April 1st, 2021 | 06:09 CEST
TUI, The Place Holdings, Nordex - Watch out: Buy signals!
Table of contents:
TUI AG - Sentiment play for traders
On March 25, TUI invited its shareholders to the virtual annual general meeting and provided extensive information about the started bookings for summer travel and further prospects. The share of Europe's leading tourism group has been on a roller coaster ride in recent months. When the stock market played the "re-opening plays" card from mid-February to early March, the share price jumped 40% to EUR 5.20. Currently, the stock is consolidating at the upper end of a range from EUR 4 to EUR 4.40.
Progressing vaccination campaigns, better availability of rapid and self-tests and the opening strategies of some European governments showed a positive effect on the booking behavior of TUI customers. First and foremost, TUI expects a tremendous pent-up demand for Germany and the UK. Currently, the Group has bookings from 2.8 million guests for summer 2021. Although this is around 60% less than the pre-crisis level in 2019, prices are a good 20% above the comparable level.
Even if conditions brighten, the re-opening play remains vulnerable to setbacks. In many places, progress on vaccination is too slow, and the risk of another Corona wave with new variants is real and more likely than unlikely in the coming months. In addition, politics plays an important factor that is increasingly difficult to calculate. Certainly, TUI stock is a direct beneficiary of a brightening sentiment and is well suited for trades. From a purely fundamental perspective, the stock is too expensive, with a market capitalization of EUR 4.8 billion. The often-cited "liquidity" of EUR 1.6 billion that the Group has at its disposal is, strictly speaking, the sum of cash and open credit lines. Thus, the clock is ticking for the travel provider to significantly pick up its operating business and turn a profit. The Company is more of a restructuring case than a turnaround, but the stock is excellent for trading.
THE PLACE HOLDINGS LIMITED - Diverse and full of opportunities
The Singaporean investment holding company is backed by an experienced management team, which invested around SGD 94 million in 2016 and renamed the "investment property" The Place Holdings. The holding company is active in the real estate, tourism and media sectors. Its recipe for success is a keen eye for innovative business concepts and assets with high value growth potential.
Over the years, the Company has left a significant footprint in Singapore and China. In particular, the Company sees a lot of potential in Singapore's real estate market given strong economic fundamentals, political stability and the legal system and holds two projects here. The holding company has a tourism mega-project in its portfolio with Mount Yuntai Tourist Township. The site on the Chinese mainland covers around 270 square kilometers. With at least ten scenic spots, the site is to be developed into the equivalent of the Grand Canyon and attract 7 million visitors a year. A tourism ecosystem will be built around the theme parks with innovative hospitality, integrated retail, commercial and residential properties, and several wellness resorts.
The third area of activity, "Media," focuses on outdoor advertising. At its core, the strategy pursued in this segment is about developing innovative business concepts, such as "new retail" solutions and omnichannel strategy, and integrating them into the real estate and tourism business. With this approach and a forward-looking corporate culture, The Place Holdings is expanding its operations in Singapore and China in industries with growth potential and is growing organically and inorganically. The Company is currently valued at SGD 688 million. The assets are conservatively accounted for. The further development of projects in the real estate and tourism sectors should give the share further positive impetus.
NORDEX SE - Outlook inspires investors, buy signal on the chart
A good week ago, the North German wind turbine manufacturer published its figures for the past fiscal year. The Company was quite shaken by the pandemic. Lockdowns resulted in massive delays in the supply chain; at times, production was at a standstill in different factories. In addition, Nordex had to pay compensation to its customers due to delays. As a result, the Group widened its loss from EUR 73 million to EUR 130 million.
So much for the past - what really excited investors was the outlook that the MDAX Group gave for the current financial year. Nordex assumes that the effects of the Corona pandemic will be significantly reduced from the second quarter onwards. Sales are expected to rise to between EUR 4.7 billion and EUR 5.2 billion for the year. The operating margin (EBITDA) is expected to be significantly expanded to 4.0 to 5.5% as the fruits of the corporate program launched in 2020 to increase efficiency and profitability can now be gradually reaped. Core elements are the expansion of production capacities in India to 4 GW turbines and the optimization of the supply chain. In addition, Nordex confirmed its 2022 targets with sales of around EUR 5 billion and an EBITDA margin of 8%.
Based on this good outlook, the stock rallied. In the last few days, the momentum has again increased significantly as the Group has announced three major orders since the AGM - most recently yesterday and the day before. At the current price, the shares are trading at a multi-year high. If this area is overcome, which we expect, the share has room to move up to around EUR 33.
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