Original-Research: Cantourage Group SE (von NuWays AG): Buy

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Original-Research: Cantourage Group SE - from NuWays AG

11.03.2025 / 09:11 CET/CEST

Dissemination of a Research, transmitted by EQS News - a service of EQS

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Classification of NuWays AG to Cantourage Group SE

Company Name: Cantourage Group SE

ISIN: DE000A3DSV01

Reason for the research: Update

Recommendation: Buy

from: 11.03.2025

Target price: EUR 12.50

Target price on sight of: 12 months

Last rating change:

Analyst: Christian Sandherr

Q1 on track to hit a new record

Following the record Q4 with EUR 21m sales, Cantourage should be on track to

hit another record high quarter with Q1. During the first two months of the

year, the company generated EUR 14.9m sales, already more than 2x last year's

whole Q1 with EUR 6.2m (regulatory change not until April of last year).

Assuming no supply chain disruptions, Cantourage is seen to reach some EUR 22m

sales in Q1 (eNuW).

This bodes well with our 2025 estimates, which imply 67% yoy sales growth to

EUR 86m (so far no FY25 guidance). While we have factored in some weaker

months during the summer and a margin of safety, Cantourage currently looks

set to be on track to beat our estimates, especially when assuming positive

contributions from an increased supplier depth and successful

de-bottlenecking efforts at processing sites. With its top-line further

improving, scale effects should begin to kick in. Despite ongoing expansion

expenses, the group's EBITDA margin is seen to grow to 10% (eNuW).

Further capacity expansion announced. To be able to cope with the surging

demand across its three core markets, Germany, the UK and Poland, as well as

geographical expansion, Cantourage decided to further expand its processing

capacity. This comes less than 10 months after the last increase to 14t p.a.

(EUR 100m at EUR 7.5 per gram), underpinning the unbroken demand and sales

potential way beyond EUR 100m, in our view. While the company has not

announced any detail, we would expect the additional capacities to mainly

come from third-party processing plants, keeping the business capital light.

Threats from political uncertainties limited. German elections turned out as

expected with Christian Democratic Union (CDU) and Social Democratic Party

(SPD) forming the new government. While CDU has historically opposed a

broader cannabis legalization, SPD was a driving force behind the changes

implemented almost one year ago. While we see the potential of re-regulation

on the recreational side, i.e. cannabis clubs and growing own plants, a full

return to the "old" model seems unlikely as it would come with a high degree

of complexity as well as a wave of lawsuits.

Importantly, Cantourage is only active in the medical space, we hence regard

the risks to its business model as limited. Further, as the company has been

increasing its operational footprint outside of its home turf, potential

implications from any regulatory change are rather decreasing going forward.

BUY with an unchanged EUR 12.50 PT based on DCF.

You can download the research here: http://www.more-ir.de/d/31946.pdf

For additional information visit our website:

https://www.nuways-ag.com/research-feed

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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2098458 11.03.2025 CET/CEST

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