YB new stock pitches (Thu, Feb 19)

Viromed Medical AG (VME.DE), a German medtech company, has developed PulmoPlast, a device using cold atmospheric plasma to kill antibiotic-resistant bacteria in lungs, addressing hospital-acquired pneumonias like VAP that cost $24,000-$40,000 per infection. A February 12, 2026 study by Prof. Dr. Hortense Slevogt at Hannover Medical School validated the technology's efficacy and safety, demonstrating it destroys bacterial strains including MRSA without damaging human cells, establishing a clear 'therapeutic window.' The company operates a razor-blade business model with recurring high-margin consumable sales and projects revenue growth from €1.4 million in 2024 to €80 million in 2026 according to mwb research analysts. The total addressable market includes 216,000 hospitals globally by 2026, with Germany alone representing a €150 million market and potential for 1,000 devices worth €15 million domestically, while 30-45 million ventilated patients worldwide annually represent the target patient population, with 36% developing VAP. Viromed has secured exclusive contracts including a deal with UMECO Group for Asia expected to generate over €150 million by 2028 and is pursuing final ex vivo validation with Saarland University within 2-3 months before applying for BfArM special approval in autumn 2025. The stock currently trades at €6.35 with a price target of €18.4 (+190% upside) over three years based on a fair P/E ratio of 25.8 versus the current 10x P/E, positioning the company as undervalued ahead of its commercial scaling phase.

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Huntington Ingalls Industries (HII), America's largest military shipbuilder and sole builder of nuclear-powered aircraft carriers, also constructs Columbia-class and Virginia-class nuclear submarines, destroyers, and amphibious assault ships that form the backbone of U.S. naval power. The company's investment thesis centers on escalating China-Taiwan tensions in the Taiwan Strait, where any conflict would be fought at sea, requiring the exact platforms HII builds: carriers (7-year build time), submarines (5-7 years), and surface combatants, locking in decade-long revenue streams due to the 5-10 year construction timelines. China now operates the world's largest naval fleet by hull count, forcing the undersized U.S. Navy into a sustained rearmament cycle, with HII holding a near-monopoly on nuclear-powered platforms making it irreplaceable in naval expansion efforts. Trump's Executive Order 14269 issued in April 2025 on 'Restoring America's Maritime Dominance' and the follow-on Maritime Action Plan from February 2026 specifically target countering China and rebuilding U.S. shipbuilding capacity, directly benefiting HII. The company maintains a massive backlog of approximately $53-57 billion with improving margins, steady revenue visibility, and reliable cash flow extending years into the future, positioning it as the primary beneficiary of the naval arms race driven by great power competition in the Pacific.

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Viceroy Research reversed its stance on Aroundtown SA (AT1.DE) from potential short to long position, with a 94% base case upside, after conducting a full investigation that debunked all prevailing short theses. The stock trades at approximately 0.36x NAV versus a peer average of 0.70x, creating a 94% base case upside opportunity, with bear case upside of 41% at 0.47x NAV and bull case upside of 154% at 0.92x NAV. Viceroy's independent bottom-up valuation of the portfolio yielded €28.4 billion, exceeding Aroundtown's reported €25 billion book value by 12%, with the hotel portfolio valued at €6.5-6.7 billion versus reported €5.37 billion, office at €9.4 billion versus €8.3 billion, residential at €8.8 billion versus €8.1 billion, retail at €1.43 billion versus €1.15 billion, and logistics at €546 million versus €414 million. The company generates €300 million in after-tax cash earnings trading at sub-10x P/E, maintains 3.8x interest coverage (2.0x including perpetual notes), operates at 57% EPRA LTV with investment-grade rating, and has disposed of approximately €10 billion of properties at book value since 2020 while net debt is declining. Every short thesis was debunked: allegations of vacancy misreporting are false as the 800ksqm of Immobilienscout24 listings primarily represent development properties already disclosed separately with 90% vacancy in the Development & Invest portfolio; claims of related party transactions with LRC, GCH, and Mindspace do not constitute round-tripping as transactions were conducted at arm's length and collectively represent less than 5% of lettable area; tenant insolvency concerns are exaggerated as 'balance sheet insolvencies' stem from standard shareholder loans used for profit extraction; and vendor financing represents only €30 million outstanding of €10 billion total disposals with less than €300 million converted to properties. The portfolio benefits from structural tailwinds including 26% reversionary rent potential, European real estate market rebound with transaction volumes increasing rapidly, supply-constrained markets particularly in German residential (68% of residential portfolio) with persistent housing undersupply, office portfolio concentrated in prime locations in Berlin, Munich, Frankfurt, and Amsterdam where demand remains strong for ESG-compliant space, hotel portfolio leased to internationally recognized brands including Center Parcs (25%), Marriott (16%), and Hilton (10%) with 12.7-year WALT and 4.2% like-for-like rental growth in 9M 2025, and grocery-anchored retail positioning in resilient essential goods segment. Management has engaged in €250 million of unlevered buybacks and should aggressively expand this program via asset disposals or modest leverage increases, as at current prices €1 of AT1 exposure purchases €2.7 of unencumbered performing assets, and the company has capacity to borrow approximately €1 billion without tripping S&P's 60% debt-to-debt-plus-equity rating threshold (currently at 51%), potentially repurchasing 33% of float and creating 153% upside through buybacks combined with re-rating. Key risks include the small cap status, emerging market discount, complex capital structure with perpetual notes, and potential for further European real estate market deterioration, though observable data shows hotel RevPAR growth of 3.1% year-on-year, office markets stabilizing with prime yields at 4.4-4.9%, and residential benefiting from structural undersupply with new supply growth slowing to 0.5% per annum through 2030 versus historical 1.3%.

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