Original-Research: Nabaltec AG (von NuWays AG): Buy

^

Original-Research: Nabaltec AG - from NuWays AG

21.01.2025 / 09:00 CET/CEST

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

Group.

The issuer is solely responsible for the content of this research. The

result of this research does not constitute investment advice or an

invitation to conclude certain stock exchange transactions.

---------------------------------------------------------------------------

Classification of NuWays AG to Nabaltec AG

Company Name: Nabaltec AG

ISIN: DE000A0KPPR7

Reason for the research: Update

Recommendation: Buy

from: 21.01.2025

Target price: EUR 25.00

Target price on sight of: 12 months

Last rating change:

Analyst: Christian Sandherr

Ending FY24 on a high note; FY25 with additional growth

Nabaltec to reach upper end of FY24e EBIT margin guidance. With Q3 figures,

management confirmed its FY24 guidance of 2-4% yoy sales growth and an 8-10%

EBIT margin while achieving 1.5% yoy growth and a 10.6% EBIT margin during

the first nine months. While we expect the lower end of the sales guidance

to be reached (eNuW: 1.7% yoy sales growth), the upper end of the margin

guidance should be likely. Our current 9.3% margin estimate would imply only

a 4.9% in Q4.

2025 to show further growth carried by rising volumes as well as expected

price increases. Considering generally rising production costs (raw

materials, energy and labour) as well as expected sales price increase of

its peers, we would expect Nabaltec to also slightly increase prices (eNuW:

3.5%). On top, demand for the company's core product (ATH, an environmental

friendly flame retardant, which is primarily used in cables and wires) is

seen to remain strong. This should be driven by several trends including

investments into data centres and an improving US construction industry.

Further, the gap filler is growing in importance. Sales from the white

powder, that improves thermal management capabilities of adhesives used in

EV batteries, should reach EUR 8m in FY25e. Once the current capacity

expansion is completed, Nabaltec will be able to produce EUR 40m worth of

product p.a.

All in all, Nabaltec looks well positioned to grow its top-line by a mid

single-digit percentage (eNuW: 7.3%) while slightly expanding its EBIT

margin. The past few quarters have underpinned the sustainability of the

company's double-digit margin target.

2nd year of growth investments no burden on the balance sheet. Following

some EUR 30m of capex in FY24e (~ EUR 18m for expanding boehmite gap filler

production capacities), Nabaltec is seen to spend additional EUR 32m in FY25e

to complete the capacity expansion for gap fillers, build a fully automized

warehouse and special maintenance of its Specialty Oxides production.

Nevertheless, the company's op. cash flow should once again be sufficient

(eNuW EUR 29m) to largely cover those investments.

Valuation remains attractive. Despite macroeconomic headwinds, unlike many

of its peers, Nabaltec is able to show top-line and margin growth. With some

EUR 30m operating cash flow in FY24e and a slight net cash position, the

current valuation of 8.4x PE '24e looks undemanding. We confirm our BUY

rating with a EUR 25 PT, which is based on FCFY 2025e, and keep the company on

out Alpha List.

You can download the research here: http://www.more-ir.de/d/31643.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

ﯯ뻻

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.

ﯯ뻻

---------------------------------------------------------------------------

The EQS Distribution Services include Regulatory Announcements,

Financial/Corporate News and Press Releases.

Archive at www.eqs-news.com

---------------------------------------------------------------------------

2071277 21.01.2025 CET/CEST

°