First Berlin – PSI AG Research Update (03/05/2021)

First Berlin Equity Research has published a research update on PSI AG (ISIN: DE000A0Z1JH9). Analyst Simon Scholes reiterated his ADD rating and increased the price target from EUR 31.00 to EUR 33.00.

Abstract
Q1/21 sales and EBIT were respectively 4.0% and 4.8% above our forecasts. Sales rose 10.3% to €56.1m (FBe: €54.0m; Q1/20: €50.9m) while EBIT came in at €4.4m (FBe: €4.2m; Q1/20: €2.5m) equivalent to a margin of 7.8% (Q1/20: 4.8%). The order intake climbed 9.4% to €105m (Q1/20: €96m). PSI has never booked a higher quarterly order intake while the EBIT margin was a record for the first quarter of the group's financial year. The improvement in order intake was driven by the Energy Management segment. As it did in Q1 last year, the PSI Metals business within the Production Management segment received a large order from the United States. However this year's order was not as valuable as the one received in Q1/20 and the segment's overall order intake fell. All segments and units reported higher sales in Q1/21, but Production Management's sales were hit hardest in the early stages of the pandemic and so the sales rebound in this segment (+22.2%) was higher than in the Energy Management segment (+1.2%). EBIT at Production Management doubled to €3.0m (Q1/20: €1.5m) helped by a high proportion of license revenue at PSI Metals while the absence of last year's restructuring charge contributed to a 42% jump in EBIT at Energy Management to €1.7m (Q1/20: €1.2m). For the current quarter PSI expect a high level of new orders at the Production Management segment and also a further increase in results, especially at Energy Management. Full year 2021 guidance for EBIT ?in excess of €20m? remains unchanged. We have revised our own EBIT forecast up from €21m to €22m on the strength of better Q1 results than we had expected. We now see fair value for the PSI share at €33.00 (previously: €31.00). The recommendation remains at Add.