First Berlin Equity Research has published a research update on 2G Energy AG (ISIN: DE000A0HL8N9). Analyst Dr. Karsten von Blumenthal reiterated his BUY rating and maintained his EUR 31.00 price target.
2G Energy has confirmed 2022 revenue of €313m (+17% y/y) as already reported in February. Total output increased even further (26% y/y) to €339m, demonstrating strong production performance. The EBIT margin is 7.0%, in line with consensus estimates and slightly below our forecast of 7.3%. The company has confirmed 2023 sales guidance of €310m – €350m at an EBIT margin of 6.5% – 8.5%. The previous FB estimate is at the upper end of the guidance. Given the high material cost ratio in 2022 and the high backlog of nearly completed CHP plants at the end of 2022, which will be sold in 2023 and have a high material cost ratio compared to service, we lower our 2023 EBIT margin estimate from 8.5% to 8.0% but maintain our revenue forecast of €345m. The high order backlog (€177m), as well as the better-than-expected gas supply in winter and the end of the taxation of so-called windfall profits planned for June should provide sufficient momentum for increasing demand and CHP plant sales. An updated DCF model yields an unchanged €31 price target. We confirm our Buy recommendation.
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