Analysis Clean Industry Solutions: Promising order intake

Detta är en betald analys på uppdrag av Clean Industry Solutions Holding Europe utförd av Analysguiden

Activity is high for the subsidiary Industrial Solar and we note a solid order book and several factors that contribute to a favorable macro environment.

Opportunities materialize in several different areas
The business for Industrial Solar, the largest subsidiary of Clean Industry Solutions Holdings Europe (CISH), is now increasing rapidly from a low level. Increasing energy prices, new legislation and the megatrend to reduce fossil fuels result in a strong macro environment. The company’s broad competence and holistic approach creates opportunities in several different areas. Interesting examples from recent months include.

• Losan Pharma GmbH placed an order for a photovoltaic system at two of their sites in South Germany. The plants have a total order value of 895 KEUR and will be installed within the first half of 2023.
• The company will do an engineering study (value 46 KEUR) at one of the largest textile suppliers to H&M, Arvind in India. This is the first phase before decision upon implementing a large concentrating solar collector field. It could potentially be an investment of several MEUR where Industrial Solar can play a major role.
• Industrial Solar was awarded 310 KEUR as part of a 3 MEUR artificial intelligence (AI) development project. The main goal of the project is to integrate AI-based tools in solar thermal systems for industries. Participation will in the long run support also the differentiation of Industrial Solar as an advanced supplier of renewable energy solutions.
• Several medium and smaller orders of photovoltaic system (PV) including a 200 KEUR photovoltaic fence. New legislation and Ukraine-crisis drives a boom in the PV market and price level is generally more attractive than in the past. The company sees great opportunities where PV is combined with other solutions such as heat pumps.
• Completion of an upgrade project in Qatar. Industrial Solar was responsible for the engineering, installation and integration of an ORC (Organic Rankine Cycle) turbine - including hydraulic, electrical and controls - into the existing Fresnel collector system.

Analysguiden elaborated in the last analysis around the company’s large sales funnel that, with only a low hit-rate, would mean a big step in sales. Above are examples that this now starts to happen and indicate a high long term potential.

Growing sales & increased base case
Operating income for CISH increased with 82% during H1 but was still at a low MSEK 6 level. A large portion of the current sales comes from energy concept studies which can lead to follow-up business and potentially larger orders. Sales is likely to increase even more during H2 with a slight improvement also for profit. Cash flow was during Q2 MSEK -2,4, same level as last year. Net cash was MSEK 6,6 in the end of the quarter.

Since the analysis early June, the share price has increased 58% to 3,84 SEK (Aug 23). Analysguiden then presented a fair value at 3,50 SEK. The strong order intake and macro environment have improved the outlook for 2023-2024. Base case is increased to 4 SEK with a fair value range at 3-11. Analysguiden estimates that new funding is likely during H2.