Last week, SINGULUS entered into an agreement to receive financing of up to € 20m for the next 18 months from undisclosed creditors. The company already received cash inflow of € 9.6m as the first tranche out of this credit line. This news is long awaited and excellent, as it increases the likelihood that KPMG will finally audit the 2020 and 2021 numbers. The cash should also allow SINGULUS to execute on the FY22 order backlog of € 57m and management’s expected FY23 order intake of € 50-100m.

Our takeaways:

• SING songs of hope. To receive KPMG’s unqualified audit opinion on 2020 and 2021 accounts, SINGULUS needs ‘sufficient liquidity at hand’ – enough funds for the next 24 months. The new financing of € 20m – of which € 9.6m are already in SINGULUS’ bank accounts – should provide SINGULUS sufficient liquidity to be deemed as a going concern, in our view. A 30% yoy FY22 topline growth, being in the epicenter of the solar revolution, and a good visibility on H1 ’23 order intake – all should have contributed towards convincing the creditors of SINGULUS’ creditworthiness.
• Realization of large orders within reach. By H1 ’23, SINGULUS expects to receive an order from an existing customer (eNuW: ENEL € 20-30m). The Semi order intake in H1 ‘23 is targeted at € 10-20m while the total order intake for FY23 is expected at € 50-100m. The new inflow of cash from the financing should improve SINGULUS’ financial position to successfully execute on these projects as well as the backlog.

We consider the financing news a game changer and potential share price catalyst as it should provide the necessary cash runway required by KPMG to finally issue an unqualified audit opinion on 2020 and 2021 numbers. Indeed, we find it likely that the audits will materialize by mid-March, and the focus thereafter to shift back to fundamentals, likely driving a re-rating of the shares.

We keep the stock under review until KPMG approves the accounts.