Metacon extensive report: Positioning for long-term growth in green hydrogen

Metacon has assembled a complementary product portfolio and secured significant electrolyzer orders, thereby increasing revenue and acquiring valuable reference customers. While securing a few large orders enhances the likelihood of a commercial breakthrough, it does not guarantee a consistent order pipeline. However, given the strong long-term demand outlook for green hydrogen and Metacon’s increasing market position, we foresee potential for continued strong revenue growth. Supported by these drivers, we assess the stock's risk/reward profile as attractive. We are revising our target price to SEK 0.70 per share (previously SEK 0.30) and reiterating our Accumulate recommendation.

A distributor and manufacturer of green hydrogen equipment

Metacon offers innovative technologies and solutions for producing green hydrogen, aiming to make it more cost-effective through high production capacity and competitive pricing. The competitive landscape in the electrolyzer market is already extensive, particularly as governments and companies accelerate efforts to scale up green hydrogen production. In our view, Metacon's collaboration with PERIC effectively combines PERIC's proven technology and extensive history of research and innovation in electrolysis with Metacon's expertise and market knowledge in Europe. We therefore assess the company's overall competitiveness as strong, given the current market maturity.

Metacon operates in the green hydrogen market with strong demand drivers

The green hydrogen market is in a very early stage, with 2023 global electrolyzer capacity at 1.4 GW, far short of the 560 GW required by 2030 to align with Net Zero Emissions. However, a significant investment wave is currently underway. With tightening decarbonization targets and a growing need to reduce reliance on fossil fuels, demand for low-emissions hydrogen is increasing, particularly in hard-to-abate sectors such as basic industry and shipping, which Metacon focuses on. While the structural drivers are strong, Metacon’s products are capital goods, and their demand is highly sensitive to policy, subsidies, and long-term project financing.

We expect strong growth but acknowledge the high uncertainty in the estimates

We believe that Metacon’s revenue growth is accelerating, as the ramp-ups of already won projects will be completed in 2025/2026 and the company’s order intake continues to increase, consisting mainly of electrolyzer projects in the European market. For 2027-2032, we expect strong revenue growth (CAGR: 24%) to continue as Metacon’s new electrolyzer factory comes online. However, we acknowledge that the forecast risks are high, and this growth will naturally require a very strong strategy implementation and continued new customer wins. We expect EBIT to turn positive in 2027 with the support of revenue growth, and the company to carry out 250 MSEK worth of share issues in 2026 (previously 350 MSEK in 2025-2026). Given the strong order backlog, we do not expect raising financing to be a challenge.

Risk/reward remains attractive

Metacon’s valuation (2025-26e EV/S 2.5-1.3x) relies on expectations of very strong and scalable growth. By pricing growth at various rates and confidence intervals, we can justify the company's value at a wide range of SEK 0.27-1.13 per share (previously SEK 0.16-0.51). Our required return has decreased mainly due to increased revenue visibility and improved financing conditions from recent order development (WACC-% 15.5%, previously 18.0%), which has brought the range up. Risks are maintained by the uncertainty of the growth rate, which also affects cash development. However, customer wins continue to lay the foundation for growth and improve access to financing. With this in mind, we still find the risk/reward ratio of the share attractive.