Alelion’s Q1 report was largely in line with our expectations, where sales was slightly lower than expected, driven by postponements in deliveries (caused by component shortages). However, the gross margin was better than expected, driven by price increases kicking in during the quarter – coupled with raw materials being acquired previously at lower prices than current market prices. All in all, EBITDA came in slightly better than expected when adjusted for capitalisations.

We make minor estimate changes following Alelion’s Q1 report. We argue the main highlight from the report was the high gross margin driven by price increases which support margins going forward. We also find the reactivation of old immaterial property rights encouraging (software for optimising energy storage) – but this area holds long-term potential rather than near-term. In combination with postponed deliveries (due to component shortage), our EBITDA estimates are reduced by around 5% from 2023-2025 (adj. for capitalisations).

Alelion has previously, in a press release from March, announced that the work to secure the company's long-term financing is ongoing and that it will present a solution by June. This is in line with our expectations, as Alelion needs additional capital to fund its growth and working capital needs. We have previously expected a share issue to take place during H1 2023, and in this report, we update our assumptions which, in combination with our estimate changes, leads to a new fair value range of SEK0.1(0.1) – SEK2.0(2.5) per share with a base case of SEK0.8(1.0) per share.