Original-Research: LION E-Mobility AG (von NuWays AG): BUY

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Original-Research: LION E-Mobility AG - from NuWays AG

04.04.2025 / 09:00 CET/CEST

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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: 04.04.2025

Target price: EUR 3.20

Target price on sight of: 12 months

Last rating change:

Analyst: Christian Sandherr

Weak Q4 prelims, op. trough should have passed; chg.

FY24 preliminary sales came in at a mere EUR 16.9m, implying a 70% yoy decline

(falling short of our EUR 33.2m estimate) as a result of a strongly declined

sentiment across the company's most important end markets, storage solutions

and mobility. The latter was strongly impacted by weakened demand for end

products (e.g. electric mini buses), falling battery prices with the

resulting "wait and see" mentality of customers but also several

insolvencies. Preliminary Q4 sales stood at only EUR 4.5m, down 78% yoy.

FY24 prelim. EBITDA was negative at EUR -4.2m as a result of the negative

operating leverage but also development work for the new chemistry cells,

especially NMC (eNuW ~ EUR 1.5m). The EUR 1.9m positive EBITDA figure in Q4 can

be explained by book gains related to the divestment of LION's stake in TÜV

SÜD Battery testing. Also, during the earnings call, management highlighted

renegotiated supplier contracts, which positively impacted the group's gross

margin and should be sustainable going forward.

Good start into the year. Positively, it seems like the company has passed

the market's trough as reflected by the good start into the year with EUR 6.4m

sales (vs. EUR 1.2m in Q1 2024) and a "clearly positive EBITDA" (vs. EUR -2.6m

in Q1 2024). This positive momentum is expected to persist throughout FY25

as management guides for EUR 28-35m sales (eNuW: EUR 32m) and positive EBITDA

(eNuW: break-even).

Portfolio expansion ongoing. LION will deliver first orders of its new

higher energy density battery pack (NMC) in April, with a further ramp up

throughout 2025. With this, the company will also introduce "narrow packs",

increasing the addressable markets. During the earnings call, management

also presented a new project. As per request from a major German truck OEM,

LION is working on a 540kWh battery for trucks that can charge >400km range

within the legally required 15 minute break of truck drivers.

Immersion cooled batteries retain game changer potential. With last year's

Q3 results, management shared promising testing results of the "LIGHT

Battery". Despite some delays (potential series application), the prospects

remain significant. Targeting only PHEV and BEV cars with > EUR 100k selling

prices, the market should reach up to EUR 1.4bn by 2030. Assuming further

positive testing results, first small testvolumes could already impact

LION's 2026 P&L, in our view. This should serve as proof-of-concept and

hence justify the inclusion within our long-term growth estimates.

BUY with a new EUR 3.20 PT (old: EUR 3.60) based on DCF.

You can download the research here: http://www.more-ir.de/d/32162.pdf

For additional information visit our website:

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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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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben

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2111684 04.04.2025 CET/CEST

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