Original-Research: Noctiluca S.A. - from East Value Research GmbH

Classification of East Value Research GmbH to Noctiluca S.A.

Company Name: Noctiluca S.A.
ISIN: PLNCTLC00018

Reason for the research: Update
from: 20.05.2024
Target price: PLN 208.90
Target price on sight of: 12-months
Last rating change:
Analyst: Mateusz Pudlo

Noctiluca (NCL) continues to make progress in terms of both revenues from
proprietary materials and the number of commercialised patented families of
chemicals compounds. According to management, these are two key elements in
building value for companies like Noctiluca. To date, the company has 4
patent applications, with one patent granted. NCL is becoming a recognised
company in the display industry, allowing it to convert its Material
Testing Agreements (MTAs) into paid contracts. Important Joint Development
Projects (JDPs) with two leading display companies in Korea are still
scheduled to start in H2/2024E. In addition, Noctiluca is now going one
step further from being a pure chemical company and plans to develop a
complete OLED stack with its Taiwanese partner in order to create turnkey
solutions for its customers. Noctiluca aims to be the first company in the
world to have a complete printed electronics (IJP) offering by 2024E. The
last few months have brought a lot of good news for the OLED industry,
including news of Apple's planned full implementation of OLEDs in its
tablets and laptops. Taking into account the positive development of the IP
portfolio as well as the development of the OLED industry as a whole, we
maintain our valuation of Noctiluca at USD 81.75m (PLN 325.37m / PLN 208.90
per share), which implies an upside of 97.4%.

In Q1/2024, Noctiluca largely completed orders from 2023, resulting in
sales of materials of PLN 272k (Q1/23: PLN 2k). Operating expenses
increased by +95.7% y-o-y to PLN 2.45m, resulting in EBITDA of PLN -1.33m
(Q1/23: PLN -1.08m) and a net income of PLN -1.81m (PLN -1.19m). At the end
of Q1/2024, NCL had only PLN 519k in cash, but thanks to a financing
agreement for a loan of up to PLN 6m with Rubicon Partners (major
shareholder of Synthex Technologies), the financial stability is ensured
until the expected share issue in H2/2024E.

For the full year 2024E, we have lowered our revenue estimates to PLN 4.05m
(prev. PLN 4.67m), as our decision is motivated by the postponement of
three JDP to 2025E. We now forecast an EBIT of PLN -5.22m (previously: PLN
-4.6m) and a net profit of PLN -5.19m (PLN -4.57m).

You can download the research here:
http://www.more-ir.de/d/29821.pdf
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https://eastvalueresearch.com/.

Contact for questions
Adrian Kowollik
Email: ak@eastvalueresearch.com
Tel. +49 30 20609082

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