Analysis Hexicon: Long-term value becomes visible in 2023

Detta är en betald analys på uppdrag av Hexicon utförd av Analysguiden.

Potentially important breakthroughs
2023 is set to be the year when Hexicon proves the long-term value of the business by achieving two breakthroughs:

1. Significant revenue from partial divestments in the global project portfolio, which enables full speed ahead in project development and the own patented technology without the need for additional capital raising.

2. Agreement with financing partner for the first plant with proprietary technology. The contracted revenue level for electricity produced and the main permits are already in place.

These two potential successes would both highlight the value of the total project portfolio, which has grown significantly since the IPO, and give credibility to the technology and its potential to capture a share of the rapidly growing floating wind power market.

Positive developments in Italy
With its total project and prospect net capacity of 9 GW, Hexicon is the largest player in the country, which is now investing heavily in offshore wind power. The company has quickly gained preferential access to water areas of 2.5 GW and was recently given the green light to connect these and other areas to the grid. Projects in this market are expected to be partially divested during the year. Like Hexicon’s other large markets, South Korea and Sweden, Italy is also unregulated. Hexicon has the strongest competitive advantages in this market environment as the regulated markets typically become very capital-intensive in order to run comparable projects.

Financial position and cash flow
Hexicon is now in a phase where partial divestments are a prerequisite for business development, given the current plan to avoid a new share issue. Cash flow in Q4 was MSEK +31 due to the convertible share issue of MSEK 82. Cash amounted to MSEK 87, compared with MSEK -53, which was the cash flow excluding financing items, and this included investments of MSEK 36. Hexicon can keep the burn rate and investments down somewhat in Q1/Q2, but revenue from project divestments is part of the plan for the year’s first half.

Analysguiden assumes that Hexicon succeeds with the breakthroughs mentioned above and achieves a positive result already in 2023 thanks to major capital gains from the projects. However, it is worth noting that both the divestments’ timing and scale are uncertain.

The target price remains unchanged at SEK 4.

Note: A Swedish version of this report was published on March 13th.