Topic: After a temperate demand from customers in the last fiscal year, FY24e looks more encouraging. With several promising projects in the pipeline, signaled by a strong order intake of € 33m in the first quarter (vs. € 43m in entire FY23), we expect better results for FY24e.

Solar: In FY24e, Solar should again be the most important segment for Singulus (eNuW: € 50m; +28% yoy) thanks to a strong demand from CNBM and potential follow-up orders from Enel. Last year, Singulus already delivered five machines for Enel’s 3Sun Gigafactory in Sicilia. Currently, Enel is building another heterojunction solar panel facility in Oklahoma for c. $ 1bn supported by the IRA, which could lead to new orders in FY24e.

Hydrogen: In the field of hydrogen (part of the Semiconductor segment), Singulus is working in cooperation with Bosch on the development of coating systems for the sputtering of bipolar plates in fuel cells and electrolyzers. The first machine (eNuW: Mid. single digit € m amount) should be delivered by the end of this year. While hydrogen will play a subordinated role in the short to midterm, it could become a material portion of Singulus’ revenue in the long run.

Proposal for bond extension failed: At the second bondholder meeting on May 21, 69% of the present bondholders voted in favor of the company’s proposal to extend the € 12m bearer bonds maturing on July 22, 2026 for another three years. As 75% of the votes would have been required for approval, the proposal failed. Solvency remains a key issue for Singulus, which is highly dependent on its largest shareholder and customer CNBM, which provides direct and indirect financing for € 30m of the company’s outstanding debt.

Operating breakeven plausible: Supported by a strong order intake of € 33m in Q1 (+136% yoy) it looks plausible for Singulus to achieve breakeven in operating income for FY24e (eNuW: € 0.2m) after five years of negative EBIT (adjusted for the € 12.1m extraordinary income in FY22 from a property sale). Based on our estimates, the company has to reach close to € 100m in revenue (eNuW FY24e: € 97m) to cover its costs, which seems in reach after a good start into the year.

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