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Original-Research: LION E-Mobility AG - from NuWays AG
08.11.2024 / 09:01 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group AG.
The issuer is solely responsible for the content of this research. The
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invitation to conclude certain stock exchange transactions.
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Classification of NuWays AG to LION E-Mobility AG
Company Name: LION E-Mobility AG
ISIN: CH0560888270
Reason for the research: Update
Recommendation: Buy
from: 08.11.2024
Target price: EUR 3.60
Target price on sight of: 12 months
Last rating change:
Analyst: Christian Sandherr
LIGHT battery closer to commercialization // TÜV SÜD stake sold
LION E-Mobility announced the successful completion of high-temperature
tests for its LION LIGHT battery, which includes advanced immersion cooling
technology, in collaboration with a German premium OEM. The battery exceeded
test standards, demonstrating robust performance under extreme conditions
and making it unique in the market for meeting the OEM's requirements.
This is a significant milestone, as it validates the product and puts LION
closer to commercialization. Here are the expected next steps: Once final
testing is completed (in our view only a matter of form), LION should
receive a request for quotation from the premium OEM. With this, the company
is seen to put serial production plans into terms. In our view, the most
likely situation would be a production JV with a Tier 1 supplier.
Importantly, no exclusivity agreement has been signed with the OEM currently
testing the battery. We hence expect LION to also be in early talks with
additional potential customers.As the commercial aspects and concrete
timeline until the fist serial production could be live are still difficult
to grasp, we have not yet included the LIGHT battery in our estimates.
What's more, LION announced the divestment of its 30% stake in TÜV SÜD
Battery Testing to boost liquidity, as mentioned in its H1 report. In FY23,
TÜV SÜD Battery Testing achieved EUR 16m in sales (+ 41% yoy) with an 18.9%
EBIT margin, driven by a strong, ongoing demand for battery testing
services. While the company has so far not announced a price, we expect the
buyer (the joint venture partner TUV SUD AG) to pay roughly the book value
recorded in the FY23 annual report of EUR 5.6. The proceedes will mainly be
used to repay outstanding liabilities.
Operations remain burdened during the short-term. As reflected by the FY24
guidance, which was cut with H1 figures, demand for battery pack solutions
is seen to remain lackluster during H2, despite significantly improving vs.
the first half of the year. FY24e sales are seen to decrease by 41% to EUR 33m
(eNuW). In our view, this should to a large extent be driven by strongly
falling battery prices and the resulting "wait and see" mentality of
customers. This is not expected to change until H2 2025, in our view. While
we expect FY25e to show a strong yoy sales increase, our figures are still
below the reported numbers from FY22/23. Yet, this should be sufficient to
get close to op. cash flow break even.
LION E-Mobility remains a BUY with an unchanged EUR 3.6 PT based on SOTP.
You can download the research here: http://www.more-ir.de/d/31231.pdf
For additional information visit our website: www.nuways-ag.com/research
Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss
bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben
analysierten Unternehmen befinden sich in der vollständigen Analyse.
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2025457 08.11.2024 CET/CEST
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