Inderes Group - Backbone remains solid - SEB

We do not fully extrapolate the clear miss in Inderes’ December sales. Importantly, the company continues to win more commissioned research agreements, which remains the backbone of the case, in our view. During 2023, the company built its Swedish foundation and further developed its comprehensive offering, which we think can support mid-single-digit growth, even if the market remains in a headwind.

December sales disappoint, partially due to postponements

Inderes’ December sales clearly missed our estimate, resulting in a EUR 0.3m miss for Q4 sales. The miss was due to the event business, which endured postponements and cancellations in an already tough market.

Market remains a headwind, but we see many avenues for growth

Despite the hefty miss in December sales, we forecast 6% growth for 2024. Inderes can lever its comprehensive set of IR solutions, meaning cross-selling opportunities for existing single- or dual-product clients. For example, we believe Inderes can further increase its penetration within Finnish AGM services. Also, with a comprehensive offering for IR solutions, Inderes can reduce its clients’ total costs, which we think could be a solid selling point in 2024. Looking at 2025-26, we think Inderes is positioned to accelerate its growth should its Swedish expansion continue. Should Inderes gain critical mass (mainly within equity research), winning new deals should become easier, as it did in Finland 5-10 years ago. Further, our estimates assume that the IPO market will gradually return in 2025-26. Due to its inherent operating leverage, we note that Inderes’ profitability should pick up rapidly once its growth starts to accelerate.

Fair value range narrows to EUR 18-19

Inderes is currently trading within our DCF valuation range. However, in a peer group comparison, we continue to think its valuation is a little rich.