In this equity research report, analysts David Holm and Estelle De Geer take a closer look at BEWi, a Norwegian industrial company that produces packaging, components and insulation solutions made of Styrofoam. The analysts estimate a revenue growth CAGR of 18.9% between 2021-2025E as a result of increased demand stemming from EU’s climate targets, an integrated profitable business model and strong local market positions. An equally weighted DCF and peer valuation, with a target multiple of 11.1x EV/EBIT for 2024E gives a target price of NOK 72.3, indicating a potential upside of 41.8%.

Investment highlights:

  • Well-positioned to capitalize on market tailwind in a market with high entry barriers.
  • Local monopolies creating pricing power and resulting in a gross margin expansion from 59.3% 2021 to 63.4% in 2025E.
  • Proven M&A strategy and capacity to acquire additional EBIT of EUR 23.7m which expands EBIT with 16.4% by 2024E.

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