Original-Research: R. STAHL AG (von NuWays AG): Kaufen

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Original-Research: R. STAHL AG - from NuWays AG

Classification of NuWays AG to R. STAHL AG

Company Name: R. STAHL AG

ISIN: DE000A1PHBB5

Reason for the research: Update

Recommendation: Kaufen

from: 11.06.2024

Target price: EUR 29.00

Target price on sight of: 12 Monaten

Last rating change:

Analyst: Christian Sandherr

Operating turnaround intact thanks to several structural trends

LNG remains a material mid-term growth opportunity. R. Stahl is the

globally leading provider of explosion protection for LNG tankers,

terminals and liquification/regassification plants (25-75% market shares).

Independence from Russian energy imports lead to a rising demand for LNG in

Europe. Of the nine planned LNG terminals in Germany, five floating

terminals are already running, and another terminal (Wilhelmshaven II) is

set to become operational in H2 2024. Germany is next to China and the

Netherlands one of the most important LNG importers in the world and is

expected to further expand its import capacity in the coming years. LNG

accounts currently for c. 10% of R. Stahl's revenue (eNuW) and is seen to

be one of the key growth drivers in the mid-term.

Lighting in the German chemical industry. After seven quarters of declining

production volumes, the chemical industry returned to yoy growth in Q1

(5.4%). At the end of 2023, the German Chemical Association (VCI) expected

a slight yoy decline of production volumes for 2024. This has now changed

to a 3.5% increase due to the good start into 2024. Nevertheless, according

to VCI president Markus Steilemann the situation remains tense as Germany

is still too expensive for chemical production which can only be changed by

politics. Higher production volumes could lead to increasing investments in

the chemical industry and with that to a higher demand for R. Stahl's

explosion protection products. We estimate the chemical industry to be

responsible for c. 1/3 of R. Stahl's revenues.

Nuclear shows positive momentum. R. Stahl is supplying lighting technology

worth c. EUR 10-12m (eNuW) for the two reactors currently being built at the

Hinkley Point C nuclear power plant in the UK. Even more important, the UK

project is partially owned by the French utility company EDF, which also

manages France's 56 power reactors. C. 54 of these need to be refurbished

within the next 20 years and at least 6 new reactors are planned by 2050.

With an estimated revenue of EUR 5m per refurbished reactor and EUR 10m for the

new ones, this implies a EUR 330m revenue opportunity for R. Stahl (eNuW).

Demand for R. Stahl's products remains high. Order intake in Q1 FY24 came

in at EUR 92.3m, a 24% increase qoq and only slightly below the

extraordinarily strong Q1 FY23 (EUR 96.7m). Hence, we expect to see

mid-single-digit sales growth for FY24e in combination with low

double-digit EBITDA margins. Reiterate BUY with an unchanged PT of EUR 29.00

based on DCF.

You can download the research here:

http://www.more-ir.de/d/30011.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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The result of this research does not constitute investment advice

or an invitation to conclude certain stock exchange transactions.

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