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2022-12-21

Analysis Hexicon: Entering the next phase

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

Improved performance from 2023 onwards
All of Hexicon’s projects are expected to pass milestones in 2023, making divestment of the entirety or parts of the ownership a possibility according to the company’s strategy. The greatest values are currently in projects in South Korea, Italy, and Sweden.

Divestments will contribute positively from 2023 onwards. Hexicon believes that the company is now entering a new phase after having so far focused on building a diversified project portfolio in parallel with developing its TwinWind platform. In the next phase, divestments will be made, freeing up capital for investments needed to reach the ultimate goal of the business model: Profitable project development in parallel with licensing revenue from TwinWind technology.

Positive reception of capital raising
Q3 was the most investment-heavy quarter to date, mainly related to the increased ownership of the sizeable MunmuBaram project and technical developments. These investments contributed to a decrease in net cash to MSEK 46. The company needs additional capital pending project divestments.

On November 29, Hexicon announced convertible loans totaling MSEK 82 to existing shareholders and new investors. The capital raising model was favorably received and the share price rose about 25% in the morning. The rally then gained further momentum when the company announced that Vestas had been chosen as the preferred supplier of turbines to MunmuBaram. Overall, the stock rose 52% during the day.

Exciting 2023
The first significant divestments can clarify the great value of the project portfolio, which can help the market become aware of the diversified set of projects and prospects.

Important milestones await with, among other things, network connection agreements in MunmuBaram (indicatively in Q1), new rights to sea areas and network connection agreements in Italy (first half of the year) and applications in Sweden for three areas (the first in Q1). In addition, substantial progress is expected toward the first full-scale project for TwinWind, where the company has a guaranteed inflation-adjusted remuneration level for 15 years via this year’s auction win.

The target price is maintained at SEK 4.

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

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