First Berlin – SFC Energy AG Research Update (15/12/2017)

First Berlin Equity Research has published a research update on SFC Energy AG (ISIN: DE0007568578). Analyst Dr. Karsten von Blumenthal reiterated his ADD rating and increased the price target from EUR 4.60 to EUR 7.70.

Abstract
SFC Energy has received a large order from the German Army. With a volume of €3.6m, this is one of the largest single orders in the history of the company. Delivery is slated for Q1/18 and will significantly boost growth and profitability in 2018. In the coming years, SFC will benefit from two structural demand trends. In the Security & Industry segment, demand for secure and sustainable off-grid energy solutions looks set to rise significantly, especially in the defence business, which offers high margins. The same is valid for the Oil & Gas segment, as long as the oil price remains above $50 per barrel. In our view, this means that from 2018E onwards, SFC will be a profitable growth company. For 2018E & 2019E, we forecast sales growth of 20.5% and 16.1%, respectively. We expect positive EBIT margins of 4.0% and 6.5%, which results in diluted EPS of €0.13 and €0.36, respectively. We have significantly increased our forecasts. Our new price target is €7.70 (previously: €4.60). We reiterate our Add rating.