We believe Metacon started the year on a solid footing, driven by increased execution of its order backlog and an improved operating loss. While we view these developments as clear positives for the quarter, we continue to place significant emphasis on order intake, as a steady flow of new contracts is essential for the company to ultimately achieve self-funded growth. Although the company provided improved visibility into its sales pipeline in connection with the Q1 report, indicating that activity levels remain strong, we have yet to see these discussions translate into concrete orders. As a result, we believe forecast risk remains elevated and have therefore adopted a more cautious stance in our near-term estimates. Nevertheless, this has a modest impact on our long-term estimates, and we therefore maintain our target price at SEK 0.40 per share. However, given the recent surge in the share price, we lower our recommendation to Accumulate (previously Buy). Overall, we still see an attractive risk/reward profile at current valuation levels, with expected returns exceeding our required return.

Another solid quarter of growth

Metacon’s Q1 revenue amounted to 73.5 MSEK, representing a strong increase of 47% compared to the same period last year. The revenue was only slightly below our expectations in absolute terms and was mainly driven by increased deliveries in ongoing electrolysis projects in Greece, Romania, and Morocco. Overall, project timelines seem to remain largely intact, which we view as positive given that payments are tied to milestone achievements. While Metacon’s Q1 gross margin was below our expectations, reflecting a change in project mix, operating expenses developed largely in line with our expectations. However, following the consolidation of Botnia Hydrogen, the Group recognized 5.8 MSEK of negative goodwill as other income, resulting in EBIT coming in above our expectations. However, underlying operating profit was largely in line with our estimates in absolute terms. All in all, we believe the underlying EBIT improvement was encouraging and demonstrated a clear trajectory toward profitability as the revenue base continues to expand. Metacon’s cash position at the end of Q1 amounted to 72.1 MSEK, of which 28.2 MSEK was restricted cash. In addition, after the end of the quarter, Metacon has received around 44.4 MSEK in additional payments related to the Motor Oil project, which we believe should provide sufficient near-term liquidity. Going forward, we believe financing needs will largely depend on how quickly the company can convert its sales pipeline into firm orders.

Estimates reduced on slow order intake

We have lowered our short-term estimates as the order intake has been weaker than our expectations in the latest quarters. While the company sees many projects of varying sizes moving forward and has good opportunities to win new contracts, we have not yet seen any concrete orders materialize. As a result, we have taken a more cautious stance in our revenue estimates for mainly 2026 and 2027. Lower revenue estimates have also resulted in a higher estimated operating loss for 2026-2027, though since Metacon's costs are largely variable and scale with revenue, the difference in absolute terms is not significant.

We still view the risk/reward ratio as attractive

In our view, the fair value of Metacon’s share with the current assumptions is around SEK 0.14-0.71 per share, which is largely unchanged since our last update. We believe Metacon’s stronger order inflow in recent years improves its position for broader commercialization, but uncertainty remains regarding its ability to secure large orders consistently and profitably. Given these factors, we keep our target price roughly in the middle of our fair value range at SEK 0.40 per share, and we still see an attractive risk/reward profile at current valuation levels, with expected returns exceeding our required return.