Slightly positive estimate revision for ‘19e

Three large orders confirmed in ’19 so far

Share price rally raises valuation

Previous outlook confirmed
We chose not to lower our estimates for ‘19e after the Q4’18 report and trust in Invisio’s management that the inventory build-up was a preparatory measure to meet large orders being pushed from ’18-’19. In hindsight, this turned out to be the right choice, and the number of large orders communicated so far in ’19 has even beaten our expectations. As such, the historically high inventory level of SEK 96m in Q4’18 was justified, as the order book now looks significantly more attractive for ‘19e. The market has rewarded Invisio for the positive news flow, and the share price has rallied approximately 22% YTD, further increasing Invisio’s valuation.

ABGSC ’19 expectations
In response to the announced large orders, we raise ‘19e sales by 1.3%, to SEK 446m, which reflects y-o-y growth of 25.9% compared to the flat ’18, which saw no large orders. We also increase ‘19e EBIT by 3.7%, to SEK 94m, which corresponds to an EBIT margin of 21%. Moreover, we have moved the majority of the full-year sales and EBIT to Q2/Q3, which is when the large orders are due for delivery. This results in Q1’19e being somewhat flat compared to Q1’18, with estimated sales of SEK 88m, or y-o-y growth of 5.0%. Furthermore, we expect Q1’19 EBIT of SEK 18m, which reflects an EBIT margin of 19.7%.

Valuation
As mentioned, Invisio’s valuation has increased rapidly in ’19 in conjunction with the positive news flow. At the current share price, Invisio is trading at a ‘19e EV/EBIT of 31.3x on our updated estimates. This is approximately 29% above the historical average NTM EV/EBIT of 24.2x.

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