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

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

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: 09.07.2024
Target price: EUR 7.00
Last rating change:
Analyst: Christian Sandherr

Successful AMG // Surprisingly strong JV performance
Topic: During the last weeks, LION published its FY23 annual report and
hosted its AGM. Here are the key takeaways:

FY23 marked a milestone as the company transformed itself into an automated
manufacturer of high-quality battery packs for mobility and storage
solutions through the acquisition of the former BMW i3 battery pack
production lines. The current set-up offers a production capacity of up to
40k battery packs p.a. with a revenue potential of some € 200m by 2028.

Despite the transformation, which was completed by the end of May 2023,
LION’s EBITDA came in break-even with roughly € 56m sales (~50% from
pre-produced packs); op. cash flow stood at € 2.8m. Worth highlighting, T‹V
S‹D Battery Testing (LION holds a 30% in this JV) reported particularly
strong FY23 results with sales up 41% yoy (€ 16.1m) and an 18.9% EBIT
margin; € 660k P&L contribution to LION. Thanks to a structurally growing
demand for battery testing capacities, T‹V S‹D Battery Testing looks set to
continue growing at roughly 15% p.a. during the mid-term.
FY24 financial targets confirmed. Management expects FY24 sales to the tune
of € 60-65 and € 0.5-1m EBITDA. Importantly, the current fix cost base
should only slightly increase going forward (mainly due to ramping sales
efforts, i.e. growing sales headcount and trade shows), providing plenty of
room for operating leverage as sales increase.

Further, LION remains on track to launch an updated product portfolio
during H2, featuring a higher energy density NMC pack as well as a LFP
solution (both enabled by the SVOLT partnership). Especially the latter
should enable LION to better benefit from the strongly growing stationary
storage market.
Light battery remains an attractive option. With its immersion cooled pack,
LION would add a highperformance pack, to be used in hyper cars. The
project is developing as planned and LION expects a first request for
quotations until the end of the year. A positive outcome would notably
increase the likelihood of it becoming a notably sales driver during the
mid-term (currently not part of our revenue model).

We confirm our BUY rating with an unchanged € 7 PT based on a
sum-of-the-parts valuation, whereas € 6.50 are stemming from the battery
pack manufacturing business and € 0.50 from the T‹V S‹D JV.

You can download the research here:
http://www.more-ir.de/d/30165.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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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse.
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