Original-Research: LION E-Mobility (von NuWays AG): Kaufen

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Original-Research: LION E-Mobility - from NuWays AG

Classification of NuWays AG to LION E-Mobility

Company Name: LION E-Mobility
ISIN: CH0560888270

Reason for the research: Update
Recommendation: Kaufen
from: 25.03.2024
Target price: EUR 8.00
Target price on sight of: 12 Monaten
Last rating change: 
Analyst: Christian Sandherr

On the road for accelerating growth; chg. est.
Topic: LION E-Mobility published its FY23 prelims and FY24 guidance. While
the latter came in below our estimates, it offers plenty of room for
upside. Valuation remains highly attractive.
FY23 revenues increased by 4% yoy to EUR 56.1m, whereas EUR 26.3m came from Q4
alone. FY EBITDA stood at EUR -0.7m; Q4 EUR -0.8m. Worth highlighting, the
operating cash flow improved strongly from EUR -6.8m in FY22 to EUR 2.1m in
FY23 (EUR 1m in Q4), which should have largely been carried by a
normalization of inventory levels. Mind you, the company build up a
stockpile of completed battery packs at the end of FY22 to service
customers throughout the transition period.
FY24 guidance points to 7-16% yoy growth (EUR 60-65m). While the growth
targets came in well below our old estimates of EUR 86m, management stretched
the conservative approach during the earnings call. With the company
significantly ramping up its sales efforts (increased headcount and trade
show appearances, from 4 to 30), strong growth ambitions from important
customers such as Karsan (electric buses and mini-buses) and plenty of
spare capacity at its production site in Hildburghausen. Further, the
company is currently active in more than 20 design-in projects, of which
some should turn into firm orders. EBITDA is seen to come in at EUR 0.5-1m
(eNuW old: EUR 1.1m)
FY25e with accelerated growth (eNuW: 34% to EUR 90m) on the back of the
partnership with SVOLT, which will allow LION to produce higher energy
density (20% more vs currently used cells) NMC and LFP battery packs from
H2 2024 onwards. The latter should turn into a notable tailwind as it
allows LION to fully break into the thriving energy storage market, which
prefers LFP over NMC cells. As a result, the share of storage sales should
exceed 50% during the next few years (FY23: 41%).
Immersion cooling progress. As highlighted during the earnings call, the
company is progressing well with the development of its immersion cooled
battery packs. Until the end of the year, LION should receive additional
feedback (so far 'promising') from the premium OEMs currently testing the
pack on the road. Note: We have currently reflected no value for LION's
immersion cooling technology in our valuation.
Reiterate BUY with a new EUR 8 PT (old: EUR 10.50) based on a sum-of-the-parts

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NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany

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The result of this research does not constitute investment advice
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