Muehlhan interesting for potential buyers. However, more than half of the shares are still in the hands of the founding family, with whom a potential buyer would therefore absolutely have to come to an agreement.


An adequate valuation is difficult. This is mainly due to the major upheavals, because the sale of the Scaffolding and Oil & Gas divisions has resulted in a loss of sales and earnings, but also in a cash inflow. In any case, one should not be blinded by the P/E ratio for 2021, as this is strongly positively distorted by one-off effects.

As a result of the sales proceeds, net debt has turned positive and net liquidity of a good EUR 19 million is expected for 2022. Thus, Muehlhan’s balance sheet is very solid. Cash flow, on the other hand, is positively influenced in 2021 and 2022 by the cash inflows from the two sales and the expected earn-out component.

Net income is expected to be EUR 4.10 million in 2022 and EUR 4.20 million in 2023. Earnings per share are expected to be EUR 0.21 and EUR 0.22, respectively.

However, these estimates are based on weak foundations. The serious impact of the two divestments and their precise financial impact cannot yet be estimated. The first clarity will come with the presentation of the annual figures at the beginning of April.

Bullcase vs. Bearcase

Muehlhan is well positioned in the competitive environment. It is confronted with a larger number of predominantly smaller competitors, but shines with comparatively strong financing power and a high level of cash on hand as a result of its sales. Added to this are the long-standing customer relationships and the brand name and tradition resulting from quality and tradition.

The capital intensity of larger and more complex orders limits to a certain extent the achievable return on capital employed. On the other hand, it also creates barriers to market entry for smaller competitors. This is another reason why Muehlhan has withdrawn from areas where it has not reached critical size itself.

The Shipping segment is likely to remain challenging. Despite a sharp rise in freight rates and correspondingly strong figures for shipping companies, shipbuilders are suffering from the disruption of the global

wide supply chains and overcapacities. As a service provider, Muehlhan could benefit from the expected market consolidation, as less diversified and financially weaker competitors could withdraw from the market.

The balance sheet is currently a black box, as the impact of the divestments is not yet reflected in the figures to date and the 2021 annual report will not be presented until early April. The same applies to management’s outlook, which should provide clarity on the future strategic direction and use of funds.

The valuation with an expected P/E ratio of 17 does not appear overambitious. Here…

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News from Tick TS / Presentation at MKK

I have already reported on Tick TS several times: In my original article, in an update from MKK and with a small AGM report from this year. From my original buy price (just under €17), the stock has now worked its way up to €29, but given that the dividend is now rising to €2, that’s still not much. (In fact, in my original post I had written:

[…] I consider a dividend yield of 5% to be a fair valuation. Since the profits are distributed, this would correspond to a P/E ratio of 20. If we assume earnings of €1.90 per share for 2020, the share price could therefore rise to €38 in two years.

I was actually not that wrong, in November tick TS reported a record profit of about 2€ per share:

tick Trading Software AG (tick-TS AG) closed the 2019/2020 financial year (01.10.2019 – 30.09.2020) with a net profit of €2,003 thousand (previous year: €1,655 thousand), according to the annual financial statements prepared today by the Executive Board. Earnings per share amount to EUR 1.99 (previous year: EUR 1.64) and earnings before taxes amount to EUR 2,926 thousand (previous year: EUR 2,371 thousand).
tick-TS AG’s revenues increased by 8.93% to EUR 7,308 thousand (previous year: EUR 6,709 thousand). The Company’s financial performance indicator, earnings before interest and taxes (EBIT), increased by 23.49% to EUR 2,928 thousand (previous year: EUR 2,371 thousand). Taking into account the profit carried forward from the previous year (EUR 76 thousand), the unappropriated profit amounts to EUR 2,080 thousand.
The dividend proposal of the Executive Board and Supervisory Board for the past fiscal year is expected to amount to EUR 2.00 per share after application of Section 268 (8) HGB (recognition of deferred tax assets).

Tick TS is currently my third largest position and I am very satisfied with it. Then recently there was also a forecast for the next (already started) fiscal year:

[…] For the further developments of its product portfolio as well as the timely implementation of stock exchange releases and projects, tick-TS AG plans to hire four additional employees in the areas of Development, Project Management and System Operations in the 2020/2021 financial year.

