European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

Porsche Automobil Holding  / Event-Driven

<ul>
<li>Porsche SE, a holding company, controls 53.3% of Volkswagen (VW) and 25% (+1 share) of Porsche AG, leveraging a dual-class share structure to consolidate control with minimal economic stakes.</li>
<li>Net debt of €5.16 billion, accrued from the Porsche AG stake acquisition, relies heavily on VW and Porsche AG dividends for debt servicing, with CF uncertainties tied to VW's restructuring.</li>
<li>Porsche SE trades at a 31.8% discount to NAV, reflecting legal liabilities, debt reduction priorities, and holding structure complexities, but this discount could tighten to 20% as risks subside.</li>
</ul>


Porsche SE, a holding company, controls 53.3% of Volkswagen (VW) and 25% (+1 share) of Porsche AG, leveraging a dual-class share structure to consolidate control with minimal economic stakes.
Net debt of €5.16 billion, accrued from the Porsche AG stake acquisition, relies heavily on VW and Porsche AG dividends for debt servicing, with CF uncertainties tied to VW's restructuring.
Porsche SE trades at a 31.8% discount to NAV, reflecting legal liabilities, debt reduction priorities, and holding structure complexities, but this discount could tighten to 20% as risks subside.


High Conviction 2025: Porsche's SE Discount to NAV Reduction

<ul>
<li>Discounts to NAV of covered holdcos mainly widened during November. Discounts to NAV: C.F.Alba, 49.8% (vs. 48.7% as of 29 November); GBL, 40.6% (vs. 40.9%); Heineken Holding, 14.4% (vs. 14%); </li>
<li>Industrivärden C, 4.0% (vs. 2.4%); Investor B, 4.3% (vs. 2.8%); Porsche Automobile Holding, 29.8% (vs. 31.7%). Rio DLC spread tightened to 22.4% (vs. 22.5%).</li>
<li>What seems interesting (unchanged views): Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).</li>
</ul>


Discounts to NAV of covered holdcos mainly widened during November. Discounts to NAV: C.F.Alba, 49.8% (vs. 48.7% as of 29 November); GBL, 40.6% (vs. 40.9%); Heineken Holding, 14.4% (vs. 14%); 
Industrivärden C, 4.0% (vs. 2.4%); Investor B, 4.3% (vs. 2.8%); Porsche Automobile Holding, 29.8% (vs. 31.7%). Rio DLC spread tightened to 22.4% (vs. 22.5%).
What seems interesting (unchanged views): Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).


Selected European HoldCos and DLC: November'24 Report

<ul>
<li>Porsche SE is trading at a 35.3% discount to NAV, vs. 32.4% long-term average, implying a 68% probability that Porsche SE will be liable for c. €6.5 billion legal claims.</li>
<li>I think this is too harsh. Shares are trading at a Fwd P/E of 2.5x and a dividend yield of 7.8%, which I consider very attractive. </li>
<li>Porsche SE presents an attractive opportunity to gain exposure to Volkswagen and Porsche AG. Porsche SE is focusing on deleveraging which should drive a reduction in the discount.</li>
</ul>


Porsche SE is trading at a 35.3% discount to NAV, vs. 32.4% long-term average, implying a 68% probability that Porsche SE will be liable for c. €6.5 billion legal claims.
I think this is too harsh. Shares are trading at a Fwd P/E of 2.5x and a dividend yield of 7.8%, which I consider very attractive. 
Porsche SE presents an attractive opportunity to gain exposure to Volkswagen and Porsche AG. Porsche SE is focusing on deleveraging which should drive a reduction in the discount.


Porsche Automobile Holding: H1, Model Update, Discount to NAV

<ul>
<li>Net debt improved by around €1 billion to c. €5.8 billion. Prioritising deleveraging and allocations to new venture investments over dividends seem to have a negative impact on valuation.</li>
<li>Porsche SE is viewed as a holding company of Volkswagen Group, which should warrant a discount of 15%-25% on the stock, instead of the massive 44.6% discount to NAV.</li>
<li>Assuming a typical company holding discount of 15-25% range, the current share price indicates Porsche SE is liable for the whole c. €6.5 billion legal claims.</li>
</ul>


Net debt improved by around €1 billion to c. €5.8 billion. Prioritising deleveraging and allocations to new venture investments over dividends seem to have a negative impact on valuation.
Porsche SE is viewed as a holding company of Volkswagen Group, which should warrant a discount of 15%-25% on the stock, instead of the massive 44.6% discount to NAV.
Assuming a typical company holding discount of 15-25% range, the current share price indicates Porsche SE is liable for the whole c. €6.5 billion legal claims.


