First Berlin Equity Research has published a research update on Cantourage Group SE (ISIN: DE000A3DSV01). Analyst Ellis Acklin reiterated his BUY rating and maintained his EUR 11.00 price target.

Abstract
Cantourage announced that long-standing Canadian partner Green Karat has secured EU-GMP certification. This allows more processing to be completed upstream before product enters Cantourage’s European distribution network. The near-term economic trade-off looks broadly neutral. Some margin will shift to the cultivator, but this should be offset by modest working capital relief and freed processing capacity. In our view, the more important benefit is strategic. By supporting Green Karat through certification, Cantourage has deepened the relationship into an exclusive arrangement around products that are important for its growing UK business. Finished product can now arrive package-ready and certified to required medical standards. This simplifies the supply chain and improves flexibility. We estimate that there are another 3 to 4 suppliers currently working through similar certification processes, which could increasingly help Cantourage secure premium supply and reinforce its role as a gateway into European markets. We leave our forecasts and €11 PT unchanged and remain Buy-rated (124% upside).