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

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: BUY
from: 29.02.2024
Target price: 31.00
Target price on sight of: 12 Monaten
Last rating change:
Analyst: Christian Sandherr

Several structural trends could drive mid-term growth

Topic: Despite a strong competitive quality, R. Stahl had difficulties
translating it into operating performance between 2016 and 2021. Thanks to
R. Stahl having done its homework by implementing changes on the back of
efficiency and structural trends kicking in, shares look poised for a
re-rating.

R. Stahl has begun to supply LED lightning solutions to a nuclear plant in
UK (Hinkley Point C) with a total expected revenue of € 10-12m, of which c.
€ 3.5m are already booked as revenue in FY23e (eNuW). Importantly, 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 6 new reactors are planned by 2050. With an
estimated potential revenue of € 5m per refurbished reactor and € 10m for
the new ones, this implies a € 330m revenue opportunity for R. Stahl
(eNuW).

LNG delivers 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 leads to a rising demand for LNG
in Europe. For instance, Germany opened its first LNG terminal in
Wilhelmshaven during December 2022 to compensate for the Russian gas
imports. Until 2027, nine LNG terminals are planned in Germany, to import
capacities of up to 69 billion cubic meters, of which the majority is seen
to come from USA and Qatar.

In contrast to the booming LNG business, the chemical industry in Germany
was rather weak since the Russian invasion, due to substantially increased
energy and gas prices. We expect the softening to carry well into FY24e, as
the German chemical association (VCI) expects a revenue decline of 3%
during 2024e for its home market (2023: -12%). Despite the short-term
challenges, in the long-run we do not see the local chemical industry in
severe danger. It should hence remain an integral part of the company.

Order intake increased for the third consecutive year up to € 343m (+9.3%
yoy) leading to a strong order backlog of € 115m at the end of FY23e. We
expect to see mid-single-digit sales growth for FY24e in combination with
low double-digit EBITDA margins. Yet, valuation looks undemanding. Shares
are trading on a mere 5.0x EV/EBITDA (9x PE) 2024e, clearly below the
historical average of roughly 7x. This is despite the structural demand
tailwinds, which should fuel mid-term sales and margin growth.

Hence, we reiterate our BUY rating with an unchanged PT of € 31, based on
DCF.

You can download the research here:
http://www.more-ir.de/d/29027.pdf
For additional information visit our website
www.nuways-ag.com/research.

Contact for questions
Die Analyse oder weiterführende Informationen zu dieser können Sie hier downloaden
www.nuways-ag.com/research.
Kontakt für Rückfragen
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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——————-transmitted by EQS Group AG.——————-


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The result of this research does not constitute investment advice
or an invitation to conclude certain stock exchange transactions.