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Original-Research: Cantourage Group SE - from NuWays AG

Classification of NuWays AG to Cantourage Group SE

Company Name: Cantourage Group SE
ISIN: DE000A3DSV01

Reason for the research: Update
Recommendation: Kaufen
from: 28.05.2024
Target price: EUR 10.00
Target price on sight of: 12 Monaten
Last rating change:
Analyst: Christian Sandherr

Debottlenecking production capacities

Topic: Cantourage and Portocanna entered into a strategic partnership which
offers Cantourage a capital light way to increase its production capacities
significantly amid the surging demand for medical cannabis in Germany.

Legalization light is transforming the market. As of the beginning of
April, cannabis is no longer being considered a narcotic in Germany,
notably simplifying dispensing by pharmacies and prescriptions by doctors.
Receiving a prescription for medical cannabis has become as easy as for
ibuprofen 600. With its own telemedicine platform, telecan°, and the global
supplier network consisting of more than 60 grower partners, Cantourage is
well positioned to benefit from it. This change can also be seen in sales
growth figures.

While Q1 (on preliminary basis) started out with "only" 26% yoy sales
growth to EUR 6.2m, growth in April (the first month following the changes
from the Cannabis Act) has already shown a significant acceleration to 160%
compared to last year. While we do expect growth to somewhat slow down, it
is seen to remain in the high double-digits throughout the remainder of the
year; eNuW FY24e sales +81% yoy. As a result, EBITDA should turn positive
following last year's EUR 500k loss (eNuW EUR 1.8m).

In order to facilitate the surged demand, Cantourage entered into a
strategic agreement with Portocanna,
a Portuguese medical cannabis processor. Thanks to its state-of-the-art
production facility, Cantourage
is increasing its annual processable capacities from currently 7-8t to
roughly 14t without having to significantly invest. Assuming an average
selling price of EUR 7.5 per gram, this should enables Cantourage to process
products worth more than EUR 100m p.a., in our view. Importantly, this
agreement also provides the company with additional flexibility in regards
to further scaling production capacities if needed during the next few
years.

Besides the additional production capacities, Cantourage is also able to
exclusively distribute Portocanna's own production line 'Hexacan', under
which Portocanna brings together the products of numerous growers from
Portugal and Spain.

Cantourage remains a BUY with an unchanged EUR 10 PT based on DCF.

You can download the research here:
http://www.more-ir.de/d/29917.pdf
For additional information visit our website
www.nuways-ag.com/research.

Contact for questions
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse.
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The issuer is solely responsible for the content of this research.
The result of this research does not constitute investment advice
or an invitation to conclude certain stock exchange transactions.

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