CapMan - Earnings outlook still very favourable

2021 was a solid year overall
CapMan reported solid Q4 results, rounding of a year of clear earnings improvement. The operating profit amounted to EUR 12.2m, beating both our and consensus estimates (EUR 10.7m/9.4m Evli/cons.). Y/y the operating profit improved by 262%. The Management Company business saw good continued growth, aided by a ~EUR 700m net increase in AUM during 2021, with management fees surpassing EUR 10m during the last quarter. The Services business also continued good growth, with CaPS showing profitable growth and JAY Solutions profitability seen to start to pick up. The Investment business returns were strong also in the final quarter and the main driver behind CapMan’s 2021 earnings. CapMan as expected proposes a dividend of EUR 0.15 per share (0.15 Evli/cons.).

Carried interest expected to boost earnings further
We have not made any substantial revisions to our estimates post-Q4. We expect continued growth in the Management Company and Service businesses, with the former expected to pick up clearly in earnings due to carried interest as the NRE-I fund is set to enter carry and the outlook for further funds entering carry also appearing to be quite favourable. We are still somewhat cautious to investment returns compared with the strong 2021 figures but still expect to see a good level. Should the pace continue CapMan would be well set to continue on an over EUR 40m annual operating profit track excluding carry. In 2022 we expect a y/y increase in operating profit of some 30% driven largely by the expected carried interest.

BUY with a target price of EUR 3.4
Absolute valuation on our estimates is very affordable and even excl. the highly unpredictable carried interest is not too challenging. Dividend yields also continue to support the investment case. We retain our BUY-rating and TP of EUR 3.4.