ThyssenKrupp

Yesterday, ThyssenKrupp shares declined 17% only due to the distribution of 49% of TKMS and its subsequent listing. 

The listing of TKMS (ThyssenKrupp Marine Systems) was a success and the stock initially listed at €50 rose to €100 before ending the day at €80, implying a market cap at €4bn. 

We will integrate these numbers in our SOTP and will adjust our numbers to take into account the 49% minority stake in TKMS, but we expect very little change to our numbers and a marginal drop in the target price. 

We still see substantial upside on ThyssenKrupp on the back of its fundamental value. The next key trigger will be the evolution of Steel Europe. The deal with Jundal group in India would further improve sentiment on the name. According to press rumors, the material services division could also be  IPOed soon, further transforming TK into a holding company. Now we know that holdings tend to have a subsequent discount to NAV but our SOTP stands at €15.3 per share ie offering 63% upside currently. Even with a significant discount to NAV, our expert still sees some upside on the name with expected good momentum on steel and materials.