In this equity report, analysts Markus Albert and Magdalena Nycander take a deep-dive into Swemet. Swemet is a Swedish company supplying smart grid and metering technology to electricity companies. A new market regulation in Sweden induces a high demand for Swemet’s products, resulting in a revenue CAGR of 21.4% between 2019 and 2023. Traded at 5.5x 2021E, a peer valuation indicates a potential upside of 49.2%.
- Sale of products will generate a recurring revenue ensured by high switching costs. The recurring revenue is estimated to grow from SEK 1.7mn in 2019 to SEK 13.4mn in 2023.
- In anticipation of the new market regulation, Swemet has built strong customer relationships through consulting and thereby gained market share.
- EBIT is expected to grow with a CAGR of 61.5% between 2019 and 2021 due to roll out plans for existing customers combined with the potential in international pilot projects.
To get the analysts’ full view, please see the report below: