Classification of GBC AG to Reply S.p.A.

Company Name:	Reply S.p.A.
ISIN:	IT0005282865
Reason for the research:	GBC Italian Champions
Recommendation:	BUY
Target price:	EUR 170.00
Target price on sight of:	31.12.2025
Last rating change:
Analyst:	Cosmin Filker, Matthias Greiffenberger, Marcel Goldmann, Marcel Schaffer, N. Ripplinger, E. Geßwein

Dear investors,

For the second year in a row, we have selected 13 Italian small and mid-caps that we consider to be particularly promising as part of GBC’s “Italian Champions” study. As in the previous year, our selection is highly diversified across a range of sectors and covers a broad spectrum of market capitalisations, ranging from €32 million to €5.3 bn. Eight companies from last year's study have been included in this year's selection, leaving us with five new investment ideas.

Over the past twelve months, the fundamental market environment for German equities has deteriorated even further, which is why we are more convinced than ever that it can be worthwhile to look across the border. One trend cannot be overlooked: the capital market no longer seems to be an attractive option for German companies. On the contrary, the easy option of delisting has led to a decline in the number of listed companies in recent years. By contrast, a look at the Milan stock exchange and, thus, the Italian capital market shows a completely opposite development. While a total of 18 companies were listed on the Milan stock exchange in 2023, only three IPOs took place in Germany.

The greater willingness of Italian companies to go public is likely due, among other things, to structural advantages. These include, for example, multiple voting rights, which enable better control of the founders and good takeover protection. For medium-sized companies in particular, this is a good argument in favour of a capital market orientation. In addition, issuers can benefit from tax advantages when going public. The high value placed on equities can also be seen from the planned investment initiative Fondo Nazionale Strategico. A total of € 1.0 billion is to be invested in a targeted manner in medium-sized and smaller Italian companies under a new fund of funds proposed by the state investment bank Cassa Depositi e Prestiti (CDP). Even though the fund is aimed at institutional investors and qualified private investors, it is expected that the increased market liquidity and the generally higher demand for ‘second-tier’ stocks could prove to be a price driver for these stocks.

Which is why, on the following pages, we would like to present you, dear investor, with the GBC-Best of Italy 2024 selection. A series of promising companies from a variety of sectors with attractive valuations that, in our view, could be an attractive addition to a portfolio.

B&C Speakers S.p.A. (ISIN: IT0001268561)
Banca Ifis Group (ISIN: IT0003188064)
Cembre S.p.A. (ISIN: IT0001128047)
Energy S.p.A (ISIN: IT0005500712)
Franchetti S.p.A. (ISIN: IT0005508574)
IDNNT SA (ISIN: CH1118852594)
Lindbergh S.p.A. (ISIN: IT0005469272)
Redfish S.p.A. (ISIN: IT0005549354)
Reply S.p.A. (ISIN: IT0005282865)
Sanlorenzo S.p.A. (ISIN: IT0003549422)
Solid World Group S.p.A. (ISIN: IT0005497893)
Somec S.p.A. (ISIN: IT0005329815)
Zignago Vetro S.p.A. (ISIN: IT0004171440)

We wish you an exciting read and successful investments,

Cosmin Filker
Deputy Chief Analyst

You can download the research here: http://www.more-ir.de/d/31283.pdf

Contact for questions:
GBC AG
Halderstraße 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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Disclosure of potential conflicts of interest in accordance with Section 85 WpHG and Art. 20 MAR The following potential conflict of interest exists at the company analysed above: (see individual studies); a catalogue of potential conflicts of interest can be found at:

https://www.gbc-ag.de/de/Offenlegung
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Editorial deadline: 04.11.2024
Date and time of completion of the report: 11.11.2024 (3:09 pm)
Date and time of the first disclosure of the research report: 12.11.2024 (11:00 am)