Adler Group, BrainChip, Verbio - Exciting developments!

Adler Group - "Battered but vital"?

For some time now, the Luxembourg-based real estate company has been negatively represented in the press. The trigger for the most recent slide in the share price of one third was that KPMG Luxembourg issued a disclaimer of opinion for the consolidated and individual financial statements for the past fiscal year. The auditors cited "denial of access to certain information about related parties" as the reason. That is a resounding slap in the face for the SDAX stock. However, the Group merely points out that the audited consolidated financial statements were published within the relevant deadline of April 30, 2022. Thus, the bond covenants remained intact.

As a result of the failure notice, all members of the Board of Directors who held a mandate in 2021 have collectively offered their resignation with immediate effect. However, in order to facilitate an orderly transition, these individuals will not step down until the Annual General Meeting on June 29. The Chairman of the Board of Directors, Prof. Dr A. Stefan Kirsten, expressed his surprise at the acuteness of the auditor's statements regarding the governance and compliance problems.

Reflecting critically, Kirsten nevertheless looks positively to the future: "Such a note reflects a high degree of mistrust between the Company and the auditors; but once again: we are on the verge of a new beginning because Adler has sufficient substance, in my opinion. Our existing portfolio is rock solid. The disclaimer is the confirmation of an audit without a final verdict. We have to accept that, but we will try to eliminate the reasons for it as quickly as possible. We are and remain, as I said at the special investigation, battered but vital."

On May 3, the Group, formed by the merger of ADO Properties with Adler Real Estate and the subsequent acquisition of Consus Real Estate, will present its 2021 figures. Although rental income and FFO increased, the EUR 1.083 billion write-downs on the Consus shares resulted in a pre-tax loss of EUR 1.023 billion (PY: EUR +383 million). The reasons are increased construction costs and a significant reduction in the expected project development volume.

The following days and weeks will shed more light on the situation. Meanwhile, the share and bond prices speak their own language. Messages from the auditor and the resignation of board members underscore the seriousness of the situation. The share listing at a fraction of the reported NAV of EUR 36.33 fits the picture.

BrainChip Holdings - When will the consolidation phase end?

The Australian technology company impressed with innovations such as the development of a neuromorphic processor called Akida. In addition, the Company managed to secure several patents in the recent past. The protection of the processor design at the US patent office is worth mentioning here. Part of the patent is the so-called Spiking Neural Network (SNN), which imitates the functioning of the human brain by convolution of input information. Customers include the US military and Daimler.

Two recent collaborations stand out as well. First is the partnership with NaNose Medical. A portable coronavirus testing device will be developed with the Company based on the Akida chip, which detects viral contamination purely from the exhaled breath. That means that this procedure takes effect at a much earlier stage, is faster, and is more reliable than a PCR test.

Secondly, there is the collaboration with nViso SA. Their solutions make it possible to analyze human behavior signals such as facial expressions, emotions, gestures and activities based on which users interact. Potential applications are identified in the fields of robotics and surveillance systems.

The recently published quarterly figures were disappointing in the eyes of some market participants. The shares are currently trading at just under AUD 1, valuing the Company at around AUD 1.7 billion or EUR 1.1 billion.

Verbio Vereinigte BioEnergie - Who is on the wrong track here?

Recently, the biofuel producer raised its annual forecast again due to high demand and advantageous prices. The Group aims to increase operating profit (EBITDA) to around EUR 430 million by the end of the fiscal year on June 30, with the final figures to be published on September 27. Previously, the guidance had been only EUR 300 million.

Instead of rising, however, the share price fell significantly. The market and Verbio apparently blamed the statements made by German Environment Minister Steffi Lemke in an interview with the Augsburger Allgemeine newspaper. In Lemke's view, agrofuels from food and feed crops "are not a sensible option. Agricultural land is limited worldwide, and we urgently need it for food, as the war in Ukraine dramatically demonstrates," Lemke said.

Verbio countered with a company release in which the Company called Lemke's remarks "ill-considered" and also stated, "...that unprofessional communication by the German government leads to uncertainty in the capital market when it comes to shaping the energy transition or when it comes to the importance of biomass for this transformation...". The fact is that Verbio, according to company statements, is focusing on raw materials that are not used for the production of food and increasingly on agricultural residues, such as straw.

Uncertainty is a good breeding ground for opportunistic investments. Verbio certainly falls into this category. At Adler, there are currently still too many question marks. With BrainChip, long-term oriented investors should be on the winning side.