* '26e-'27e EBIT up 19-15% * Entering 2026 with a simpler structure * '26e-'27e EV/EBIT of 21x-8x Capitalisation & operating changes DistIT's capitalisation has changed significantly following the recent capital raises, and we expect its absolute net debt to be maintained around SEK 100m as the company invests in more attractive inventory to raise profitability. This will likely become more evident in the upcoming quarter and during 2026. Moreover, the company's current structure, which largely consists of Aurdel and EFUEL, is simpler and significantly leaner compared to a year ago. Moreover, the company announced that it has entered a cooperation agreement with madHat, its largest shareholder, with respect to procurement and consulting services (an arm's-length deal, but subject to AGM approval), representing <5% of sales in its scope. We believe that the actions undertaken of late should aid DistIT in its return to growth. Positive estimate revisions We raise '26e-'27e sales by 6-8% and the corresponding EBIT by 19-15%, and continue to believe that the earnings power (potential EBIT) in a few years, assuming adequate capitalisation, should be ~SEK 70m annually. Assuming a relatively low debt load going forward, this should be able to generate distributable cash flow to shareholders. Implied valuation We note that DistIT has relatively lower exposure to electronics that contain memory chips compared to e.g. Fractal and Dustin, which trade at a blended average of 12x-9x '26e-'27e EV/EBIT. In comparison, DistIT is trading at 21x-8x for the same period. Given the low single-digit margins in the industry, the multiples are quite sensitive to the margin, and as such, a 0.5pp improvement in the '26e EBIT margin would reduce the corresponding multiple from 21x to 13x. Hence, a '27e multiple is likely to provide a more representative view of the underlying earnings power of the business.
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