07. September 2021 | 11:12 CET
HelloFresh, Zalando, AdTiger - Digitization conquers not only the DAX
Digitization is on the rise: in our lives, in the stock market and also in the DAX. And so, after more than 30 years, Germany's leading index is getting a makeover. On September 20, 2021, it will be expanded from 30 to 40 companies. With the newcomers, more digitalization is also moving into the elite index like the cooking box delivery Company HelloFresh and online fashion retailer Zalando. Both companies are benefiting from the trend toward digitization and have grown rapidly in recent years. Analysts continue to see potential. Hot stock AdTiger is still far from billions in sales, but its focus on online advertising offers exciting prospects.
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ISIN: HELLOFRESH SE INH O.N. | DE000A161408 , ZALANDO SE | DE000ZAL1111 , ADTIGER CORP.LTD. | KYG009701064
AdTiger optimizes online advertising at Google, TikTok and Co.
Online advertising is now probably part of every advertising campaign. To reach a young consumer-friendly target group, advertising on TikTok, Snapchat & Co. is a must for every Company. At the same time, however, a lot of advertising budgets can be burned on the platforms. AdTiger wants to prevent this. The digital marketing specialist optimizes campaigns for Asian companies, particularly on the world's largest social media platforms such as Facebook, Google, Snapchat, Twitter, and the most important Chinese media platforms. Its proprietary platform AdTensor leverages algorithms and artificial intelligence to automatically optimize and manage ads in real-time to generate the highest conversion potential and maximize monetization. AdTensor connects to media publishers' platforms, collecting user data via an API connection. In this way, behavioral patterns can be analyzed and leveraged. The services seem to be well received by customers: in 2020, AdTiger was named the fastest-growing digital marketing Company of the year at the 20th IAI International Advertising Awards.
Currently, the Company is pushing growth in ASEAN countries such as Indonesia, Singapore and Vietnam, and especially in China. At the same time, it is investing in its own apps. For this purpose, AdTiger has founded the investment Company Quingdao. Due to investments in regional expansion and app activities, profit in the first half of the year fell by around 41%. However, this is said to be a one-off event. Therefore, the stock offers opportunities as a hot stock. The stock is listed on its home exchange in Hong Kong under the symbol 1163 and in Frankfurt. The market capitalization is around HKD 520 million, the equivalent of EUR 56 million.
HelloFresh: DAX is only a stopover
HelloFresh has been growing rapidly for years. The fact that the restaurant business was repeatedly closed during the Corona pandemic has also boosted business. The ascent to the DAX is the result. However, it should only remain a stopover. The cooking box shipper wants to continue to grow and is therefore investing in expanding capacity. For the time being, this is at the expense of earnings. In the second quarter of the current year, HelloFresh has turned over around EUR 1.55 billion (Q2 2020: EUR 972 million) and thus reported slightly more than analysts expected on average. Adjusted EBITDA was also slightly above analysts' expectations of EUR 155 million at EUR 158 million (Q2 2020: EUR 154 million). For the full year 2021, the digital Company even raised its revenue forecast from between 35% and 45% to between 45% and 55%. But not so with profits. Due to the accelerated expansion of production capacities, fulfillment costs in the current year are expected to be higher than initially assumed. As a result, the forecast for adjusted EBITDA margin for the full year 2021 has been reduced from 10% - 12% to 8.25% - 10.25%. That is below average analyst estimates of 11.1%. Nevertheless, the majority of accompanying analysts recommend HelloFresh's stock as a buy. Kepler Cheuvreux has slightly raised its price target for HelloFresh from EUR 102.70 to EUR 103.60. The analysts are relaxed about the lowered margin outlook. The British Barclays also recommends buying the stock with a target price of EUR 100.
Zalando: Net positive impact on people and planet
The second digital DAX climber is Zalando. Founded in 2008, the online platform for fashion and lifestyle has also grown enormously in recent years. The Berlin-based Company now supplies over 45 million active customers in 23 countries with clothing, shoes, accessories and cosmetics. The Company likes to refer to its version of wanting to become the Starting Point for Fashion - the first port of call for fashion - and a sustainable platform with a net positive impact on people and the planet. In addition to selling its own and third-party brands, the marketplace where regional retailers can present themselves has now become Zalando's growth engine. The online retailer's long-term goal is a 10% share of the overall European fashion market. Zalando estimates this at around EUR 450 billion. RBC analysts are optimistic that the online platform will be able to expand its market share further. They also say the Company is on the right track with its brand partnerships. RBC recommends the Zalando share with "Outperform" and a price target of EUR 121. Following the latest quarterly figures, Deutsche Bank also renewed its buy recommendation and target price of EUR 120.
Zalando and HelloFresh have been growing strongly for years and were rewarded with the DAX promotion. While this is no guarantee for a successful future, analysts remain optimistic. AdTiger has yet to prove itself but is already active in a fascinating market with online advertising.