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

Original-Research: Cantourage Group SE – from NuWays AG

Classification of NuWays AG to Cantourage Group SE

Company Name: Cantourage Group SE
ISIN: DE000A3DSV01

Reason for the research: Update
Recommendation: Kaufen
from: 17.05.2024
Target price: EUR 10.00
Target price on sight of: 12 months
Last rating change:
Analyst: Christian Sandherr

Solid FY23 and Q1’24 prelims // accelerating growth in April; chg.

Topic: Cantourage issued solid FY23 and Q1 2024 prelims, which were
impacted by slower patient growth amid the looming (at that time)
regulatory changes. Sales figures for April (following legalization light)
show a significant acceleration.

FY23 sales grew by 67% yoy to € 23.6m (preliminary figures), slightly below
our estimate of € 24.7m as Q4 grew ‘only’ 30% yoy to € 6.4m vs the expected
50% to € 7.5m. To a large degree, this can be explained by a slower patient
growth in anticipation of the at that time looming Cannabis Act. FY23
EBITDA came in at € – 0.5m following a roughly € 400k loss after the first
nine months. The implied € 100k loss in Q4 is despite the slowed growth.
Management guided for high double-digit percentage sales growth and and at
least break-even EBITDA.

Legalization light tailwinds kicking in. While Q1 (on preliminary basis)
started out with “only” 26% yoy sales growth to € 6.2m, April (the first
month following the changes from the Cannabis Act) has already shown a
significant acceleration to 160%, which can be traced back to cannabis no
longer being considered a narcotic, notably simplifying dispensing by
pharmacies and prescriptions by doctors. Receiving a prescription for
medical cannabis has become as easy as for ibuprofen 600. While it is
difficult to reliably access the detailed impact on FY growth, we feel
comfortable with our estimated growth acceleration carried by Cantourage’s
broad global supplier network with more than 60 grower partners and its own
recently launched telemedicine platform, telecan°.

Accordingly, we expect sequential growth during the coming quarters as the
number of medical cannabis patients is seen to surge. Mind you, in Canada,
the number of medial cannabis patients grew from 24k in 2015 to 330k in
2018, the year of the full legalization and Germany had roughly 4m cannabis
users in 2021 with the majority buying from black markets.

While management has not issued a FY24 guidance yet, we expect them to do
so once the company is able to better assess the sustainable impact from
the Cannabis Act, likely with H2 figures, in our view.

We confirm our BUY rating with a € 10 PT (old: € 11), based on DCF.

You can download the research here:
http://www.more-ir.de/d/29797.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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