HansaMatrix: LightSpace opportunity discounted unjustly (stays BUY)

Updating our estimates after the 1Q results, we have cut our price target (PT) by c.20%, to EUR 8.88/share, but we maintain our BUY rating, with upside of c.34%. Component availability remains the business’ key operational headwind, we believe. Recently, management noted that c.20% of orders are delayed due to a lack of crucial parts and, regardless of the full order book, deliveries will remain affected throughout 2H22E. As a knock-on effect, the extended delivery times are, in our view, impairing management’s flexibility to pass on the rising input costs. This is not only a HansaMatrix problem; we observe a similar trend at its smaller European EMS peers too. Regardless of challenges in the EMS space, LightSpace is pressing ahead with both the launch of its 3D headsets with medtech customers and with plans for a Toronto listing, likely by the year-end (HansaMatrix owns 67.7% of LightSpace). With the current levels reflecting only the value of the EMS business, in our view, the listing is a trigger to fully reflect the value of the investment in HansaMatrix’s share price; new and existing shareholders should be strongly incentivised to add to positions ahead of the fact, in our view.