March 29, 2023

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The most important stocks for the next two years

By Apostolos Manthos

The financial results announced by Synergy Holding Group (CENER) for the year 2022 were very impressive from every angle, leaving a strong development imprint on profitability for the years 2023 – 2024. Even the significant increase in working capital amounting to 214 million euros against the amount of 41 million euros In 2021, which some people describe as “Al-Rashad”, is actually a particularly positive event, mainly because this means that the group is growing and growing at such a speed that it has surprised everyone until it pushed them on an incredibly positive trajectory to be able to cover the huge volume of projects that They carried them out, as well as those new projects that are “snatched” one by one from the hands of giant competitors.

Simply put, people who see what’s coming have taken the bait and hit the roof, at the same time building a second one much higher than what’s already there in order to handle the torrent of new orders. One of the characteristic elements of the huge increase in sales is the production backlog of 2 billion euros presented by the Group at the end of last year, practically as a larger figure, while in reality just six months ago, last June, it was almost halved to 1.1 billion euros. Of course, in the meantime he has produced and delivered products worth hundreds of millions of euros, but we have said that the speed of new projects he undertakes has surpassed any previous project.

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At the same time during yesterday’s session some hastily tried to apply the now outdated expression “sell the news” as the stock closed just under 300k shares at €3.855, posting a loss of -2.41% for the day. They did not raise but their eyes to look at the share of the group at the beginning of 2022 which was priced more or less around 4 euros with the only huge difference being that they were playing the results of 2021 where Cenergy made a net profit of 22 million. euros, while now it is 174% to reach 60.4 million euros. The group then had a net profit margin of 2.1% and now has double that at 4.2%. 106.41 million. At the time, the backlog of orders was past the door of 1 billion euros and has now risen to 2 billion euros and is pending for 2023. This doubling of fundamentals in just one year could easily define the present and so on. eda prices as a starting point for a significant rally in the medium to long term and not as a starting point for a pullback to chase the price drop from 0.10 to 0.20 euro.

From the current financial statements announced by Cenergy, I note four facts that could easily push the share price above €5 in the medium term.

The first of course is the backlog of €2 billion leaving a strong legacy of profitability for the current year.

The second is the very positive fact of increasing investments to expand production capacity mainly in the cable sector, in both submarine and terrestrial cables. They have already reached for 2022 79 million euros, while the management has announced another 80 million euros for the years 2023 – 2024 to be able to meet the increased demand for electricity, which will include a significant expansion in the case of the submarine cable technology plant in Corinth, thus doubling its production capacity and saving Additional storage capabilities, as well as extensive port facility upgrades. In addition to strengthening the factory in Corinth with the acquisition of a neighboring property, the group appears to have proceeded with the acquisition of an industrial property in Viotia, of 245,718 square metres. (with 49,673 square meters of premises and covered roofs) which will allow the Hellenic Cables subsidiary to expand its terrestrial cable production lines.

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The third is the strong recovery of the steel pipe segment and Corinth Pipeworks, as it appears that since the fourth quarter of 2022 it has begun to implement projects with improved profit margins. At the same time, adjusted EBITDA topped 2019 levels of €28m, while the segment returned to a net profit of €7.168m from a loss of €13.94m in 2021 hit by tariffs imposed by the then US Commerce Department.

And the fourth data with a strong bullish alert, the emerging giant cooperation with Ørsted on the establishment of a submarine cable factory in Maryland, USA. It is an event that, when successful, will radically change the strengths and dimensions of energy. So it looks like something is moving there as the group included in the €79m investment costs in 2022, there was also €6m set aside to support the construction of a submarine cable plant in the USA.

Charting now, the share of Cenergy Holding, after the necessary price reduction that seems to have taken place in the recent period of time mainly by short-term investors, both institutional and non-institutional, seems to be setting the scene for that. The next upward movement that will now lead it towards the level of 5 euros, thus giving a return of +30% from the current price levels. The strong sponsor in this movement is also the July bullish pivot “W” which gathers and pushes the stock to new highs, significantly increasing trading volume. However, statistically, in a chart analysis, when an upward pivot is also accompanied by the strength of fundamentals, it is a pattern that we have encountered in recent years in other listed companies with impressive results such as TERNA Energy, Mytileneos, AutoHellas, Quest, Profile, Epsilon Net and Plastics of Crete.

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Viohalco Mother Road (BIO) Have you seen the results?

A giant industrial group with a turnover of 7 billion euros and a consolidated EBITDA of 646 million euros, a capital of the board of directors of 1.162 billion euros (!) which “yesterday” should have received 1.8 billion euros.

* Apostolos Manthos is responsible for technical analysis and investment strategy