27.05.2022 SunMirror AG CH0396131929
Original-Research: SunMirror AG (von Sphene Capital GmbH): Buy
Original-Research: SunMirror AG - von Sphene Capital GmbH
Einstufung von Sphene Capital GmbH zu SunMirror AG
Unternehmen: SunMirror AG
Anlass der Studie: Update Report
Half year 2021/22 figures impacted by one-off effects
After the publication of H1/2021/22, we maintain our Buy rating for the shares of SunMirror but cut our fully diluted PT to EUR 122.40 from EUR 194.70 per share given (i) lower peer group multiples, (ii) expected delays in the commissioning of the Australian assets, (iii) higher net debt, and (iv) higher discount rates not at least due to ongoing uncertainties about the takeover of Lat66. In H1/2021/22, SunMirror reported operating losses of USD -6.7m (H1/2020/21: USD -1.3m) and after-tax losses of USD -10.4m (H1/2020/21: USD 1.3m). Profitability was impacted (i) by the full depreciation of an exclusivity premium of USD 2.8m, which SunMirror has agreed to pay as part of the acquisition price for Finnish Latitude 66 Cobalt Oy (Lat66), and (ii) by the expiry of a right to repay a loan granted to Lat66 in the amount of USD 1.5m. Driven mainly by issuing a USD 4.2m convertible bond, the company's cash position improved to USD 2.8m by 12/31/2021 from USD 0.4m after 06/30/2021, while net debt deteriorated to USD 22.9m from USD 9.2m.
In April, SunMirror agreed with Latitude 66 a further 10-week extension to the outstanding takeover offer in respect of all of the outstanding ordinary shares of Lat66. For this extension, a loan of EUR 4m has been granted to Lat66 that becomes non-repayable if the takeover will not be completed. The Tender Offer will be extended to 21 June 2022. According to the company, more than 98% of all issued shares have been tendered by Latitude 66 shareholders.
We value the equity of the Dusseldorf Stock Exchange-listed company using a sum-of-the-parts valuation model based on a Net Present Value (NPV) entity model, in-situ values, and peer group multiples. We did not factor in any future acquisitions. Our price target is primarily driven by royalty schemes the company intends to generate from Cape Lambert North, for which we calculated an equity value of EUR 67.10 per share (base-case-scenario). We value Moolyella with EUR 30.30 per share, Lat66 with EUR 28.10 per share, and Kingston-Keith with EUR 6.20 per share. Together with net debt of EUR 9.40 per share, this approach calculates an equity value of EUR 122.40 per share. Higher grade potential at Kingston-Keith and Moolyella could represent substantial upside to our target price. Additional shortand medium-term upside potential could be identified, in our view, should the management decide for a trade sale of its most valuable mineral reserve, Cape Lambert, to a strategic investor or succeed in exploiting that asset in a capital-efficient manner. Upside to our price target could also arise, should the company use the proceeds from the capital increase for acquiring further strategic mineral assets significantly below market values.
Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/24293.pdf
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