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 increased the price target from EUR 33.00 to EUR 34.00.

Abstract
In May, 2G made a fundamental strategic decision of great significance for the company and entered the large-scale heat pump market. In addition to the production of CHP plants (gas-based electricity and heat production plants), 2G will also in future manufacture large heat pumps (electricity-based heat production plants). With the acquisition of the Dutch heat pump manufacturer NRGTEQ (approx. 10 employees, turnover approx. €1.5m – €3.0m) in August, 2G is accelerating its entry into this market. In the medium term, 2G wants to achieve similarly high revenues with the sale of heat pumps as with CHP plants. The timing of the entry is favourable, as 2G has sufficient time to integrate the large heat pumps manufactured by NRGTEQ into the 2G production facility in Heek and to set up an industrialised production process there, as has been achieved with CHP plants in recent years. From 2025 onwards, 2G expects demand for large heat pumps to pick up significantly as municipalities start to implement the decarbonisation of municipal heat supply in accordance with the Heat Planning Act passed by the German cabinet. The figures published in the H1 report match reported preliminarily numbers (sales and total output). EBIT surprised positively with a 62% y/y increase to €4.1m. Net profit increased by 50% to €2.7m. Based on the convincing H1 figures and the still high order backlog (€194m), management confirmed guidance for the current year (sales: €310m – €350m, EBIT margin: 6.5% – 8.5%). We maintain our forecasts for 2023 and confirm our buy recommendation for the share in view of the improved medium-term growth prospects due to the entry into the large heat pump business. An updated DCF model yields a new price target of €34 (previously: €33).