Topic: Singulus reported uninspiring FY23 figures with top- and bottom-line below the company’s guidance and our estimates. More importantly, FY24 could feature significant sales and EBIT growth.

FY23 sales decreased 17% yoy to € 73m (eNuW: € 77m), missing the in July adjusted guidance of € 90-100m due to a cyclically weak Life Science segment and postponements of some larger projects in the Solar segment. Q4 sales came in at € 16.7m, 18% lower yoy (eNuW: € 21m). FY23 EBIT stood at € -10.1m (eNuW: € -8.9m; FY22: € 5.9m), falling short of the guidance (positive low single digit €m). FY23 order intake decreased 25% yoy to € 43m, leading to a backlog of € 55m (FY22: € 85m).

Positively, sales in the Solar segment increased 30% yoy to € 39m (eNuW: € 43m), despite the postponement of larger projects with CNBM and a customer in the US. The US business was particularly strong, benefiting from subsidies related to the inflation reduction act. The Solar segment should be a major contributor to sales growth in FY24e, due to the realization of projects with CNBM and potential follow up orders in the package. Starting from a high level in FY22, the Life Science segment showed weakness in top-line growth due to the cyclical nature of the business. Sales came in at € 23.9m, 54% lower yoy (eNuW: € 24m). The situation should remain challenging during FY24e, as the macro environment is still clouded. The Semiconductor segment saw solid sales of € 10.3m, increasing 66% yoy (eNuW: € 9.5). The outlook in the Semiconductor segment looks positive, fueled by new products in the pipeline such as in the field of μLED. By leaving the niche market and entering the larger μLED market, Singulus has a fair chance of creating enough revenue to cover its fixed costs. 

Management released a strong guidance for FY24e and expects to see € 120-130m in sales and EBIT in the low double-digit million range, implying 72% sales growth at midpoint (eNuW: € 97m sales; € -0.3m EBIT). However, the outlook appears ambitious given the reduced order backlog of € 55m (FY22: € 85m), even taken into account order intake of € 28m in Q1 as stated in the CC. Further, a challenging macro environment, uncertainty of subsidies in the Solar segment and the long lead times of the products will make it difficult to reach the top-line guidance. That said, the midterm prospects remain intact with the potential of larger orders from CNBM for CdTe thin-film modules and a fast-growing μLED business. Hence, we reiterate HOLD with an unchanged PT of € 1.60 based on DCF.