Original-Research: LION E-Mobility AG - from NuWays AG

Classification of NuWays AG to LION E-Mobility AG

Company Name: LION E-Mobility AG

ISIN: CH0560888270

Reason for the research: Update

Recommendation: Buy

from: 04.03.2024

Target price: 10.50

Target price on sight of: 12 Monaten

Last rating change:

Analyst: Christian Sandherr

Large order from electric bus manufacturer

Topic: LION E-Mobility received a EUR 12m order for battery packs from

electric bus manufacturer KARSAN. Its ambitious growth prospects and recent

order momentum should leave room for additional battery pack orders in the


In detail, the EUR 12m battery pack order comprises EUR 6m in firm orders to be

delivered in FY24 as well as a EUR 6m floating component to accommodate the

evolving needs of KARSAN and the rapidly expanding market for electric

buses. LION expects the floating component of the order to also be

delivered in FY24.

KARSAN is a Turkish manufacturer of electric buses used for public

transportation that is mainly active in Europe (e.g. ~40% market share in

Luxemburg and Romania and 19% in France) but is also expanding its business

in North America and that is in the midst of entering Japan. According to

its FY24 targets, KARSAN plans to more than double its vehicle output to

1.2-1.3k vehicles compared to FY23. As the company does not have its own

battery pack production, it heavily relies on partners such as LION. We

hence expect further follow-up orders during the foreseeable future.

Newsflow to remain positive. LION is expected to release preliminary FY23

figures on March 21st. As already highlighted during the Q3 earnings call

in December, the company is seen to report EUR 25m sales in Q4 alone - a

significant sequential step-up (vs. 9M of EUR 29m). Throughout FY24, LION

should, report further larger order wins in its Mobility and Storage

segments (eNuW). The latter is seen to experience significant tailwinds

from the planned launch of a LFP-based battery pack during the second half

of the year.

After all, valuation remains very attractive. While 2023 should be seen as

transition year, FY24e looks set to be marked by (1) strong sales growth

(eNuW: 44% yoy) thanks to a running production and an increased sales

force, (2) LION turning at least EBITDA breakeven thanks to operating

leverage, (3) the launch of LFP battery packs and (4) further progress on

the LIGHT battery. Still, shares trade at a mere 0.5x EV/sales 2024e.

We hence reiterate BUY with an unchanged EUR 10.50 PT based on DCF.

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