On Friday, OHB signed two contracts, underpinning its leading space defence capabilities in Europe:

• Following the feasability study "Odin's Eye I" (worth € 8m, signed in 2021), the European Commission (EC) awarded the consortium led by OHB with "Odin's Eye II". The project is funded by the European Defence Funds with € 90m and contains the definition, development, integration and verification of the entire mission, bringing the project into the next phase. Odin's Eye should strengthen Europe's defence capabilites by serving as a space-based early warning system for intercontinental ballistic missiles. While the funding has been approved last Friday, the final contract signing should be just a formality and is excpected soon. Following a successful outcome of this second project phase, one should expect a larger follow-up order to build and realize the hardware of Odin's Eye afterwards (eNuW: not before FY25e; c. € 300m - € 1bn project volume).

• Space Norway (100 % owned by the Norwegian Ministry of Trade, Industry and Fisheries) awarded OHB with the development, manufacturing, launch and operation of the "ADIS" micro-satellite, serving as demonstrator for satellite-based Internet of Things services. While the contract volume is undisclosed, we estimate it to be around € 10-20m. The satellite is based on the proven Innosat platform, enabling a quick and cheap production of satellites; the launch is expected for 2025e.

All in all, this positive newsflows underpins OHB's strong position in Europe's defence activities in space. With SATCOMBw3 (communication satellites for German Armed Forces, eNuW: €700m - € 1bn contract volume) and IRIS2 (Infrastructure for Resilience, Interconnectivity and Security by Satellite, c. € 6bn project volume) currently in the bidding phase, more positive newsflow could come in within the next months.

OHB is too cheap to ignore. The company's listed peers are trading at 18x PER FY23e (vs. OHB at 12x). The steep undervaluation becomes even more evident when considering the recent acquisition of its unprofitable close peer Maxar Technologies (by Advent International in April 2023), which was taken over at 3.6x EV/sales FY23e (vs. OHB at 0.7x, peer group at 1.7x).

BUY with unchanged PT of € 48.00, based on DCF.