NuWays AG: Singulus | Rating: Halten

Original-Research: Singulus - from NuWays AG

Classification of NuWays AG to Singulus

Company Name: Singulus
ISIN: DE000A1681X5

Reason for the research: Update
Recommendation: Halten
Target price: EUR 1.60
Target price on sight of: 12 Monaten
Last rating change:
Analyst: Konstantin Völk

Good start into 2024 and strong order intake; chg. est.

Topic: Singulus reported solid Q1 figures with sales and EBIT above our estimates. Order intake came in strong as already announced on the FY23 CC in April.

Q1 sales increased 26% yoy to € 20.6m (eNuW: € 18.6m), despite a low order backlog of € 55m end of FY23. Q1 EBIT stood at € 0.6m (eNuW: € -1.3m), up from last year’s Q1 (€ -0.9m). Growth was particularly driven by the Solar (+24%) and Life Science (+50%) segments. Life Science recovered from a low level in FY23 which was affected by a challenging macro environment and is gaining traction again. For instance, the MEDLINE production system from Singulus for the processing of contact lenses is steadily gaining acceptance in the market (company news May 14). In FY24e, Solar should again be the most important segment (eNuW: € 50m; + 28% yoy) thanks to CdTe follow-up orders from CNBM as well as potential orders from Enel as they start their new project in the US.

Order intake improved significantly to € 33.2m, a 136% increase yoy due to the strong demand in the semiconductor segment. Furthermore, management expects the order intake to stay at a similar high level for the second quarter.

Successful refinancing: The € 10m loan from Bank of Shanghai which expired on May 9, 2024 was successfully refinanced at the end of April with comparable conditions and a term of 12 months. In addition, Singulus is discussing another € 10m loan from Bank of Shanghai to finance the currently increasing working capital and repayment of debt tranches maturing in FY24e.

Guidance confirmed: Management confirmed its guidance of € 120-130m sales and EBIT in the low double-digit million range. However, despite the strong order intake of € 33.2m in Q1, the outlook appears ambitious given the difficult macro environment and the challenging situation of the solar industry in Europe due to low-cost solar modules from China. That said, Singulus is on a good way to reach operating breakeven this year (eNuW: sales € 97m; EBIT € 0.2m) after five years of negative EBIT (adjusted for the extraordinary income of € 12.1m in FY22 from a property sale).

Singulus midterm prospects remain intact with the potential of larger orders from CNBM for CdTe thinfilm modules and a fast-growing μLED and hydrogen business. Yet, as this is already reflected in the current valuation, in our view, we reiterate HOLD with an unchanged PT of € 1.60 based on DCF.

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