EV Digital Invest AG

Strategic partnership to unlock renewable energy projects

Frederik Jarchow28 May 2024 06:11

Topic: EVDI announced to have entered a strategic partnership with Green FOX Energy – a project developer and owner of renewable energy plants. The cooperation enables EVDI to offer direct investments into renewable energy projects to its customers via its platform. In detail:

With this cooperation, EVDI is further expanding its product range of “Engel & Völkers Digital Invest” that is currently comprising real-estate investments into residential, office and logistics. The added green investment opportunities not only give investors the opportunity to diversify their investments even more broadly, but also to directly participate from the transformation of the energy infrastructure. The offered projects should allow low minimum investments of € 100 and rather short terms of only 12 months.

In our view, the partnership should bode well for EVDI as 1) renewable energy is one of the current megatrends showing a steep growth trajectory, 2) it should further diversify the business by reducing the dependency from the developments in the real-estate sector and 3) it should attract new target investor groups. Even better, operational EVDI can build on its established two-stage review process (internal and external analysis by renowned experts) used for real-estate projects. As a result, the first solar project (“Solarpark Eyendorf”) is already available on the platform.

Going forward, we expect more renewable projects to follow as Green FOX Energy´s project pipeline is well filled with around 2GW peak and the demand for electricity generation from renewable energy sources is expected to increase by more than 60% until 2026 (according to the IEA).

In light of the promising strategic partnership with Green FOX Energy, paired with first signs of revitalization of the real-estate market mainly stemming from the anticipated reduction of interest rates, EVDI should easily achieve its conservative guidance of € 4.9-5.8m in op. income (vs eNuW: € 5.6m) and up to € -1.9m EBITDA, (eNuW: € -2m). While we see the growth potential arising from the partnership, we play it safe, leaving our estimates unchanged for now.

BUY on valuation with an unchanged PT of € 3.60, based on DCF.

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