Redeye maintains a positive outlook on Nanologica following its Q2 report. Production has improved 
and it seems that the company is poised for growth in the near term. While we mostly maintain our fair value range, we have made some adjustments to our estimates.

Q2 2024 - Soft sales but outlook suggests improvement in H2

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Nanologica

* Additional resources needed for production optimization and scaling, potentially requiring further investment.
* Limited geographic expansion beyond China, potentially constraining growth opportunities.
* Narrow revenue base and potential vulnerability to regulatory changes in the drug development and manufacturing industry.
* Risk of significant adverse impact on business prospects if additional production issues arise, given the company's early stage.

* Strong recurring revenue model with high barriers to entry and switching costs, providing stability and predictability.
* Positioned in a growing market with secular tailwinds, the surge of GLP-1 in obesity will benefit the company's offering greatly.
* Products contribute to the greater good by improving efficiency and reducing production costs for essential medicines.
* Close collaboration with customers for innovation, including developing tailored solutions to meet specific needs.

* Unprofitable with negative cash flows.
* Sales growth have accelerated in 2024 but new customers are required to reach anticipated target.
* Cost base remains high compared to the company's income levels.
* Given the negative cash flow the company relies on capital markets for funding and additional capital could be required if setbacks emerge.

* Recently reinforced balance sheet with outstanding warrants potentially raising more capital.
* Standing before a time of sharp anticiapted sales growth as more customer establish NLAB Siv/Saga into their production processes.
* We expect gross margins to establish around approximately 50% once the company has established a sufficient customer base.
* The company has previously stated an anticipated annual sales run rate of SEK100m in the near term.

* Historical challenges in consistently meeting targets and delivering on promises, with operations often extending beyond projected timelines.
* Limited track record of successful value creation under current leadership, with the company still in early stages of commercialization.
* Management and directors's track record remains unproven in terms of value creation in Nanologica given that the company is still at an early stage of commercialization.

* Nanologica’s board and management have broad sector expertise and provide the company with the know-how required to commercialize its purification media successfully.  
* Insiders with "skin in the game", including management and controlling owners, demonstrating alignment with shareholder interests and long-term commitment.
* Lean, decentralized organization promoting self-direction and accountability, with a well-defined strategic plan focused on value creation.

SEKm	2022	2023	2024e	2025e	2026e
Net Sales	1.6	1.4	49.2	139.1	232.2
Sales Growth	-88.0%	-7.1%	3308%	183%	67.0%
EBITDA	-39.0	-50.6	-20.8	28.9	68.9
EBIT	-50.9	-70.0	-39.3	12.6	48.3
EBIT Margin	-3270%	-4845%	-79.8%	9.1%	20.8%
EV/Sales	185	250	4.8	2.0	1.1
EV/EBIT	-5.7	-5.2	-6.1	21.5	5.4

Q2 2024 - Soft sales but on track to improve in H2

Improvements in production and indication of positive NLAB Siv customer evaluation

Forecasts and valuation

Key financials

Q2 2024 - Soft sales but outlook suggests improvement in H2