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We are downgrading our stance from a Buy to a Hold on MIDI plc (“MIDI” or the “Group”) with a 12-month price target of €0.60 from our previous target of €0.81. The element of funding risk concerning the Manoel Island development has significantly increased following the issuance of MIDI’s company announcement, stating that the discussions between MIDI and Tumas Group Company Limited in connection with developing the whole project have ceased. In order to reflect such elevated level of risk, while also factoring in for any potential construction delays, we have increased the discount rate implemented in our valuation model on the Manoel Island project to 45% from the previously utilised discount rate of 30%. The applied discount rate also caters for a potential downturn in the real estate industry in Malta. We now value the project at €78.2 million, equivalent to €0.37 per share, from our previous estimate of €120.9 million or €0.56 per share. Click HERE

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