First Berlin Equity Research has published a research update on SFC Energy AG (ISIN: DE0007568578). Analyst Dr. Karsten von Blumenthal reiterated his BUY rating and decreased the price target from EUR 36.00 to EUR 34.00.

SFC presented strong 9M figures and raised 2023 guidance. Sales rose 38% y/y to €88m and adjusted EBITDA 62% to €11.9m (margin increase from 11.5% to 13.6%). Following the guidance increase, we have raised our 2023 forecasts and now expect sales of €116m and adjusted EBITDA of €13.5m. Although we have recalibrated our forecasts for SFC’s growth path for the coming years, the growth story remains very compelling with an expected 2022-27 CAGR of ca. 30%. This very strong growth coincides with adjusted EBITDA margin expansion from 9.6% to 13.5% in 2027E. To our knowledge, SFC is the only profitable listed fuel cell company. Demand for SFC’s proven and attractive product range remains high, especially from industrial and public security customers. The order backlog rose 36% y/y to €75m. The main growth drivers, regional (in particular Asia and the US) and technological expansion (especially hydrogen fuel cells) are intact. A revised DCF model yields a new price target of €34 (previously: €36). We confirm our Buy rating.