Gapwaves’ Q2 was weak, with net sales 30% below Redeye’s forecast and down 46% y/y. The decline mainly reflects SEK8m of non-recurring equipment revenue in the comparison quarter and lower project-based revenue. Costs were in line. The main event is the Frencken handover in China, where Gapwaves revealed Geely as Valeo’s end customer; details were few, which Redeye reads as progress without issues. On the negative side, Gapwaves highlighted that Sensrad was ‘significantly weaker’ as several headwinds appeared during the quarter. Although Gapwaves’ sales are volatile and still largely project-based, Redeye doubts investors will look past the lower sales and the Sensrad comments and expects a negative share reaction to the tune of 10-15%. The long-term story, however, remains intact.
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