<p>We believe that German direct banking<br/>and online brokerage remains a<br/>promising growth market<br/>􀀗 Trading activity has risen from its lows,<br/>but is still far from peak levels<br/>􀀗 We initiate coverage of DAB bank with<br/>an Overweight rating and target price of<br/>EUR7.7 and reiterate our Overweight<br/>rating on comdirect bank, with a<br/>reduced target price of EUR11.0<br/>Online brokerage remains a growth market<br/>We believe that online banking and brokerage remains a growth<br/>market in Germany as the secular growth trends continue: a<br/>high number of internet users, increasing need for self-financed<br/>retirement provision and consumers’ price consciousness.<br/>Trading activity far from peak level<br/>The trading activity at both comdirect and DAB bank shows<br/>some volatility in the quarterly numbers. However, the annual<br/>figures indicate that the upward trend is continuing after the<br/>deep plunge in activity in 2003 and 2004 despite the recent<br/>pullback. However, we are still far from the peak level of 2000.<br/>Shift in market shares<br/>Looking at the German online brokerage market, we still see<br/>some movements in market shares. In terms of customer<br/>numbers, DAB bank is the clear overall market leader.<br/>comdirect bank is the market leader in the B2C segment.<br/>Attractive valuations and high dividend yields<br/>At current valuations, both DAB and comdirect offer good<br/>upside potential to our fundamental target prices and also<br/>offer high dividend yields. We therefore initiate coverage of<br/>DAB bank with an Overweight rating and reiterate our<br/>Overweight rating on comdirect. DAB bank is our top pick.</p><p>目录</p><p>German online brokers 3<br/>Growing in a growth market 3<br/>Secular growth trends intact 3<br/>Trading activity far from peak levels 6<br/>Shifts in market shares 7<br/>Relative valuations 9<br/>comdirect bank 10<br/>Investment case 10<br/>Earnings drivers 10<br/>Changes to our forecasts following Q2 results 11<br/>Short-term outlook still good 12<br/>Where we differ from consensus 12<br/>Valuation 13<br/>Investment risks 13<br/>Financials & valuation: 16<br/>DAB bank 17<br/>Investment case 17<br/>Earnings drivers 18<br/>Short and medium-term outlook 20<br/>Where do we differ from consensus? 20<br/>Valuation 21<br/>Investment risks 21<br/>Financials & valuation: 24<br/>Disclosure appendix 28<br/>Disclaimer 31<br/>Contents </p><p></p><p> <br/></p><p></p>