Hauck Aufhäuser initiates Grenke with 'buy', shares rise
** Shares in Grenke GLJn.DE are up 2.4% after Hauck Aufhäuser initiates the German leasing company with "buy", saying its net income looks set to grow by a double-digit percentage again after weak COVID years
** Full-amortisation contracts, meaning built-in negligible residual value risk, differentiate Grenke from other leasing companies, the brokerage says
** It says Grenke's unique selling proposition rests on an effective in-house credit scoring algorithm, highly automated processes leading to cost benefits, attractive and reliable refinancing conditions and scale benefits, among others
** "Growth should largely stem from entering new markets and an expansion of product categories, enabling new business to grow at a 14% CAGR into 2026E," it says
** New leasing business benefits from a growing market penetration, as SMEs seek to preserve cash and avoid the hassle of hardware obsolescence, it adds
** Out of six analysts that cover Grenke, five rate the stock "strong buy"/"buy" and one "strong sell" - LSEG data
Reporting by Mateusz Dobrzyniewski
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