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 20.00 to EUR 19.00.
At its information day on 23 May, Enapter presented its financial and business situation as well as its technology strategy at the new site in Saerbeck. On 24 May, the company presented the AEM Multicore, an electrolyser with an input capacity of 1 MW, which is helping the company make the leap from small electrolysers (hydrogen production of just over 1 kg per day) to large units (H2 production: approx. 450 kg per day). Pilot production is targeted for 2024, and we assume that series production will start in 2025. We believe that automated mass production of stacks will start in Saerbeck in the same year. Successful execution will be crucial to Enapter’s ability to raise new funds in 2024. This will likely be much more challenging than during the pandemic, due to the significant tightening of both monetary and fiscal policy over the past year. In addition, the success story has recently been tarnished by delays in setting up mass production in Saerbeck and the profit warning last year caused by production problems with the EL 4.0 in Pisa. Despite these setbacks, Enapter remains the technology leader in AEM electrolysis, which combines the advantages of the competing technologies: AEM-EL is nearly as cheap and efficient as alkaline electrolysis. Like PEM electrolysis, AEM-EL is very flexible to use and produces hydrogen under high pressure, which reduces the need for downstream compression and saves costs. We therefore still see Enapter excellently positioned to succeed in the very fast-growing electrolysis market. An updated DCF model that takes into account the deteriorated financing conditions and lower forecasts due to the new technology strategy yields a new price target of €19 (previously: €20). We confirm our Buy recommendation.