European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

Porsche Automobil Holding  / Event-Driven

<ul>
<li>I would value Porsche on 18.9x €5.3 billion 22eEBIT, i.e. €100bn; Ferrari, which has moderately higher EBIT margins (25% vs. 16%), trades on 31.2x EV/22e EBIT (Capital IQ consensus).</li>
<li>The current discount of VW prefs to ords is 23.2%. A Porsche IPO without major changes on VW share structure, would be positive for the preference shares. Long prefs/short ords.</li>
<li>An IPO of Porsche would be beneficial for the Porsche SE shares and the current discount to NAV should tighten even more, in my view. Long 1 PAH3 GR/short 0.5136 VOW GR.</li>
</ul>


I would value Porsche on 18.9x €5.3 billion 22eEBIT, i.e. €100bn; Ferrari, which has moderately higher EBIT margins (25% vs. 16%), trades on 31.2x EV/22e EBIT (Capital IQ consensus).
The current discount of VW prefs to ords is 23.2%. A Porsche IPO without major changes on VW share structure, would be positive for the preference shares. Long prefs/short ords.
An IPO of Porsche would be beneficial for the Porsche SE shares and the current discount to NAV should tighten even more, in my view. Long 1 PAH3 GR/short 0.5136 VOW GR.


Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/volkswagen-ag" target="_blank" data-smartkarma-citation="entities:21738:1" rel="noopener">Volkswagen (VOW GR)</a> said it was in advanced talks with its controlling shareholder, the Porsche-Piëch family, over IPOing the iconic Porsche car brand.</li>
<li>VW gained as much as 10.2%, lagging <a href="https://www.smartkarma.com/entities/porsche-automobil-holding-se" target="_blank" data-smartkarma-citation="entities:21691:1" rel="noopener">Porsche Automobil Holding Se (PAH3 GR)</a>'s intra-day-high of 15.2%.</li>
<li>Proceeds from a potential IPO would ostensibly support VW's electric vehicle roll-out. But expect the founding families to be also looking to fill their boots. </li>
</ul>



Volkswagen (VOW GR) said it was in advanced talks with its controlling shareholder, the Porsche-Piëch family, over IPOing the iconic Porsche car brand.
VW gained as much as 10.2%, lagging Porsche Automobil Holding Se (PAH3 GR)'s intra-day-high of 15.2%.
Proceeds from a potential IPO would ostensibly support VW's electric vehicle roll-out. But expect the founding families to be also looking to fill their boots. 


VW Gains On Potential Porsche IPO. PAH3 Gains Even More

<ul>
<li>Spreads have generally tightened across our liquid universe, 410 bps in the case of Volkswagen. Spreads in Sixt (45.7%) and Schroders (37%) are worth mentioning.</li>
<li>Recommendations Long ords / short prefs: Fuchs Petrolub, Henkel, Handelsbanken.</li>
<li>Recommendations Long prefs / short ords: BMW, Grifols, Roche, Telecom Italia (takeover interest), Volkswagen.</li>
</ul>


Spreads have generally tightened across our liquid universe, 410 bps in the case of Volkswagen. Spreads in Sixt (45.7%) and Schroders (37%) are worth mentioning.
Recommendations Long ords / short prefs: Fuchs Petrolub, Henkel, Handelsbanken.
Recommendations Long prefs / short ords: BMW, Grifols, Roche, Telecom Italia (takeover interest), Volkswagen.


Liquid Universe of European Ordinary and Preferred Shares: February ‘22 Report

<ul>
<li>There is just one DLC in this report, Rio Tinto, following the unification of BHP and Shell.</li>
<li>Discounts to NAV of holdcos have shown mixed performance: Alba, 41.3%; GBL, 26.9%; Heineken Holdings, 18.2%; Industrivärden, 12.1%; Investor AB, 11.6%; Kinnevik B, 8.8%(premium); Porsche Automobile Holding, 39.2%.</li>
<li>Recommended trades: GBL vs. listed assets, Industrivärden vs. listed assets, Investor vs. listed assets, Porsche vs. VW (long 1 PAH3 GR/short 0.5136 VOW GR), Rio Tinto.</li>
</ul>


There is just one DLC in this report, Rio Tinto, following the unification of BHP and Shell.
Discounts to NAV of holdcos have shown mixed performance: Alba, 41.3%; GBL, 26.9%; Heineken Holdings, 18.2%; Industrivärden, 12.1%; Investor AB, 11.6%; Kinnevik B, 8.8%(premium); Porsche Automobile Holding, 39.2%.
Recommended trades: GBL vs. listed assets, Industrivärden vs. listed assets, Investor vs. listed assets, Porsche vs. VW (long 1 PAH3 GR/short 0.5136 VOW GR), Rio Tinto.


Selected European Holdcos and DLCs: January ‘22 Report

<ul>
<li>Porsche Automobil Holding Se (PAH3 GR) is a listed holding company whose main asset is a 53.3% stake of Volkswagen ordinary shares (worth c. €43,243 million).</li>
<li>The combination of holding chain and dual-class structure allows the Porsche-Piëch families to control Volkswagen with just a 15.7% economic interest. The discount of Porsche SE is a massive 38.2%.</li>
<li>The discount is above the 9-year average, 30.2%. I recommend long 1 PAH3 GR/short 0.5136 VOW GR.</li>
</ul>


Porsche Automobil Holding Se (PAH3 GR) is a listed holding company whose main asset is a 53.3% stake of Volkswagen ordinary shares (worth c. €43,243 million).
The combination of holding chain and dual-class structure allows the Porsche-Piëch families to control Volkswagen with just a 15.7% economic interest. The discount of Porsche SE is a massive 38.2%.
The discount is above the 9-year average, 30.2%. I recommend long 1 PAH3 GR/short 0.5136 VOW GR.


Porsche Automobil Holding SE: Double Discount

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)

PAR3/VOW3/Potential Porsche IPO

The valuation of Porsche OpCo could reach €100 billion, vs. a market capitalization of c. €109.4 billion of VW. This is a feasible range...

Jesus Rodriguez Aguilar

VW Gains On Potential Porsche IPO. PAH3 Gains Even More

VW's ords are now trading at a forward PER of 8.9x compared to 5.1x for the prefs. Separately, PAH3 is trading rich and is potentially an unwind...

David Blennerhassett

Liquid Universe of European Ordinary and Preferred Shares: February ‘22 Report

Spreads have generally tightened across our liquid universe, 410 bps in the case of Volkswagen. Spreads in Sixt (45.7%) and Schroders (37%) are...

Jesus Rodriguez Aguilar

Selected European Holdcos and DLCs: January ‘22 Report

Discounts to NAV of selected holdings have not shown a clear trend in January. Now there is just one DLC in this report, Rio Tinto, following the...

Jesus Rodriguez Aguilar

Porsche Automobil Holding SE: Double Discount

A holding chain and dual-class structure allows the Porsche-Piëch families to control Volkswagen with just a 15.7% economic interest. For a...

Jesus Rodriguez Aguilar

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