Hexagon Purus (Buy, TP: NOK32.00) - Liquidity need approaching
We forecast Q4 EBITDA of NOK-116m, 5% below consensus. However, with Hexagon Purus in its early years, we believe prospects for long-term growth and profitability should be in focus. We see 2023e revenues being supported by its backlog, with a backlog coverage of ~65%. Given its ambitious growth plans and limited liquidity available for growth, we expect the company to tap into the equity market in the near term, which should be already expected by the capital markets. We consider the valuation attractive, as it would need to more than double to trade in line with hydrogen equipment peers on 2022–2025e EV/sales. We reiterate our BUY and have raised our target price to NOK32 (22).
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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