Company: Compleo Charging Solutions
List: XETRA, Frankfurt
Market cap: € 35 MEUR at time of publication
Share price: € 7,50 at time of publication
Industry: Electric charging solutions
Market size: $25 Billion USD
It is no secret that we have been very worried about our position in Compleo Charging Solutions and that the company may even have been close to bankruptcy. We can happily report today that after reading the Q3 report with the new Compleo 3.0 strategy as well as participating on the earnings call we have increased our position and lowered our average price to 13 EUR per share. There does not seem to be a need for an external equity financing right now . Management leaves adjusted guidance for 2022 unchanged (sales estimated 105- 110 MEUR) and also guidance remains for 2025 560 MEUR).
The company’s new management has a clear picture on how to lower costs by the following path:
1. Decrease available products from 500 to only 5 with maximum 25 different versions. This will significantly lower R&D costs and also increase profitability. There is a focus on HPC chargers and the company recently got a prestige order from Deutsche Telekom.
2. The company plans to use factoring and to decrease inventories as well as cash in on current accounts receivables. There is a total of 60 M EUR in inventories/receivables to squeeze liquidity out of plus 17 M EUR in cash position. Strict profitable focus ongoing.
3. The company plans to either sell a minority or majority stake in their software division to unlock shareholder value. Before this is done they plan to use the software division as collateral for debt financing.
4. Increased customer satisfaction focus and after sales service.
These 4 paths combined should hopefully be enough for compleo to become breakeven by 2023 on a cashflow basis and profitable by 2024 ( ESGFIRE projection). We also had a question confirmed on the call asked by us that the high R&D costs are expected to decrease dramatically thanks to the reduced number of products. It may take a few months to see full effect on all these measures but the immediate threat of liquidation is gone and management admitted that the implementation of previous acquisitions had not been done properly. We feel convinced that the new management knows what needs to be done and how to do it!
Below is a EV/SALES multiple comparison of industry Peers for 2022:
Compleo Charging solutions : 0,33 X for
Chargepoint holding inc: 9,74 X (for 2023*)
Blink charging Co: 13,1 X
Wallbox NV: 6,09 X
Beam Global: 7.65 X
Volta Inc: 4.67 X
Garo: 4 X
Remember Investing 101
How a company is performing fundamentally does not always correlate with the stock price!
Link to full press release below :
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