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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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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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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.

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