LHV Institutional 'CrossChem initiation of coverage, December 29th, 2021'

* CrossChem SIA (hereafter referred to as the ‘Company’ or ‘CrossChem’) produces and distributes chemical products and special production equipment. The main products and services include AdBlue, AUS40, liquid fertilizers, auto and industrial chemicals, storage tanks and other equipment. In 2020, AdBlue related operations constituted around 96% of revenues. The Company is contributing to international environmental improvement including Europe’s roadmap for sustainability and care for the environment by providing relevant products to this ambition. The emissions standard regulatory pressure is changing the diesel engines´ exhaust systems (including marine), thus manufacturers use the Selective Catalytic Reduction (SCR) system which runs on diesel exhaust fluid (DEF) or AdBlue. The Company also has an ESG policy in place which includes five Sustainability Development Goals.
* The Company has established a three year EUR 10m bond programme. In November 2021, the Company issued three-year bonds worth EUR 3m with a 6.75% coupon rate. The bonds are admitted to trading on Nasdaq Riga First North. The proceeds of the bonds will be used to support the Company’s development programme 2021-2025, which has four main focus areas: 1. Network of AdBlue filling stations 2. Marine supply 3. New products 4. Working capital to source raw materials. The coupon payments are quarterly and the bonds are secured by its parent CrossChem International which guarantees investors the full issue amount of bonds and as well the interest payments.
* This report contains a full set of financial forecasts and is useful for gaining an initial insight into the company. Please also refer to the tables and charts in the attachment.