[…]. Assuming a stable regulatory environment and the continuation of increased trading activity on the exchanges, the Executive Board is cautiously optimistic that it will be able to achieve net income of EUR 1,800 – 2,100 thousand in the 2020/2021 financial year.

The increase in the number of employees clearly shows that the order situation is apparently well assessed and is a clear sign of optimism. The profit forecast, however, “only” envisages a result at around the current level, although many companies tend to plan more cautiously in order to increase the forecast in the event of a good performance rather than the other way round.

Munich Capital Market Conference

Also this year, Tick TS presented at the (virtual) MKK and a reader provided me with a summary of the presentation. This sounds very positive (especially regarding the outlook in the current environment with many new private investors) and lets me continue to expect a positive development. The presentation slides can be found here, and now here is the report:

Tick Trading presentation at mkk on 08.12.2020

-> The board members Carsten Schölzki and Gerd Goetz presented
-> According to Gerd Goetz, there were 52 participants in the presentation; this was significantly more than the 11 participants who attended the Tick presentation at the mkk event last year.

Carsten Schölzki

– Gerd Goetz has been a member of the Tick Management Board for some time and was previously Managing Director of HSBC Transaction Services GmbH for a long time.

– I have only been with the Tick for a year and have been a member of the Tick Executive Board since the beginning of 2020.

– I used to be managing partner of WWK GmbH in Berlin for a long time

– At Paypal, I was responsible for development with teams in Germany, India and the USA; and most recently I was CTO at figo GmbH

– Tick is an incredibly attractive company for me, because it is relatively small with 20 employees, but at the same time quite stable and profitable.

– Tick is amazingly old for a fintech; founded in 2002; we just came of age;

– What I really like is that 80% of our revenues are recurring;

– To me, we have a very attractive combination of flexibility, because we are so small, and stability, because of the high percentage of recurring revenue

– We are specialized in stock market access systems

– We do everything as SaaS

– We can expand our product portfolio modularly

– Our customers are banks and financial intermediaries;

– Sino was part of the founding team in 2002; HSBC is very important, we make most of our revenue with them; and Trade Republic is currently something they read about every day

– What do we do for our clients?

– The TBMX trading platform is the heart of our product range, because that’s actually what all our clients use; the TBMX runs as SaaS on our own servers and can be used directly as an API; but you also get a graphical interface for the TBMX from us, which is very good for trading; but we have also developed a white label app for the system in the meantime; the white label app is slimmed down in terms of functionality, because not everything fits on a small smartphone screen;

– We also have other products, a compliance system, settlement monitor, etc.;

Gerd Goetz

– We have generated a positive result in every year since our founding;

– We have a high equity ratio and pay a continuous dividend;

– We have a full distribution requirement in our Articles of Association, i.e. the entire profit is to be distributed to the shareholders every year in the form of a dividend; as far as I know, we are the only listed company in Germany that has a full distribution requirement of the annual profit in its Articles of Association;

– How can we afford that? Because we do continuous services and projects with our customers and because we don’t invest money in research and development without partners stecken; we only make new developments if a partner pays us for them.

– We want to hire 4 more people in the current fiscal year

– The figures for the past fiscal year (up to 30.09.2020) have not yet been audited, this will happen next Monday (14.12.2020), when we have the balance sheet meeting.

– We see a nice increase in the dividend; the magic 2 Euro number has fallen;

– We have only 1 million shares and 82% free float; yes we are an exciting company but have no shares on offer;

– For the current fiscal year, we expect earnings to be in a range between another record year or just below the level of the previous record year in 2019/20;

Carsten Schölzki

– The savings culture of the Germans – I can still remember opening a Knax account at Berliner Sparkasse when I was a child

– Saving was incredibly important to my parents and grandparents

– But the savings culture of Germans is changing, but very slowly; in 2014 there were penalty interest rates for the first time; since then interest rates haven’t really improved; still customers leave their money in savings accounts and call money accounts; but in 2020 this has changed a bit due to the corona crisis; although there have been some good reasons to move away from it for years, it only really took off during the pandemic

– The German Angst; at Paypal we talked about the cautious conservatives; because if you want to introduce anything new to the Germans that has to do with money, you have to explain a lot first

– for many normal savers the stock market didn’t seem very attractive in the past for several reasons
1.) at that time there were still interest rates
2.) there were rather negative scandals and that in both directions – either someone lost a lot of money or he was cheated
3.) the T-share didn’t increase the confidence of the Germans in the stock market either;

– Actually, this trend could have started a few years ago and the Corona crisis is now acting as a catalyst; suddenly there is a lot of trading going on; we are also noticing this in our turnover; we simply have a lot of new participants in the stock market who want to join in.

