The sales for Q1 came in at SEK14.3m (SEK12.3m), representing a y/y increase of 17% and a q/q decrease of 12%. The sales can be compared to our sales estimate of SEK14.6m. Moreover, operating expenses amounted to SEK-13.7m (SEK-13.3m) (including depreciation and amortization) compared to our estimate of SEK-15.3m. The operating expenses mainly consisted of selling expenses and administrative expenses, and we learned from the conference call that SenzaGen will continue to keep costs at reasonable levels. Lastly, EBIT came in at SEK-3.0m (SEK-4.6m) compared to our EBIT estimate of SEK-3.5m.

In January, Senzagen announced it had received a follow-up order worth SEK1.5m. The customer operates in the chemical industry and evaluated GARDskin in 2022-2023. The order investigates whether the customer’s new product candidates could cause skin allergies. Firstly, we highlight the order value. The average follow-up order value is often around SEK500,000; therefore, this order value should be considered high. Secondly, we highlight the returning customer. As mentioned, the customer has evaluated GARDskin during the past couple of years, and this order confirms the satisfaction of SenzaGen’s offering. GARDskin can handle complex mixtures that could be challenging in traditional testing; therefore, we are not surprised that the order comes from the chemical industry. In March, we learned that SenzaGen had received another order from the same customer. Once again, the order included testing with GARDskin and was worth approximately SEK0.8m.

We have only made some minor estimate changes that do not affect our fair value range, based on our DCF (Discounted cash flow) model between 2024e-2037e, applying a WACC of 14% and a terminal growth of 2% and a terminal EBIT margin of 31%. Our fair value range consists of a base case of SEK20, a bull case of SEK29, and a bear case of SEK6.5. The SenzaGen share is currently traded close to our bear case. We argue that the current share price is an attractive entry point for new investors and highlight that the company continues its road toward profitability and is currently valued at a solid EV/Sales multiple. Furthermore, we expect upcoming quarterly reports to act as potential triggers for the share which could decrease the current valuation gap to our base case during the next 12 months.