Hexagon Purus (Hold, TP: NOK7.00) - On track

The Q1 report came as a relief to the capital markets. With decent quarterly results, capacity expansion on track, and a still-supportive demand outlook, the industrial business case looks intact. That said, we note the still-high funding need. We reiterate our HOLD, but have raised our target price to NOK7 (6) on lower dilutive effects from assumed further capital raises after Friday’s share price rally. The stock continues to trade at an attractive 40–50% discount to other hydrogen equipment s...

Hexagon Purus (Hold, TP: NOK6.00) - Funding clarity wanted

With ongoing ramp-up at several of its factories, we expect activity in 2024e to be backend-loaded and forecast Q1 EBITDA of NOK-119m, 4% below consensus of NOK-115m. Although we like the company’s long-term business story, we continue to see a high funding requirement as well as funding uncertainty creating headwinds for the stock. We have cut our target price to NOK6 (11) on more dilutive funding and have downgraded the stock to HOLD (BUY).

Hexagon Purus (Buy, TP: NOK11.00) - Hit by delayed ramp-up and market ...

While we still view the long-term Hexagon Purus story as promising, we see delays to growth in 2024 (from a slower capacity ramp-up) and activity (from a sluggish hydrogen mobility market) that together with limited growth investments beyond 2025e has led us to lower our 2030 growth forecast. As a result, we have cut our target price to NOK11 (13), but reiterate our BUY. With a differentiated product offering that is more resilient to the soft green hydrogen market than its hydrogen equipment pe...

Hexagon Purus (Buy, TP: NOK13.00) - Capacity ramp-up taking longer

We see Hexagon Purus’s capacity expansion taking somewhat longer than expected due to delayed equipment deliveries, leaving us 19% below consensus on Q4 revenues and 9% below on EBITDA. We have also lowered our 2024e revenues by 15%, leaving us 12% below consensus. With 54% of consensus 2024 revenues being covered by the backlog and 3–9 months of lead time from awards to execution under the company’s long-term agreements, we see the potential for negative revisions. However, we reiterate our BUY...

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 t...

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Hexagon Purus (Buy, TP: NOK30.00) - Improving operational leverage

Despite stronger Q2 results than expected, the reiterated 2023 EBITDA guidance implies H2 will be slightly softer than we expected; therefore we have not made any material changes to our 2023e EBITDA following the beat. With a solid backlog and improving operational leverage, we have raised our 2024e EBITDA by 12%, while we see earnings approaching break-even in 2025. We view the valuation as attractive, with the stock trading at a ~60% discount to hydrogen equipment peers on 2023–2026e EV/sales...

Hexagon Purus (Buy, TP: NOK29.00) - Capex phase intensifies

We forecast Q2 EBITDA of NOK-117m, 4% below consensus. With the capacity expansion programme underway, some remaining payments for Wystrach, payments to Panasonic due during the quarter, continued investments in Cryoshelter and a weak NOK, we expect an uptick in capex, and forecast a quarter-end net cash position of NOK1.0bn, 6% below consensus. The stock is trading at a discount of almost 60% to hydrogen equipment peers on 2023–2026e EV/sales, which we consider unwarranted. We reiterate our BUY...

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Hexagon Purus (Buy, TP: NOK29.00) - Preparing for higher activity

With solid backlog coverage, a capacity expansion programme progressing as planned, a strong balance sheet, and supplier agreements in place, we consider Hexagon Purus well positioned for a likely significant increase in activity. With limited changes to our estimates and a slightly higher peer group valuation, we reiterate our BUY and NOK29 target price. The stock is trading at a 45-50% discount to hydrogen equipment peers on 2023–2026e EV/sales – on our calculations the stock price would need ...

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Hexagon Purus (Buy, TP: NOK29.00) - Expect a neutral Q1 report

We expect EBITDA of NOK-115m in Q1, in line with consensus. With a Q1 revenue forecast of NOK266m (9% below consensus of NOK294m), this corresponds to an EBITDA margin of -43%. We estimate a cash position of NOK1.4bn at quarter-end, 76% above consensus, which we believe does not fully reflect recent capital injections. We reiterate our BUY, but have lowered our target price to NOK29 (32) on a combination of a lower peer group valuation and a greater dilutive effect with a lower share price.

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 ...

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Hexagon Purus (Buy, TP: NOK22.00) - Growth story intact

The Q3 report was decent, with a strong consensus EBITDA beat. We particularly welcome the improved backlog visibility: the company has already secured purchase orders for ~65% of consensus 2023e revenues. We reiterate our BUY and NOK22 target price, based on our fundamental valuation, and consider the stock attractive, trading at a 52–61% discount to hydrogen equipment peers on 2022–2025e EV/sales.

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Hexagon Purus - Initiation of coverage - Hitting the gas

With a strong legacy from the Hexagon group, we consider Hexagon Purus a leading provider of hydrogen fuel and distribution systems, well positioned for industrial success. We expect a majority of medium-term growth to come from hydrogen infrastructure, which needs to be in place prior to the commercialisation of hydrogen-based transportation. We initiate coverage with a BUY and NOK22 target price, with the stock trading attractively at a 60–65% discount to hydrogen equipment peers on 2022–2025e...