Sintercast

In this fundamental analysis report, analysts Esther Wärnsby and Gal Teyar take a closer look
at SinterCast, a Swedish industrial technology company and the world’s leading supplier of
high-volume Compacted Graphite Iron (CGI) process control systems. CGI is a material
primarily used in heavy-duty vehicles, reducing engine weight by 10% while improving fuel
efficiency by approximately 8%. The market has punished the Company for temporary
headwinds, including a programme stoppage, weak heavy-duty vehicle demand and
regulatory uncertainty, which the analysts believe have been priced as structural deterioration
despite SinterCast’s intact pipeline and long-term technology relevance. Tightening emissions
regulations, including EPA 2027 and Euro 7, are expected to push OEMs towards
higher-pressure engines that require CGI, driving adoption to 80% of new heavy-duty
vehicles by 2030. With roughly 90% recurring revenue, limited CapEx and a largely fixed
cost-base, SinterCast’s asset-light licensing model provides significant operating leverage as
new programmes ramp up. Production is measured in Engine Equivalents (EEs), where one
EE equals 50kg of CGI castings. Based on the confirmed pipeline and regulatory tailwinds,
the analysts estimate production to reach 8m EEs by 2031, equivalent to 2.6x 2025 volumes
and SEK 272m in revenue. An equally weighted DCF and peer valuation yields a SEK 132
target price, corresponding to 26.5% upside.

Investment Thesis