First Berlin – SFC Energy AG Research Update (18/11/2020)

First Berlin Equity Research has published a research update on SFC Energy AG (ISIN: DE0007568578). Analyst Dr. Karsten von Blumenthal upgraded the stock to ADD and increased the price target from EUR 14.00 to EUR 15.80.

SFC Energy reported 9M figures and held a conference call. Despite a 10% decline in Q3 revenue to €11.5m, EBIT (€0.6m) and the net result (€0.4m) were slightly positive due to a favourable product mix and cost reductions. Management expects a significant upturn in business in Q4 compared to the previous quarters. This view is supported by a strong y/y rise in the order backlog to €13.0m (+26% J/J). The Clean Energy & Mobility segment was the main sales and earnings driver and grew more than 116% y/y. The segment gross margin widened from 42% to 44%. This counterbalanced the weaker gross profits of the other segments. SFC gave no concrete guidance but reiterated that sales and profitability will be below the prior year figures. We have increased our 2020E earnings forecasts based on the 9M results. An updated DCF model yields a new price target of €15.80 (previously: €14.00). We upgrade our rating from Reduce to Add.