Hexagon Composites (Buy, TP: NOK30.00) - Agility still struggling
With still-rising carbon fibre costs, unstable supply chains and potentially lower volume efficiency continuing to weigh on profitability in Agility, we have cut our EBITDA estimates for stand-alone Hexagon Composites by 13% for 2023 and 20% for 2024 on lower margins in the segment, and we are now 13% below consensus for 2023e. We reiterate our BUY but have cut our target price to NOK30 (40) on a lower market value of its stake in Hexagon Purus and reduced estimates.Hexagon Composites is divided into three business segments. Co.'s Hexagon Ragasco segment manufactures low-pressue composite cylinders, such as cylinders for propane gas; and Co.'s Hexagon Lincoln/Hexagon Raufoss segment develops and supplies complete storage and transport systems for natural gas and hydrogen to the bus and automotive industry and for bulk transport of compressed gas. The Group's activities are divided into the following regions: Europe, North America, South-East Asia, Middle East and South America.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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