We update our EBIT estimates for ‘21e and ‘22e by 9% and 80%, respectively. The reason for the big revisions are twofold: 1) we have updated our expected deliveries of PWR BLOKs from 14 to 27 during ’21e and ‘22e; 2) we had previously assumed a price of EUR 600K per unit, but now expect pricing to be around EUR 750K (in line with the pricing indicated by the Richards Bay Alloy agreement). It is unclear when Swedish Stirling will start to deliver on its current orders, but we expect it is likely to see deliveries during H2’21. This is due to the six-month delay resulting from the preventative measures the group took back in early April 2020 following COVID-19.
Fair value range up to SEK 9-30 (SEK 5-14)
On the back of higher estimates and updated DCF scenarios, we raise our fair value range to SEK 9-30 (5-14). When we initiated coverage, we highlighted that one of the main risks was acceptance of the technology, but with several agreements entered since then, we now consider that a smaller threat. What remains is proof of Swedish Stirling’s ability to ramp up the PWR BLOK for serial production, which is key to meeting the strong and growing demand.
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