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 35.00 price target.

Abstract
2G Energy has reported preliminary 2024 revenue. At €376m, this was 3% above the previous year’s figure, 1% ahead of our estimate, and within guidance of €370m to €380m. After 2G grew by 17% in each of the two previous years, growth in 2024 was comparatively weak, as the German business recorded an unexpectedly sharp slump (-11% y/y). This is due to major political and regulatory uncertainty. The inability of the old traffic light coalition to agree on a budget and the lack of regulatory clarity regarding CHP subsidies have led to great reluctance to invest among 2G’s customers. With the extension of the CHP Act and the prospect of a stable new federal government from Easter, nothing now stands in the way of a revitalisation of the German market, and 2G has indeed reported a significant upturn in domestic demand for CHP systems since the start of the year. Other growth drivers are the very successful international business and the new large heat pump business. 2G has confirmed sales guidance for 2025 and 2026 and should grow by at least 14% this year. In the best-case scenario, 2G believes that growth of 20% is possible. The record order backlog of €189m in the new plant business provides a solid foundation for the planned growth. We therefore confirm our previous growth forecasts. An updated DCF model yields an unchanged €35 price target. In view of the growth prospects, the expected EBIT margin expansion and the attractive valuation (2025 EV/EBIT of 9x), we confirm our Buy recommendation.