Ferroamp - A winner on electrification and renewable energy
Provider of intelligent energy balancing solutions We estimate operational profitability in ’22 Fair value range of SEK 86-128, '22e EV/sales of 3. 0-4. 5x Improving power usage through its patented offering Ferroamp is a fast-growing cleantech company with its own patent-protected energy and power optimisation system for commercial and residential customers. The core of the system – the EnergyHub – is based on a patented technology and connects devices such as solar PVs, EVs, energy storage solutions and the utility AC grid to optimise the energy flow between DC and AC applications using its in-house developed algorithms.
As the electrification of society and the transition towards renewable energy together put pressure on the utility grid and energy demand, solutions such as Ferroamp’s that optimise customers’ energy flow become more necessary. The EnergyHub’s bidirectional inverter integrates all devices into one system, ensuring that 1) power peaks are levelled out, 2) energy losses are reduced and 3) customers can easily monitor and control the energy flow. Ferroamp has primary locations in Sweden’s major cities and has recently added international expansion on its agenda through its partners in Europe and Asia.
Operational profitability by ’22e; ~69% sales rise p. a. until ’25e We believe that the company is well positioned to benefit from robust growth drivers thanks to a strong market appetite for renewable energy, EVs and storage solutions.
These are also areas that are supported by regulatory incentives such as tax deductions. In addition, we argue that Ferroamp should start capitalising on economies of scale by outsourcing production and investing in a more solid sales unit, driving both revenue growth and profitability. We forecast a ’20-’25 sales CAGR of c.
69%, taking sales to SEK 1. 2bn, and expect the company to see profits by ’22, improving from EBIT of SEK -33m in ’20 to SEK 174m in ’25e. Initiating coverage – fair value range of SEK 86-128.
