Redeye updated its estimates and fair value range following Heliospctras Q3 2024 report, in which sales matched our forecast, but the margins and order intake were softer. With the new greenhouse solutions now in place, the focus is on ramping up commercialisation efforts to secure larger projects (exceeding SEK50m) for the 2025 greenhouse season. Our new Base case fair value is SEK1.2 (SEK1.3) per share.

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Heliospectra

* Less than 50% of existing revenues are recurring, potentially impacting business stability and predictability.
* Generates no profits and negative cash flow, which may lead to dilution of shareholder value through fundraising.
* Earnings affected by commodity prices, particularly electricity costs, which impact customers in the horticultural industry.
* Limited cyclical or capital markets independence, potentially exposing the company to economic fluctuations.

* Strong market position in Agtech segment with significant growth potential in greenhouses and vertical farming.
* Asset-light business model allowing for scalable growth without expensive reinvestment.
* Successful expansion into new geographic markets, demonstrating adaptability and growth potential.
* Benefiting from secular tailwinds in sustainable agriculture and advanced lighting technologies.
* Products designed for longevity, lasting over a decade and offering sustained value to customers.

* Heliospectra's operating margin is below the desired thresholds, suggesting potential profitability challenges.
* Revenue and earnings growth have been inconsistent and below industry averages, potentially signalling competitive pressures or market saturation.
* The company’s financial health indicators, such as current ratio and debt management metrics, fall short of recommended levels, raising concerns about liquidity and financial stability.
* Heliospectra does not demonstrate strong dividend performance or growth, which may be less attractive to income-focused investors.

* Operating Margin (EBIT) has increased for three consecutive years, indicating improved cost management and operational efficiency.
* The company has maintained low one-time charges to sales, averaging less than 3% over the past five years, demonstrating financial transparency.

* Limited gender diversity on the board, with less than one-third of seats held by women, potentially impacting decision-making and talent retention.
* Lack of significant insider ownership, with management owning less than 5% of equity, which may affect alignment with shareholder interests.
* Unclear track record of consistently delivering on promises and generating attractive returns on capital investments.
* Limited founder involvement in the business, which could impact the preservation of original vision and entrepreneurial spirit.

* Strong CEO leadership with deep industry knowledge and a clear strategic vision for long-term value creation and profitability.
* Lean, decentralized organization promoting accountability and innovation, with a focus on customer needs and adaptability.
* Commitment to innovation demonstrated through continuous product development and strategic partnerships in the horticulture industry.
* Presence of controlling owners with long-term commitment, aligning management interests with shareholders and fostering stability.

SEKm	2022	2023	2024e	2025e	2026e
Net Sales	25.7	35.3	34.4	80.1	120.2
Sales Growth	-26.9%	37.4%	-2.7%	133%	50.0%
EBITDA	-32.0	-19.8	-11.3	-3.4	18.4
EBIT	-36.0	-23.7	-13.8	-6.6	12.4
EBIT Margin	-140%	-67.1%	-40.2%	-8.3%	10.3%
Net Income	-36.1	-22.7	-13.8	-6.6	12.4
EV/Sales	4.4	1.8	1.1	0.5	0.2
EV/EBIT	-3.2	-2.7	-2.8	-6.6	2.4

Q3: Weaker gross margin and order intake, minor deviations elsewhere

Commercialisation focus for 2025

New Base case at SEK1.2 (SEK1.3) per share

Key financials