August 10th, 2021 | 10:29 CEST
SAP, AdTiger, TeamViewer - Digitization remains the trump card!
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Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
SAP - Making the leap with the cloud
Things are looking better again at SAP; the meager outlook from the fall of 2020 seems to have been leveled out. The software specialist is now in the midst of a cloud transformation. In the first half of the year, the Walldorf-based Company was able to sign important contracts with numerous key customers, including IKEA, Bosch Siemens Hausgeräte and Douglas. More than 16,400 clients are now using the new S/4 HANA package. The Corona-related temporary investment restraint continued, but SAP's positioning is still excellent due to its ERP penetration.
The focus of SAP's sales team is currently on convincing customers to adopt the Company's own "Rise with SAP" cloud solution. However, current surveys show that many contacts do not really want to go along with the cloud shift. The expansion of the strategic cloud partnership with Google should now help. As always, the main issue is the migration of systems and business processes to the cloud. Some users fear losing control of their data because it will be managed externally in the future.
Along the way, SAP wants to shine with additional services in artificial intelligence (AI) and machine learning (ML). Reservations remain because, according to a recent survey, 39% of the SAP user group DSAG question the added value of the "Rise with SAP" cloud offering. Collaboration with a global corporation like Google could create more trust among customers and users, but it could also scare some off. It will be very interesting to follow further developments, especially in the German mid-market.
For the full year 2021, SAP is forecasting a growth of 14% to 18% in cloud revenues to about EUR 9.4 billion. The share was able to close the gap from November at around just under EUR 126. It now remains to be seen whether the current momentum is suitable for even higher price targets.
AdTiger - Online advertising with a focus on Asia
Like SAP and Google, AdTiger also tries to ensure optimal Internet use for its customers. That means maximum exploitation of the available information for its own purpose, mostly for advertising or reach generation. AdTiger is a grown online specialist; the Company mainly places advertisements on well-known websites, such as Facebook, Google, Twitter, Snapchat or even TikTok. In doing so, AdTiger uses its technology to achieve high hit accuracies with regard to the target group.
In contrast to the big players in the Chinese tech market, AdTiger is admittedly still manageable in size. Yet, it already occupies a place in digital marketing because the growth rates in the performance marketing sector are enormous for AdTiger. The agency's customers are predominantly in China; expansion into other countries was complex due to the pandemic but will be tackled again in the next few years.
The position as lead agency or export partner in relation to Google or Facebook is outstanding. With services such as TikTok and WeChat Video, the Company is a respected partner, especially in the ASEAN countries. In the future, the Company also wants to invest in its own apps. This is being done with its own investment company out of Quindao.
The stock is listed in Frankfurt and on its home stock exchange in Hong Kong under the symbol 1163. Its market capitalization is HKD 560 million, the equivalent of EUR 60 million. With its attractive positioning, AdTiger is one of our top picks in the online advertising sector for 2021.
TeamViewer - That could be it now
TeamViewer closed the past quarter with a slump in profits. However, the Swabian software company is sticking to its annual targets for 2021. In the last two weeks, the share price has even fallen below the issue price of EUR 26.25. What is going on here?
A year ago, the software provider benefited from strong special demand for online services, driven by the outbreak of the Corona pandemic. Profits picked up significantly, but now a growth dip is following. At the peak of the profit momentum, management also announced expensive sponsorship deals, such as the Premier League and Formula One.
According to TeamViewer, profits between April and the end of June were EUR 14.7 million. A year ago, the comparable figure was more than EUR 30 million. So-called billings from remote maintenance and Onlime team sessions climbed 18% to EUR 268.1 million in the second quarter, while the number of subscribers rose in parallel to 623,000 - up 20,000 from the previous quarter.
All in all, management does not cast doubt on its capabilities, as it remains confident. The Company is now forecasting an increase in billings at the lower end of the range between 27 and 31% and sales of EUR 585 to 605 million. The share has briefly lost after the figures, but the value could now have arrived below its output line. In February 2021, the high was once above EUR 49 - we currently recommend re-entry!
Digitization companies are swimming on a wave of success. They are operating the right business model at the right time. However, the facets are very different. While large companies like SAP and TeamViewer have to invest enormously, a small and flexible provider like AdTiger can develop enormously with innovations for the customer on-site.
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