elumeo SE
Original-Research: elumeo SE (von NuWays AG): BUY

Original-Research: elumeo SE – from NuWays AG

Classification of NuWays AG to elumeo SE

Company Name: elumeo SE
ISIN: DE000A11Q059

Reason for the research: Update
Recommendation: BUY
from: 11.03.2024
Target price: 5.00
Target price on sight of: 12 Monaten
Last rating change:
Analyst: Mark Schüssler

Growth avenues lead the way in 2024 and beyond

elumeo looks set to benefit from two growth initiatives in particular which
should help both top and bottom line performance going forward:

Growth avenue #1: juwelo. We currently expect much of H1’24e to be burdened
by the continued muted consumer sentiment witnessed over the last quarters,
estimating c. € 22m (eNuW) in sales for the first half of the year (flat
yoy). While customer activity should be relatively unaffected overall for
elumeo’s core platform juwelo, the mix of both products and customers will
likely reflect macroeconomic headwinds. However, whereas competitors like
Wempe overwhelmingly offer higher-priced jewelry, leading customers to
either stay or churn altogether, elumeo can prevent churn on its platform
by offering both higher- and lower-priced items and allowing customers to
simply subsititute one for the other. Thus, the average sales price is seen
to decline compared to the prior reporting period (eNuW: € 72), but the
number of items sold should steadily rise over the year to c. 645k (+2%
yoy, eNuW) as (1) the continued development of an interactive mobile
jewelry shopping app (eNuW: one-digit million figure or between c. 2-13% of
FY’23e revenue) is expected to contribute perceptibly to FY total revenue
by H2’24 and (2) AI translated automated shopping shows likely help reduce
operating costs and boost video shopping content globally, the testing of
which is still ongoing but already promising.

Growth avenue #2: jooli. The platform was launched in the Indian market to
capitalize on both lower customer acquisition costs and a trove of data
needed to enhance the app’s algorithm and features such as livestream
shopping (clips of ~20 seconds) of not only jewelry but various lifestyle
products. While first KPIs like order volume are promising, jooli’s
development is financed out of the company’s own resources and conducted
such that customer acqusition is profitable from the beginning, causing a
slower but financially healthier ramp up. Therefore, we currently do not
expect material top or bottom line contributions from jooli before 2026e
(see also our update from February 2nd). However, as the company prepares
jooli for a successful roll-out in its European markets in the mid-term,
elumeo’s core platform juwelo looks set to benefit from an eventual
recovery of the jewelry and overall e-commerce market with sales prices and
items sold likely to recover.

We reiterate our BUY rating with an unchanged PT of € 5.00 based on DCF.

You can download the research here:
http://www.more-ir.de/d/29107.pdf
For additional information visit our website
www.nuways-ag.com/research.

Contact for questions
Die Analyse oder weiterführende Informationen zu dieser können Sie hier downloaden: www.nuways-ag.com/research.
NuWays AG – Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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