| In the semi-annual financial report as of 30th June 2024, Convergenze recorded a value of production of € 12.10 million, attributed to the activities of its two Business Units: TLC (€ 5.56 million, representing 46.0% of the total) and Energy (€ 6.45 million, representing 53.3%), with other revenues of € 0.09 million (0.7%). The EBITDA for the period amounted to € 2.27 million, marking a sharp increase of 73.0% compared to the previous year (€ 1.31 million), with an EBITDA margin of 18.7%. EBIT followed the same upward trend as EBITDA, showing significant growth, reaching € 1.27 million compared to € 0.40 million in 1H23A. Net Income was also positive, amounting to € 0.61 million, up from € 0.05 million in the first half of 2023. In light of the results published in the 1H24A semi-annual report, we fully confirm our estimates for both the current year and the upcoming years. Specifically, we estimate a value of production of € 25.50 million for FY24E and an EBITDA of € 3.95 million, corresponding to a margin of 15.5%. We expect the value of production to increase to € 31.05 million (CAGR 23A-26E: 10.8%) by FY26E, with an EBITDA of € 5.75 million (EBITDA margin of 18.5%), growing from € 3.22 million in FY23A (EBITDA margin of 14.1%). We conducted the equity value assessment of Convergenze based on the discounted cash flow (DCF) methodology and the multiples of a sample of comparable companies. The DCF method (which includes a specific risk of 2.5% in the WACC calculation for prudential purposes) yields an equity value of €37.6 million. The equity value of Convergenze, using market multiples, amounts to €26.0 million (including a 25.0% discount). This results in an average equity value of approximately €31.8 million. The target price is €4.25 (unchanged), with a BUY rating and MEDIUM risk. |