Citi upbeat on Domain Holdings Australia after Realbase deal

Domain Holdings Australia

04/04/2022 07:04

** Citi says property listing firm Domain Holdings
Australia's  DHG.AX  acquisition of Realbase increases scale of
Agent Solutions unit, and increases its reach
    ** DHG on Friday https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02505618-2A1366150?access_token=83ff96335c2d45a094df02a206a39ff4
 acquired campaign management tech platform Realbase Pty for
upfront cash of A$180 mln ($135.29 mln), plus contingent
consideration of up to A$50 mln
    ** Success of deal to be determined by whether DHG can
leverage end to end capability on agent solutions side to
increase yield of listings business, brokerage says
    ** Hikes FY23-FY24 net profit after tax estimate by 10% to
11%, reflecting impact of Realbase acquisition
    ** Citi maintains "buy" rating, but cuts price target to
A$5.85 from A$6.15 on dilution from equity raising
    ** Expects FY22 core net profit of A$60.9 mln, and for FY23
of A$75.1 mln, significantly higher than A$31.4 mln logged in
FY21
    ** Seven of 11 analysts rate the stock "buy" or higher,
three "hold" and one "strong sell"; their median PT is A$4.94 –
Refinitiv data
    ** DHG down 29% this year, as of last close, vs a flat ASX
All Ordinaries index  .AORD 

($1 = 1.3305 Australian dollars)

 (Reporting by Sameer Manekar in Bengaluru)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))