Topic: Singulus released its final Q2 report yesterday in line with preliminary numbers. Even more importantly, the company has successfully concluded an agreement with CNBM on the restructuring of the financing in August 2024.

To recap: Q2 sales decreased by 21% to € 20.1m from a high comparable base. Thanks to a stronger contribution of the Semiconductor segment, the Q2 gross profit margin increased to 33.8% (Q2’23: 25.2%). OPEX remained roughly on last year’s level, leading to a Q2 EBIT of € 0.5m, up from € 0.2m in Q2’23. Order intake stood at a solid € 19.1m (+91% yoy), but was below our expectations after the dynamic demand in the first quarter. H1 order intake came in at € 52.3m (+117% yoy), leading to € 70.4m in order backlog.

Sales in the Semiconductor segment increased to € 3.7m (Q2’23: € 2.1m) due to a strong demand for TIMARIS coating machines. Semiconductor order intake came in at a solid € 24.4m in H1’24 (47% of total H1 order intake), which should lead to a positive effect on gross margins in the future. Solar sales decreased 22% to € 12.3m due to project postponements. However, CNBM is further investing in CdTe and as stated in the CC, more CSS machines will be delivered to CNBM in the near future. Life Science sales came in at € 4.1m (Q2’23: € 7.5m).

Reorganization of financing completed: CNBM is directly and indirectly the counterpart for € 30m of Singulus’ outstanding debt – directly as provider of a € 20m loan, granted in two tranches in March and April 2023 that were callable on August 4^th and on September 28^th and indirectly as guarantor for another € 10m granted by Bank of Shanghai. In order to secure further financing, Singulus has now successfully negotiated the reorganization of the € 20m loan. Further, CNBM guarantees Singulus to cover its financial obligations until March 31^st 2025. Nevertheless, 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 such as in the field of micro-LED, hydrogen and solid-state batteries, which have the potential to bring Singulus back in the black.

We change our rating to Hold (old: Under Review) with a PT of € 1.60 based on DCF.