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Equity Story

  • Affordable houses as constructed by Traumhaus remain highly desirable by an ever increasing target group of young families. Especially in an economic downturn, price becomes a key selling argument.

  • The scarcity and thus further upward trend in land prices will continue to guarantee continued high profitability. We expect a similar trend to that already seen in the USA to establish itself on the real estate market in Germany: many young families are once again moving to suburbs and small towns further afield with good transport links to the inner cities of metropolitan regions.

  • A change in the building law is also providing additional tailwind. The “model type approval”, has now already been introduced by two federal states (Hamburg and North Rhine-Westphalia), is a tailor-made fit for the “Traumhaus concept” of standardized residential units. This will enable building applications to be approved much more quickly throughout Germany in the near future.

SWOT Analysis

Strengths

  • More than 25 years of experience in the core product, terraced houses

  • Pioneer in serial modular construction

  • Terraced house as a successful series product

  • Offer prices below market prices

  • Serial construction reduces sources of error and protects against resource claims

  • Strong roots in the Rhine-Main growth region

  • Close proximity to customers

Weaknesses

  • Low equity ratio compared to listed competitors

  • Low free float and small number of shares limit the tradability of the share for large investors

Opportunities

  • Positioned in two segments of the real estate market that are continuing to grow quickly: young families (low-cost terrace houses) and senior citizens (small accessible apartments). Both segments also promise dynamic growth in the future

  • Cost and acquisition synergies through expansion of the apartment segment (multi-storey construction)

  • Particular expertise in major urban planning projects (e.g. Mannheim Funari, Wiesbaden Erbenheim) creates a high level of acceptance as a construction partner for municipalities

  •  High scalability, for example through expansion into other German growth regions

  • Automated prefabrication

  • Company growth and capital measures might increase the fungibility of the share

Threats

  • Delays in the approval of development plans, particularly when large plots are purchased

  • Cluster risk due to larger projects

  • Uncertainty about the success of automated pre-fabrication with new brickwork

  • Obstacle to growth: qualified personnel

  • The success of the company has so far been closely aligned with a single person, CEO and major shareholder Sinner

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