Disappointing Q1; Estimates adjusted and PT down; Remains a BUY

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The Social Chain (TSC) released Q1 results, with a sales increase by more than 105% to EUR 124.8m and an EBITDA improvement year-on-year from minus EUR 6.1m to EUR 23.9m. However, this positive development is solely due to the sale of the subsidiary KoRo, which contributed EUR 39.2m. As guidance was reduced again in light of several headwinds, we adjusted our estimates as well. AlsterResearch will host a Roadshow on June 3 with both managers, Wanja S. Oberhof and Ralf Dümmel. Investors can register and participate via research-hub.de. We expect more insights regarding the ratio of the most important transaction in TSC’s history and an outlook regarding a challenging year, characterized by inflation, war and rising interest rates. We are therefore significantly reducing our expectations and consequently our valuation as well. Reflecting higher costs of capital additionally, our new DCF-based price target sits at EUR 26.00 (old EUR 51.00). But after losing more than 80% since its all-time-high (EUR 59) back in November, our rating remains BUY. In our view, most of the negative effects seem to be reflected in the current share price.

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