A unique piece of uncut diamond

Written by the Apostle Menthos

These two institutional gems, with continued growth and activity in sectors that are expected to move strongly to the upside in the coming years due to high demand for the products they offer, are currently lagging significantly behind the rest of the market giving their shares strong buy incentives with current year target prices exceeding +35%. To +45% in percentage terms.

I’m referring to Austriacard Holdings (ACAG) and Interlife (INLIF), which at their current share prices are underperforming year-to-date at -2% while the market and overall index are up +12%.

These two companies are unique listed companies, offering the possibility of investing in highly developed sectors such as Austracard Holdings’ trifecta: cybersecurity, personalization and digitalization, while for Interlife the domestic insurance market is expected to catch fire in the coming years and it is enough in Last to mention that the total domestic production of insurance premiums for the year 2023 amounted to 5.27 billion euros and with an annual increase of +8.9% to be able to catch up with the average per inhabitant in the European Union. It should at least triple. Just imagine that for general insurance, while a Greek pays 180 euros, a European pays 1,103 euros. And I’m not talking about motor liability where most of us think the growth margin is not that explosive, but about other insurances where it can increase the profitability of insurers and of course the very growing Interlife.

So let’s start with it Austriacard HoldingsThe latest step to increase the group’s free float is more than positive for the group’s further upward trajectory. Thus, through accelerated book building, more than 15% of Austriacard’s total capital has been awarded to private investors. It is almost certain that after completing the “placement” of stocks in the respective portfolios, the stock’s movement will be strongly upward. After all, we saw something similar a few days ago in Helleniq Energy (ELPE) after private investors floated at €7.

Schematically, the stock is calculated days before the upward journey from a narrow volatility frame between 6.80 and 6 euros. The initial impetus for the upward movement will be given by the upward melting of the area from 6.70 to 6.80 EUR. An upward journey will lead to the first target of €7.70 and then to the second target of €8.40, or +35% from last Thursday’s levels.

Regarding the group’s financial statements, we have also mentioned in previous analyzes that it needs special attention in the next three years as its revenues and profit margin are expected to increase significantly due to the great opening-up it is undertaking at the local level as well. Like international digitization projects, this is also due to increased revenues from Austriacard’s expertise in areas such as payment and identification solutions, smart cards, card personalization and secure data management for companies in the financial sector in the private and public sector.

I keep going with it Interlife It has an amazing ability to grow its financial numbers more and more year after year.

It is growing in terms of its total assets, now exceeding €306 million in 2023, thus achieving an increase of +12.77% compared to 2022, while if we go back six years to 2017, this increase is close to +65%. Overall, the average annual increase was +10.84%

It is growing in terms of insurance revenues, closing with an increase of +11.45% to 88.56 million euros compared to 79.45 million euros in 2022, while this increase is close to +50% compared to 2017 and then revenues of 59 million euros. Average annual growth +8.4%.

It is growing in equity as it closed 2023 at €131 million or €7.06 per share up 9.61% from 2022. Imagine that in 2017 Interlife had equity of just €69 million giving an increase in six years of +90 % or an average annual growth of +15% (!).

It is also growing in terms of its net profitability, bringing in €13.7 million to its shareholders, whereas a few years ago it was generating €6.73 million. In other words, we are talking about something more than double. At the same time, it will pay a dividend of €0.16 per share for 2023, an amount that is 33.33% higher compared to the 2022 dividend.

It seems that the matter will not stop here, as it recorded an increase in premium production by 7.94% in the first quarter of 2024, which strengthens its position in the insurance market. In fact, the group has also made a full-year target assessment that total premium production will exceed €100 million.

Moving forward, Interlife Properties, the group’s investment property management company, is of particular interest with a fair value of €28.23 million. So it seems that the company in question has collected in 2023 as income from real estate rentals the amount of 901 thousand euros from 825 thousand euros in 2022. Within the real estate portfolio there are also the three hotels in Rhodes which, by the way, this year is expected to break the tourism record as The number of air arrivals in January-March is 73% higher than in the corresponding period last year. The value of these hotels was used at 9.3 million euros. In March 2024, the group purchased a fourth hotel in the heart of Rhodes, “Elite”.

Now, considering all of the above, from almost two decades of continuous year-on-year growth in revenue and profitability, to the strategic tourism opening up in one of the most prominent international tourism destinations, I really don’t know how the group is still on the right track. A board of directors with a market value of 92.8 million euros or 5 euros per share, while at least according to the results of 2023, not 2024, it should reach 135 million euros or 7.27 euros (+45%).

However, you should be aware that according to the premiums paid by buyers in previous acquisitions of insurance groups, the price will be much higher than 8 euros.

Graphically, the recent rise between EUR 5.30 and EUR 4.80 carries strong internal indicators indicating preparation for a strong upward swing above EUR 6.10.

* Apostolos Manthos is responsible for technical analysis and investment strategy