Metacon: Another major order builds good momentum

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 advances with key order

Metacon continues to advance its strategy as a manufacturer of large industrial hydrogen systems by securing a major add-on order from Motor Oil. While the recent add-on contract was largely expected from our side, we view it as a positive development and confirmation that the project is moving in the right direction. What did surprise us, however, was the timing of the order, which we had expected to come in late 2025. With this latest order, valued at 10.6 MEUR (~120 MSEK), the hydrogen plant will be expanded to 50 MW, making it one of Europe's largest electrolysis-based hydrogen production facilities. In our view, this marks a good achievement, especially considering Metacon's relatively small organization in the broader industry landscape. Furthermore, we believe that these two orders not only strengthen the investment case but also validate Metacon's technology.

We have raised our estimates

Although our previous estimates included the add-on order from Motor Oil, we expected it in late 2025, with minimal revenue for this year. However, with the order secured earlier, we now expect Metacon to recognize most of its value in 2025, leading increased revenue estimates. For 2026-2027, we have raised revenue forecasts, reflecting strong order momentum. However, since we previously expected the add-on order to contribute mostly in 2026-2027, the overall impact on revenue and bottom-line estimates is modest.

With this new order, Metacon will initially tie up more capital, as advance payments remain restricted and serve as collateral for bank guarantees. However, we expect these funds to become available around June/July 2025, which we estimate to be slightly later than the point at which current available cash reserves will be sufficient. As a result, liquidity will remain tight in the short term. Nevertheless, with these two orders secured and clear visibility on when the restricted capital will be released, we believe Metacon should be able to secure short-term project financing on reasonable terms, if needed.

Risk/reward still attractive at current valuation

Our estimated value per share ranges from SEK 0.08 to SEK 0.34, which is slightly higher than our previous range (SEK 0.06-0.22), mainly due to our increased estimates. This range is also supported by our DCF. In our view, with the recent large-scale orders in hand, Metacon is better positioned to achieve broader commercialization. However, uncertainty remains regarding the company's ability to secure additional large orders on a consistent and profitable basis. Given these factors, we increase our target price to SEK 0.16 (was SEK 0.12 ) which is still at the lower end of our estimated fair value range. This is based on the assumption that deliveries to Motor Oil proceed as planned and that order intake will continue to grow in the coming years. As the expected return slightly exceeds our required return, we reiterate our Accumulate recommendation.