Navigating Commercialization: Initiating Coverage with a HOLD Recommendation and PLN 245.4 Target Price

On the road to commercialization

We initiate our recommendation on the company, recommending HOLD with a 12-month target price of PLN 245.4.

■ The company operates in four main business segments: 1) space (design, manufacture and sale of subsystems and systems used in the space industry - including the HyperSat satellite platform), 2) satellite data and UAV technology, 3) manufacture and sales of scientific and measurement equipment, 4) electronics manufacturing.

■ In general, we base our model assumptions on the commercialization of the HyperSat platform project, which we believe is the most important element of the Company's development strategy in the coming years. The first planned use of HyperSat platform will be the launch of the EagleEye observation satellite in 2024e on LEO. It will raise the level of readiness of the technology (TRL 9), which will enable the sale of the product on the market. The success of this project will be the most significant element of our projection, which, however, entails a high risk that the projected parameters will not be achieved and subsequent commercialization will become limited or impossible.

■ We conducted a scenarios (base, optimistic, pessimistic) analysis depending on the number of platforms sold in 2024- 29e. In the baseline scenario, we assume total sales of the space segment in '25-29e at PLN 963.3mn. This should translate into strong revenue growth in subsequent years and profitability at the operating level - in '25e we assume an EBIT margin of 12.3% (vs. negative in '22-'24e)

 

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