Preference for Deleveraging, Model Update

<ul>
<li>The Discounts to NAV of covered holdcos have mainly widened during February. Discounts to NAV: C.F.Alba, 47.1% (vs. 47.5%); GBL, 37.7% vs. (37.1%); Heineken Holding, 16.5% (vs. 16.6%); </li>
<li>Industrivärden C, 4.4% (vs. 3.8%); Investor B, 5.6% (vs. 7.9%); Porsche Automobile Holding, 43.7% (vs. 42%). The spread of Rio DLC widened to 25.6% (vs. 25.2%).</li>
<li>What seems interesting: Porsche SE/vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).</li>
</ul>


The Discounts to NAV of covered holdcos have mainly widened during February. Discounts to NAV: C.F.Alba, 47.1% (vs. 47.5%); GBL, 37.7% vs. (37.1%); Heineken Holding, 16.5% (vs. 16.6%); 
Industrivärden C, 4.4% (vs. 3.8%); Investor B, 5.6% (vs. 7.9%); Porsche Automobile Holding, 43.7% (vs. 42%). The spread of Rio DLC widened to 25.6% (vs. 25.2%).
What seems interesting: Porsche SE/vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).


Selected European HoldCos and DLC: February’24 Report

Germany

Porsche Automobil Holding SE is a holding company. The Company, through its subsidiaries, offers development, production, and sale of automobiles along with financial services. Porsche operates worldwide.

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Porsche Automobil Holding (PAH3 GR)

High Conviction 2025: Porsche's SE Discount to NAV Reduction

Porsche SE is currently trading at a 31.8% discount to NAV. The discount will continue to tighten toward approximately 20% as legal claim risks...

Jesus Rodriguez Aguilar

Selected European HoldCos and DLC: November'24 Report

Discounts to NAV of covered European holdcos mainly widened during November. What seems interesting (unchanged views): Porsche SE vs. listed assets...

Jesus Rodriguez Aguilar

Porsche Automobile Holding: H1, Model Update, Discount to NAV

Porsche SE is trading at a 35.3% discount to NAV, vs. 32.4% long-term average, implying a 68% probability that Porsche SE will be liable for c....

Jesus Rodriguez Aguilar

Preference for Deleveraging, Model Update

Porsche SE's focus on reducing debt and investing in new ventures impacts valuation, leading to a significant discount on stock price compared to...

Jesus Rodriguez Aguilar

Selected European HoldCos and DLC: February’24 Report

Discounts to NAV of covered holdcos mainly widened in February. What seems interesting: Porsche SE/vs. listed assets and the Rio DLC (long RIO LN...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

High Conviction 2025: Porsche's SE Discount to NAV Reduction

Porsche SE is currently trading at a 31.8% discount to NAV. The discount will continue to tighten toward approximately 20% as legal claim risks...

Jesus Rodriguez Aguilar

Selected European HoldCos and DLC: November'24 Report

Discounts to NAV of covered European holdcos mainly widened during November. What seems interesting (unchanged views): Porsche SE vs. listed assets...

Jesus Rodriguez Aguilar

Porsche Automobile Holding: H1, Model Update, Discount to NAV

Porsche SE is trading at a 35.3% discount to NAV, vs. 32.4% long-term average, implying a 68% probability that Porsche SE will be liable for c....

Jesus Rodriguez Aguilar

Preference for Deleveraging, Model Update

​Porsche SE's focus on reducing debt and investing in new ventures impacts valuation, leading to a significant discount on stock price compared to...

Jesus Rodriguez Aguilar

Selected European HoldCos and DLC: February’24 Report

​Discounts to NAV of covered holdcos mainly widened in February. What seems interesting: Porsche SE/vs. listed assets and the Rio DLC (long RIO LN...

Jesus Rodriguez Aguilar

Porsche SE's focus on reducing debt and investing in new ventures impacts valuation, leading to a significant discount on stock price compared to...

Discounts to NAV of covered holdcos mainly widened in February. What seems interesting: Porsche SE/vs. listed assets and the Rio DLC (long RIO LN...