Equity Research Svenska Aerogel: Share issue to fuel growth
19 Dec 2023
On Monday, December 18, Svenska Aerogel (referred to as the “Company”) revealed its plans to conduct a fully secured rights issue totaling around SEK 51 million in Q1 2024. The subscription price for each new share is set at SEK 0.12. All Company’s board and management team members have expressed their intent to participate in the share issue through subscription commitments. Additionally, the Company’s primary shareholder, Patrik Björn, has agreed on both a subscription and guarantee commitment. The rights issue is fully guaranteed at 100%, comprising 28.5% through subscription commitments and 71.5% through guarantee commitments.
The Company has disclosed that the funds raised from the rights issue will predominantly be allocated to sales and marketing efforts targeting the customer segments of Construction & Property, Process Industry, and Transport. Furthermore, application and product development enhancements are planned, with an expected positive impact on production capacity.
Carlsquare Equity Research has a positive view on the rights issue and it aligns with our estimates provided in our research update following the Q3 2023 report where we anticipated that the Company needed to raise further capital in the near future. While the issue size aligns with our estimates, the subscription price is slightly lower than expected, resulting in a higher-than-expected dilution. Consequently, the share value in Discounted Cash Flow (DCF) model decreases from SEK 0.52 per share to SEK 0.46 per share. Simultaneously, the valuation multiples in the peer group have marginally decreased since the Q3 report. Consequently, we adjust our motivated value slightly downward to SEK 0.35 per share from the previous SEK 0.40 per share.
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