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 increased the price target from EUR 35.00 to EUR 36.00.
SFC Energy has acquired Johnson Matthey (JM) assets and technology for the production of Membrane Electrode Assemblies (MEAs) for direct methanol fuel cells (DMFC). We believe that this is a lucky deal for SFC. The company has taken advantage of a very rare opportunity to extend its coverage of the DMFC value chain. This gives SFC key technological know-how and supply security. The integration of MEA production will secure SFC’s technology leadership in DMFC and will generate cost savings. SFC Energy’s 2022 final figures matched preliminary numbers. 2022 was a very successful year with almost 33% top line growth and adjusted EBITDA rising 31% to €8.2m. For 2023, SFC is guiding towards sales in the range of €103m to €111m and adjusted EBITDA of €8.9m – €14.1m. This implies revenue growth between 21% and 30% and adjusted EBITDA growth between 9% and 73%. We stick to our forecast of €114m (+34% y/y) in revenue and adjusted EBITDA of €12.5m (+52% y/y). SFC’s fuel-cell based clean power solutions work anytime & anywhere and meet strongly growing demand, especially in North America and Asia. The US customer LiveView placed a €15m follow-up order in November 2022, the largest order in the company’s history. In March 2023, SFC and its Indian partner received a €16m order from the Indian Defence Forces to supply 450 portable methanol fuel cell systems. The order backlog amounted to €74m at the end of 2022 (+142% y/y). We see SFC well positioned for further strong and profitable growth. We have slightly adjusted our forecasts and incorporated the JM deal (higher 2023 CapEx, higher gross margin, more personnel) into our model. We increase our price target to €36 (previously: €35) and confirm the Buy rating.