Classification of NuWays AG to Singulus Technologies AG

Company Name:	Singulus Technologies AG
ISIN:	DE000A1681X5
Reason for the research:	Update
Recommendation:	Hold
from:	06.11.2024
Target price:	EUR 1.60
Target price on sight of:	12 months
Last rating change:
Analyst:	Konstantin Völk

Mixed Q3 preview // guidance looks ambitious

Topic: Singulus will release its Q3 report on November 13th. We expect solid top-line growth and bottom-line improvement. However, to become profitable, the company still has to overcome major obstacles.

Sales should increase 49% to € 21m (eNuW) from a low comparable base due to project postponements in H2’23. We expect EBIT to come in at € -1.5m, up from € -4.5m yoy, thanks to a higher sales contribution from the more profitable Semiconductor Segment and several cost-cutting measures. With € 24.4m order intake in H1’24e (47% of total order intake), the Semiconductor segment experienced a strong demand, which should benefit gross-profit margins in the coming quarters.

Several cost saving measures in place: Already in 2022, Singulus closed the Fürstenfeldbruck site, which saves the company c. € 2m in OPEX (as stated in the Q1’23 CC). Beyond that, Singulus is relocating parts of the assembly for thin-film solar-modules to China. This will not only reduce shipping costs but also save money as several components for solar modules are cheaper in China.

Ambitious FY guidance: Singulus revised its guidance in July to € 95-105m sales (old: € 120-130m) and an EBIT in the range of € 3.0-6.5m (old: low double-digit €m). For us, the revised guidance still looks ambitious considering the current order backlog of € 70m (vs. € 67m H1’23) and the development of major projects. Hence, we expect only € 86m in sales and € -1.9m in EBIT for FY24e.
Reorganization of financing: In August, the company announced the reorganization of its € 20m loan from CNBM. Further, CNBM guarantees Singulus to cover its financial obligations until March 31st 2025. Although CNBM has made a verbal promise to provide Singulus with the necessary liquidity beyond thatdate, Singulus’ Going Concern beyond March 2025 looks still questionable and would require further improving operations in our view.

As soon as long-term financing is secured, one should refocus again on the improving operating business with new innovative product solutions, i.e. in the fields of microLED, hydrogen and solid-state batteries, which have the potential to bring Singulus back to black numbers.

We reiterate HOLD with an unchanged PT of € 1.60 based on DCF.

You can download the research here: http://www.more-ir.de/d/31191.pdf
For additional information visit our website: www.nuways-ag.com/research

Contact for questions:
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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