Original-Research: Cantourage Group SE - from NuWays AG
05.09.2024 / 09:02 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS Group AG.
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Classification of NuWays AG to Cantourage Group SE
Company Name: Cantourage Group SE
ISIN: DE000A3DSV01
Reason for the research:
Recommendation: Buy
from: 05.09.2024
Target price: EUR 10.00
Target price on sight of: 12 months
Last rating change:
Analyst: Christian Sandherr
FY24 guidance issued, growth to remain stellar
Topic: Cantourage issued a bullish FY24 sales growth guidance, carried by strongly increased demand for medical cannabis following the partially legalization at the beginning of April.
Cantourage expects FY24 sales of EUR 37-43m (eNuW: EUR 43m). Above all, the strong growth is driven by the partial legalization of medical cannabis in Germany at the end of April. With this receiving a prescription for medical cannabis became as easy as for ibuprofen 600. Cantourage is also recording strongly accelerating demand in the UK. Since April the group recorded continued sequential improvements, putting the upper end of the FY guidance well in reach, in our view. In August alone, Cantourage recorded sales of EUR 4.9m, a 189% yoy increase. During the first eight months of FY24, sales stood at EUR 24.9m (+62% yoy).
While management has only stated to be expecting a positive FY24 EBITDA, we remain confident that the company will be able to meet our EUR 1.8m estimate. This should be driven by the positive operating leverage and despite needed investments to facilitate the strong growth, including increasing production capacities at its processing site, broadening of its supplier network and start up costs for the partnership with Portocanna, a Portuguese medical cannabis processor.
Cantourage looks well prepared for strong growth beyond 2024. During the past two years, the company completed several initiatives which should enable sales of EUR 100m. It's global supplier network includes >60 growers, through which Cantourage can offer a broad set of flowers with little cluster risk. Thanks to the recently signed partnership with Portocanna, roughly 14t of flowers can be processed annually. Its own telemedicine platform, telecan°, puts the company in direct contact with patients, which can receive advice on cannabis therapies and obtain prescriptions in an uncomplicated manner.
Growth potentials supported by market developments. Several years after the legalization of medical cannabis in US states, the percentage of patients (vs. total population) reached roughly 4%. Applying similar assumptions to Germany, 3.3m patients seem possible (vs. 0.25m before April). Assuming consumption twice a week and an ASP of EUR 7.5/g, this would create a EUR 1.2-1.4bn market opportunity.
We confirm our BUY rating with an unchanged EUR 10 PT based on DCF.
You can download the research here: http://www.more-ir.de/d/30723.pdf For additional information visit our website: www.nuways-ag.com/research
Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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1981905 05.09.2024 CET/CEST
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