2024/25 closed better than expected
Note regarding MiFID II: This research report has been prepared by order of the issuer based on a contractual agreement and is being compensated for by the issuer. The research report has simultaneously been made publicly available to all interested persons. Hence, the receipt of this research report is to be regarded as a permitted insignificant non-monetary benefit according to § 64 para 7 sentence 2 No. 1 and 2 of the German Securities Trading Act (WpHG).CEOTRONICS AG (ISIN DE0005407407, Basic Board, CEK GY) slightly exceeded the raised revenue forecast and our estimates. With consolidated sales of € 55.8 million (+88.4%), incoming orders amounted to € 44.9 million. The 51.7% decline in incoming orders is due to the large-scale SmG project (base effect), which drastically increased the previous year's figure. At around € 60 million, the order backlog exceeds annual sales in absolute terms, but has fallen by around 15.4% compared to the previous year. More important for the further share price development, however, is: 1) The large-scale SmG project has a beacon character and opens up access for CEOTRONICS to larger orders from other NATO armies; the order announced at the end of April 2025 (volume € 13.5m) confirms this in our view. 2) Small technology companies within the EU that can participate in ReARM Europe are moving more into the focus of investors. Compared to these companies, the valuation of CEOTRONICS shares is still moderate.
Our DCF analysis yields a value per share of € 9.47 and the peer group analysis based on 2025/26 and 2026/27 yields an average value per share of € 21.94. Equally weighting both approaches, we calculate a Fair value per share of € 15.71. With the Fair value exceeding the current share price by 15.1%, we upgrade our investment rating from “Hold” to “Buy”.
Ceotronics is a holding company. Co. through its subsidiaries produces standard and custom-made electronic communication systems for ambient conditions. Co.'s products include headsets and communication systems for connecting to analog, digital radios and digital mini radio networks. Co.'s products for audio, video and data communication are used in industrial applications, by the military, at airports and emergency services applications. Fire crews, civil defense and other rescue services use Co.'s technology in the form of helmet or mask communication systems, headsets for two-way radios, mobile intercom systems, speaker/microphone systems and digital noise reduction technology.
Since 2007, BankM AG (Frankfurt am Main, Germany) is the partner of small and medium-sized enterprises and specializing in capital market financing with its experienced, interdisciplinary team. SME customers benefit from individual service and rapid access to selected investors that fit their needs. BankM's services include capital market advisory, arranging IPOs and capital increases for equity financing, debt advisory and debt capital mediation, designated sponsoring and research as well as M&A, hereby specializing in the identification of suitable strategic partners in China.
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