First Berlin Equity Research has published a research update on Enapter AG (ISIN: DE000A255G02). Analyst Dr. Karsten von Blumenthal reiterated his BUY rating and decreased the price target from EUR 13.00 to EUR 11.00.

Enapter is the undisputed technology leader in AEM electrolysis. We believe that the iridium-free nature of its AEM technology will be a key competitive advantage over PEM technology in the coming years, as the supply of the precious metal will be insufficient to meet rapidly increasing demand from PEM electrolyser producers. In the past year, Enapter has made great progress in product development and now offers medium-sized and large multi-core models in addition to the small single-core electrolyser. We consider this expansion of the product range to be vital, as demand for small electrolysers has fallen far short of original expectations. The strong order intake for the multi-core electrolysers indicates to us that demand will be high for many years. Around 3/4 of the order backlog of €26m (YE/23) is based on multi-core EL orders. Enapter has made another strategic decision that we also believe is vital to its survival: From now on, the company will concentrate largely on the development and production of stacks. Both electrolyser production and global distribution will be carried out with partners. By adjusting its business model in this way, Enapter has a real chance of being one of the winners in the race towards the cheapest and most reliable hydrogen production technology and thus reaching the hoped-for Eldorado. However, the company still has a few major hurdles to overcome on the way there. These include the development of a significantly larger stack (approx. 30 kW) and the establishment of reliable stack mass production, including raising the necessary funds for this and for further expansion. We are raising our WACC estimate from 13.8% to 15.1% due to the increased risks (financing risk, technological risk, production risk). An updated DCF model yields a new price target of €11 (previously: €13). Still Buy.