Classification of GBC AG to DN Group AG

Company Name:	DN Group AG
ISIN:	DE000A3DW408
Reason for the research:	Research Note
Recommendation:	BUY
Target price:	6.85 EUR
Target price on sight of:	31.12.2027
Last rating change:
Analyst:	Cosmin Filker, Marcel Goldmann

Operational successes achieved at portfolio companies; bond issue with a volume of up to €125 million; Rating: BUY

DN Group AG has consistently realigned its business model towards impact investing since 2024. The company focuses on investments in businesses operating in future-oriented sectors such as AI, mobility, the circular economy, food, healthcare and energy, which are expected to combine economic value creation potential with a positive contribution to the environment or society. The selection of new investments is based on an Investment Framework adopted in May 2025. Under this framework, at least 80% of the investment volume is to be allocated to companies with a measurable positive impact. Potential investments are assessed against exclusion criteria, their contribution to the UN Sustainable Development Goals and as part of an ESG impact due diligence process. At the same time, DN Group aims to support its portfolio companies in their operational development and in accessing the capital markets.

Several important development milestones have been achieved within the investment portfolio in recent months. Of particular importance is the stake acquired in Algene Holding SE at the end of 2025. The transaction was structured as a share swap involving More Impact AG and therefore did not result in a cash outflow for DN Group. Algene focuses on the industrial production of microalgae, which can be used to produce proteins, fatty acids, vitamins and pigments, among other products. Following successful upscaling, series production of high-purity microalgae commenced in July 2026, with an initial harvest of 4,500 litres. Algene also received GMP certification, thereby creating important prerequisites for supplying customers in the cosmetics and food industries. In addition, preliminary results from a joint study with the Technical University of Munich indicate a potential application of spirulina microalgae as a feed ingredient in shrimp farming. Final study results are expected in November 2026.

Progress has also been made at other portfolio companies. At SW Save The Water Holding AG, in which DN Group has held a 9.5% stake since May 2025, the focus is on the market launch of the waterless soap “Soapeya”. The product received a positive Dermatest assessment and was used in a humanitarian aid deployment in Syria during summer 2026. In addition, DN Group acquired a 20% stake in WINDWISE in March 2026. The company develops base-load-optimised wind turbines based on its patented MaxCap technology and plans to build more than 100 turbines by 2030. DN Group is also providing strategic support to WINDWISE in connection with its planned conversion into a stock corporation.

The first half of 2026 was primarily characterised by the continued financing and operational development of the portfolio companies. Since the beginning of the year, DN Group has provided direct and indirect portfolio companies with loans totalling €6.73 million. At DN Group level, total income declined to €7.93 million from €13.24 million in the prior-year period, mainly due to lower income from securities disposals. Other operating income of €4.57 million included €3.61 million from the disposal of shares in Global Health Care AG. In addition, consultancy services of €2.80 million had been rendered but not yet invoiced. Due to higher bond liabilities, interest expenses increased to €3.34 million, while profit after tax declined to €0.38 million from €3.49 million in the previous year. It should be noted that DN Group’s HGB results only reflect the operating performance of the non-consolidated portfolio companies to a limited extent. Equity remained at a high level of €386.90 million.

To finance the further expansion of the portfolio, the 2026/2033 corporate bond with a total volume of up to €125 million is currently being placed. The bond carries a coupon of 10.0% p.a. In the event of a full cash placement, 85% of the net issue proceeds are intended to be invested in existing or new portfolio companies, with the remaining 15% allocated to DN Group’s working capital. This provides additional financial flexibility for the further development of the investment portfolio.

We continue to value DN Group using a NAV approach. Based on the assets reported as of 30 June 2026 and taking into account the higher level of financial debt, we derive a total NAV of €380.50 million (previously: €383.63 million), corresponding to €6.85 per share (previously: €6.90). Compared with our previous research report dated 11 June 2026, the total NAV has declined slightly due to the higher level of financial debt. Based on the current share price of €5.40, we assign a BUY rating.

You can download the research here: 20261110_DN_Note_en

Contact for questions:
GBC AG
Halderstraße 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de

++++++++++++++++
Disclosure of potential conflicts of interest pursuant to Section 85 of the German Securities Trading Act (WpHG) and Article 20 of the Market Abuse Regulation (MAR). The following potential conflict of interest exists in relation to the company analysed above: (5a,11). A list of potential conflicts of interest can be found at: https://www.gbc-ag.de/de/Offenlegung

Note on issuer-sponsored research: This research report is issuer-sponsored research and has been prepared in accordance with the EU Code of Conduct for issuer-sponsored research.
+++++++++++++++
Completion: 09.11.2026 (4:15 pm)
First distribution: 10.11.2026 (09:30 am)