20 June 2008
German Stock Ideas
Volkswagen, K+S AG, adidas AG,
Norddeutsche Affinerie, Aixtron
Andreas Neubauer, DVFA
Head of Research
(49) 69 910 31900
andreas.neubauer@db.com
Bianca-A Berger
Research Analyst
(49) 69 910 31956
bianca-a.berger@db.com
Holger Blum, DVFA
Research Analyst
(49) 69 910 31912
holger.blum@db.com
This month we recommend being buyers of K+S AG, adidas AG, Norddeutsche
Affinerie and Aixtron, and would be sellers of Volkswagen.
Deutsche Bank AG/London
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Investors should consider this report as only a single factor in making their investment decision.
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DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1
Top Pick
Top picks
Volkswagen AG (VOWG.DE),EUR174.32 Sell
adidas AG (ADSG.DE),EUR44.73 Buy
Norddeutsche Affinerie (NAFG.DE),EUR34.55 Buy
AIXTRON (AIXG.DE),EUR8.25 Buy
K+S (SDFG.DE),EUR376.02 Buy
Companies featured
Volkswagen AG (VOWG.DE),EUR174.32 Sell
2007A 2008E 2009E
DB EPS (EUR) 10.39 11.90 11.25
P/E (x) 12.4 14.7 15.5
EV/EBITA (x) 7.8 10.0 10.4
adidas AG (ADSG.DE),EUR44.73 Buy
2007A 2008E 2009E
DB EPS (EUR) 2.56 3.04 3.58
P/E (x) 16.8 14.7 12.5
EV/EBITA (x) 10.6 9.5 7.9
Norddeutsche Affinerie (NAFG.DE),EUR34.55 Buy
2007A 2008E 2009E
DB EPS (EUR) 4.27 4.13 4.55
P/E (x) 6.0 8.4 7.6
EV/EBITA (x) 3.4 8.0 7.4
AIXTRON (AIXG.DE),EUR8.25 Buy
2007A 2008E 2009E
DB EPS (EUR) 0.19 0.37 0.52
P/E (x) 32.2 22.6 15.9
EV/EBITA (x) 23.3 14.8 9.7
K+S (SDFG.DE),EUR376.02 Buy
2007A 2008E 2009E
DB EPS (EUR) 4.25 20.75 32.48
P/E (x) 25.1 18.1 11.6
EV/EBITA (x) 18.0 13.0 8.1
Global Markets Research Company
Volkswagen
We believe that once Porsche (Hold, EUR111.6) has increased its stake to 51%, it
will likely remain at this level. As full consolidation of Volkswagen will mean that its
share price will not influence Porsche’s profitability substantially, we believe
Porsche will not see any major benefit in supporting Volkswagen shares via an
option strategy similar to the one used today. We expect 08E earnings to be the
peak as we believe the positive impetus of the product cycle will be mitigated by
adverse external conditions.
K+S AG
We recently raised our EPS forecasts for 08 and 09 by 37% and 43% in order to
reflect K+S’ recent price increases (Euro 535 cfr per ton for granular MoP in
Europe and USD 830+ cfr per ton for products delivered to international markets).
According to statistics provided by Potash Corp (NR), North American potash
producers’ inventories end-May 08 are about 50% below the average for the past
five years. This is more evidence of the global markets’ current tightness. The
stock is trading on a PE of 11.4x (09E) and generating an ROE of 76.5% (09E).
adidas AG
In our view, adidas is well positioned to exploit the long-term potential of major
emerging markets. In 2007, a quarter of sales were generated in emerging
markets. The adidas brand holds the no.1 position in Russia (market share twice as
high as Nike, according to adidas) and has recently become the no.1 brand in
China with a 22% market share (1pp ahead of Nike) while Reebok brand is the
market in India with a market share of >50%. The stock is trading on a PE of 12.4x
(2009E), a P/BV of 2.3x (2009E) and generating an ROE of 21.5% (2009E).
Norddeutsche Affinerie
After the merger, the combined NA/Cumerio Group operates a total of 12
production sites in seven countries. Globally, the merged entity holds the No. 1
position in copper processing and No. 3 position in copper production. We view
NA as an underrated equity story, and believe the acquisition of Cumerio marked
the first step in the consolidation of a fragmented global copper market. After DPS
of Euro 1.45 in FY06/07, we forecast an increase to Euro 1.50 in FY07/08E, Euro
1.65 in FY08/09E and Euro 1.70 in FY09/10E. The implied dividend yields of 4.8%,
5.0% and 5.5%, respectively, (on current share price levels) should, potentially,
provide a trading floor to the stock, in our view.
AIXTRON
Aixtron is the world leader in MOCVD equipment used in the production of LEDs.
Consumer electronic companies such as Samsung are promoting LED backlit TVs,
which offer a much brighter picture and use less energy. Additionally, as global
warming is likely to be a high profile topic for the time being, we expect ongoing
discussion concerning more energy efficient light sources. Over the last 10 years,
the shares have mostly traded on 20-30x trailing PE, and our EURO 12 target price
assumes the mid point of this range (i.e. 25x 2008e EPS).

Table of Contents
Directors’ transactions for last two months ................................... 3
Executive Summary........................................................................... 6
Valuation / Risks.............................................................................. 22
Volkswagen............................................................................................................................22
K+S AG ..................................................................................................................................22
adidas AG...............................................................................................................................22
Norddeutsche Affinerie AG.....................................................................................................22
AIXTRON................................................................................................................................22
German top picks (ToPPIX)............................................................. 23
Forecast upgrades ..................................................................................................................24
Forecast downgrades .............................................................................................................24
Recommendation changes – Upgrades ..................................................................................25
Recommendation changes – Downgrades .............................................................................25
Appendix .......................................................................................... 26
Last years’ directors transactions (covered stocks Buys only)................................................26
Last years’ director transactions (Buys only – all TecDax stocks) ...........................................33
Director dealings transactions (TecDax on a quarterly basis)..................................................36