Inission: Solid growth despite component challenges - Nordea

Inission delivered a decent Q2 report with strong sales and earnings growth, but negative cash flow due to working capital build-up. While the order backlog is strong, component shortages still pose a challenge and management does not expect an improvement until "possibly H2 2023". We lower our expected margin ramp-up slightly for 2022-24 and forecast a 13% net sales CAGR in 2021-24 and a 31% CAGR for adjusted EBIT (excluding Enedo). We update our DCF-based fair value range to SEK 30-41 (31-43). The lower end implies a 11.2% WACC (upper end: 9.6%) and a 1 pp drop in the EBIT margin. It is trading at 2023E EV/EBIT of 10x versus 11x for peers. Marketing material commissioned by Inission.

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