Gerd Goetz

– You can ask yourself why the increased trading on the stock market is important for us.

– Variable revenue used to be 20% of our revenue; of course, this figure is no longer correct for FY 2019/20, but is more like 30%; Actually, I wanted to reduce the share of variable revenue because a software company prefers to have steady revenue; then the only risk is the length of the contracts and possible terminations;

– We have a hybrid billing model with some customers; we get load-based compensation, which means more orders means more servers, more computing power, more revenue for us;

– We also grow with our customers if they want front ends – e.g., a new app or are just starting up; We are seeing a trend right now in Germany that new online brokers are being established.

– We are seeing tremendous growth in ETFs right now; we are happy to support that with our software solutions

– HSBC, comdirect, Trade Republic and sino, are customers we are growing with;

– We thought that these high turnovers on the exchanges could not be sustainable; however, there are now more and more voices saying that this is the new normal;

– The skyrocketing turnover on LSX is not only coming from Trade Republic, but also from other clients of the exchange

– These high turnovers are mainly on the marketplaces where market makers take care of retail clients (LSX, Tradegate, Euwax, Gettex, Quotrix); the consumer-driven market is growing extremely; Xetra, as an institutional trading venue, is also growing, but not as dramatically as the retail clients’ trading venues

– We have 52 participants in the call right now;

– There is something second that confirms this trend – the new financial blogs, podcasts, videos, etc.; e.g. Madame Moneypenny, which deals exclusively with women’s securities investments;

– The new generation of investors no longer care about the bank advisor or securities specialist; they look for their information on the Internet from these financial blogs, among others; the high follower numbers confirm this new trend;

– Pres. p. 16: This is the list of reasons for an ongoing boom in the capital market; and I have listed for you two reasons that could stall the boom;
1.) Social trading, fueled by the social networks;
2.) Interest rates remain low
3.) Gold is expensive and doesn’t pay dividends
4.) Art and vintage cars are selling off
5.) Banks want and require high cash balances to be invested or introduce negative interest rates
6.) Neobrokers are promoting ever cheaper trading
7.) Apps put your securities account in your pocket
8.) Gamification of securities trading

– The gamification of securities trading by the neobrokers leads over to the critical side of the boom; if consumers spend hours on the stock market by participating too easily, perhaps even become addicted, regulation could intervene;

– Many brokers live today from the reimbursements of the trading places; that there is payment for order flow in Germany, is seen very critically in other countries; here it could come also to a prohibition.

– The FAZ am Sonntag has just commented on the current trend in the article “Die neue Lust auf die Börse” (The new desire for the stock exchange); many of the new investors do not really notice the setbacks, because the majority of them are not invested in old economy stocks, but in the big tech companies, which have done very well this year;

We already know our November numbers; Sino has already released their November numbers; We see another complete increase in trade numbers across all clients and that makes us so confident in the forecast

What is the outlook for growth and with a European exp

ansion out?

– It is

difficult to forecast sales for the next 10 years; but we can look at the opportunities and risks;

– Opportunities: There are new and old players in the market who (want to) take more care of the private investors; they need both a connection to markets and a connection to a settlement bank and maybe also a front end;

– In Germany there are only two settlement banks that can take real volumes and big players; these are DWP Bank (of the Sparkassen, Volksbanken and some private banks) and HSBC Transaction Services (the former employer of Mr. Goetz) – there are no more; that is almost a duopoly; with HSBC we are very well wired and they are also indirectly part owners of us; we can support providers on the way to HSBC very well; I think that hardly any other partner succeeds as well as we do;

– We also see great potential in our white label app, but it has not really come to fruition yet; this app is a new front end and just right for customers who also need a face to the customer; that…

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