Hexagon Purus (Buy, TP: NOK13.00) - Liquidity need likely approaching
Q3 EBITDA was 5% above consensus and 11% above our forecast, driven by strong margins. With the working capital build-up in Q3 likely to be sustained and significant remaining capex, we believe Hexagon Purus will need to approach equity markets in Q1 2024, but believe that this should be well understood in the capital markets. We reiterate our BUY, but have cut our target price to NOK13 (19), reflecting a 20% discount to our fair value based on the peer group and fundamental valuation. Despite the industry-wide sell-off, the stock is trading at an attractive 32–51% discount to hydrogen equipment peers on 2023–2026e EV/sales.
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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