First Berlin Equity Research has published a research update on 2G Energy AG (ISIN: DE000A0HL8N9). Analyst Dr. Karsten von Blumenthal reiterated his ADD rating and maintained his EUR 123.00 price target.
While 2G’s Q1 sales and total output met our forecasts and were significantly above the previous year’s figures (+13% and +26% respectively), EBIT of €-0.8m fell short of the previous year’s figure (€0.3m) and our estimate of €1.0m. This was due to rising overheads associated with increased production and an increase in unfinished & finished goods to €11.5m, which means that significant gross profit will be held over until the second quarter. The most important news, however, is the order intake in April, which amounted to €23m and was 42% higher than the prior year figure. The April orders came from customers who knew that natural gas prices were very high and are likely to remain so for some time. Even the threat of natural gas shortages in Europe next winter did not deter them from buying 2G’s CHPs. We therefore do not expect a decline in order intake in the coming months. The record order book of over €180m should keep 2G’s capacity utilised into the first quarter of 2023. The 26% increase in total output y/y in Q1 proves that 2G has managed the challenges on the procurement side very well up to now. We therefore reiterate our forecasts and see 2G on track to meet full-year guidance (revenue €280m-€310m with an EBIT margin of 6%-8%). An updated DCF model still yields a price target of €123. We confirm our Add recommendation.