First Berlin – SFC Energy AG Research Update (13/02/2019)

First Berlin Equity Research has published a research update on SFC Energy AG (ISIN: DE0007568578). Analyst Dr. Karsten von Blumenthal downgraded the stock to ADD and maintained his EUR 11.20 price target.

SFC Energy reported preliminary 2018 figures that were slightly ahead of our forecasts. Revenue grew 14% y/y to €61.7m and adjusted EBIT increased to €2.6m (2017: €0.2m). SFC is guiding towards revenue growth of 9-20% (€67-74m) in 2019. Adjusted EBITDA is to increase to €4.5-7.0m and adjusted EBIT to €3.5-6.0m. This corresponds to an adjusted EBIT margin range of 5-8%. SFC is preparing strategic options to finance further growth to exploit the enormous global market potential. These options could range from gaining a new strategic investor to a capital increase. Given the difficulties the Canadian oil & gas market has faced in recent months, we lower our segment forecast for 2019E resulting in a lower forecast for the group. However, we still expect significant profitable growth for the current year. Following the recent share price increase, the stock is now almost fairly valued in our view. We thus downgrade the rating from Buy to Add. The price target remains unchanged at €11.20.