With the recent large-scale orders secured, we believe Metacon is better positioned to achieve broader commercialization. That said, we acknowledge the significant risks and uncertainties regarding the company’s ability to consistently secure large orders and maintain sufficient working capital to fulfill them. While liquidity is expected to remain tight until June/July 2025, when we anticipate the release of a significant portion of restricted cash tied to previously announced orders, we believe Metacon is well-positioned to secure short-term project financing on reasonable terms., if needed. With improved near-term revenue visibility, where our 2025 revenue estimates are largely backed by the existing order book, we believe the current valuation offers an attractive risk/reward profile. As a result, we reiterate our Accumulate recommendation with an increased target price of SEK 0.16 (was SEK 0.12), mainly due to an upward revision of our estimates.

Metacon’s Q4 report fell below our expectations, with lower-than-expected revenue recognition from the Motor Oil order and higher fixed costs. We acknowledge the significant risks and uncertainties surrounding Metacon’s ability to consistently secure large-scale orders and maintain sufficient working capital to fulfill them. However, at this stage, we believe the company is well-positioned to obtain additional short-term funding, if needed, on reasonable terms. With increased near-term revenue visibility, where our 2025 revenue estimates are largely covered by the existing order book, we believe the recent drop in valuation presents an attractive entry point. While we maintain our target price of SEK 0.12 per share, which is at the lower end of our acceptable valuation range, the current valuation offers an attractive risk/reward profile, as the share price has fallen by around -23% and the expected return exceeds our required return. Consequently, we raise our recommendation to Accumulate (previously Reduce).

Metacon will release its Q4 results on Wednesday. We anticipate a significant increase in revenue, primarily driven by the expected recognition of revenue from the large-scale order from Motor Oil. However, given the variable nature of raw material and consumable costs, which are expected to scale up with revenue, we believe EBIT will remain negative. In the upcoming report, we look for management’s comments on the demand situation and further insights into the company’s financial position.