康蒂泰克资产出售，康蒂股份转型轮胎纯玩股估值更新

Price Target ChangeHarry Martin, CFA+44 20 7676 8965harry.martin@bernsteinsg.com Stephen Reitman+44 20 7762 5535stephen.reitman@bernsteinsg.com Gali Salvatorelli Naraghi+44 20 7676 6741gali.salvatorelli-naraghi@bernsteinsg.com Price Target Specialist Sales 73.00 EUR(66.00OLD) James Brady+44 20 7762 5272james.brady@bernsteinsg.com Continental: Road to tyre pureplay almost complete - ContiTechsale agreed at €4bn On Friday Continental announced it has agreed to sell the for sale ContiTech segment toLone Star Funds for a €4bn enterprise value, and also that it expects to return €2.5bn toshareholders through a special dividend and possibly combined with a share buyback. Thisprice is better than our SOTP value of €3.3bn, and while initial investor expectations extendedup to €5bn, is close to the existing buyside consensus as we understand. Updating valuationincreases our TP to €73, 4% below Friday’s close which again supports our view there islimited upside with the RemainCo tyre asset already trading at a premium to peers. ContiTech sale agreed at €4bn EV.Following headlines in the press on Friday afternoon,Continental issued a press release on Saturday confirming the agreement to sell ContiTechto Lone Star Funds for €4bn enterprise value. There is potentially a further €250m ifperformance earnouts are hit, and will generate initial cash proceeds of €3.1bn on closingafter accounting for the lease/pension debt in the entity. This will allow Continental topropose a special dividend and potentially share buybacks, expected to be ~€2.5bn (16%of today’s market cap). With the deal likely to close around YE 2026 provided all approvalsare met, and board approval needed for this size of cash return at a general meeting, cashreturns will most likely start in H2 2027. Now a tyre pureplay - our investment thesis.As a pureplay tyremaker, Continental is anattractive asset with ~80% exposure to the consumer tyre segment and above average (butno longer industry leading) margins. It is more EU exposed than Michelin which skews moreto the US, and historically has achieved strong cash generation and ROIC thanks to a veryefficient production footprint. In our view its lower premium mix and historically volume-focused expansion model means lower pricing power than peers which has contributed tomaterial margin decline since 2017, a period where industry volumes have shrunk and rawmaterial inflation has accelerated. At today’s share price the RemainCo is valued at ~8x EBIT,a small premium to Michelin which in our view looks fair. Investment Implications We update our SOTP valuation for the agreed ContiTech sale price which increases our TP, DETAILS We update our SOTP valuation increasing the ContiTech segment to €4bn in-line with the agreed sale price (previously €3.3bn),and continue to value the tyre segment at 8.1x EBIT. Overall our TP increases to €73 vs €66 previously. Changes to model Continental also hosted a briefing call with analysts last week (see our write up here) ahead of Q2 reporting where it gave anupdated outlook on current trading. We incorporate these changes into our forecasts as well as refreshing FX rates, with overallvery limited changes to our FY expectations. APPENDIX - FINANCIAL FORECASTS BERNSTEIN TICKER TABLE I. REQUIRED DISCLOSURES References to "Bernstein" or the “Firm” in these disclosures relate to the following entities: Bernstein Institutional Services LLC(April 1, 2024 onwards), Sanford C. Bernstein & Co., LLC (pre April 1, 2024), Bernstein Autonomous LLP, BSG France S.A. (April 1,2024 onwards), Sanford C. Bernstein (Hong Kong) Limited盛博香港有限公司,Sanford C. Bernstein (Canada) Limited, SanfordC. Bernstein (India) Private Limited (SEBI registration no. INH000006378), Sanford C. Bernstein (Singapore) Private Limited,Sanford C. Bernstein Japan KK(サンフォード・C・バーンスタイン株式会社)and analysts employed by Société GénéraleAfrica Technologies & Services to produce Bernstein research under a Global Services Agreement in place between Bernsteinand Société Générale. Bernstein is part of a joint venture between Société Générale (SG) and AllianceBernstein, L.P. (AB). Unless specifically notedotherwise, for purposes of these disclosures, references to Bernstein’s “affiliates” relate to both SG and AB and their respectiveaffiliates. VALUATION METHODOLOGY Continental AG We value Continental on a SOTP. For the RemainCo, we put the Tyre business on 8.1x EV/EBIT, at a premium to Michelin based onhigher margin expectations. We value the ContiTech business at €4bn which is the agreed sale price announced in July 2026, andthe Central/HQ at the average RemainCo multiple. Together, these give our €73 target price. RISKS Continental AG Upside risks to our price target include 1) The planned sale of the ContiTech unit attracts higher multiples than embedded SOTPscontain today; 2) Tyre margins return to industry leading levels and allow substantial increase in shareholder cash returns. Downside risks to our target