Original-Research: INDUS Holding AG (von NuWays AG): BUY

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Original-Research: INDUS Holding AG - from NuWays AG

09.05.2025 / 09:00 CET/CEST

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Classification of NuWays AG to INDUS Holding AG

Company Name: INDUS Holding AG

ISIN: DE0006200108

Reason for the research: Update

Recommendation: BUY

from: 09.05.2025

Target price: EUR 34.00

Target price on sight of: 12 months

Last rating change:

Analyst: Christian Sandherr

FY'25e outlook reduced due to tungsten supply chains; chg. est.

Topic: On Wednesday evening, INDUS reduced its FY'25e guidance, especially

due to a soft Materials Solutions segment, which is impacted by the 10% base

tariff on US exports, effective April 5. Further, extended export controls

on tungsten compounds from China, put pressure on the supply chain of INDUS'

largest holding BETEK (16% of FY'24 sales).

Management changed its FY'25 sales forecast to EUR 1.70-1.85bn (previously EUR

1.75-1.85bn; eNuW old EUR 1.79bn) and adj. EBITA to EUR 130-165m (previously EUR

150-175m; eNuW old EUR 164m). Materials Solutions is expected to be

particularly soft partly due to the recently introduced tariffs on US

exports.

However, even more important in our view are extended Chinese export

controls on tungsten, tellurium, bismuth, molybdenum, and indium, effective

since February 2025. BETEK, a specialist in tungsten carbide wear solutions,

depends on tungsten-containing primary products from China and was

responsible for around half of Materials Solutions sales and 16% of group

sales in FY'24. China was responsible for 82% of the global tungsten

production in 2024 and is thus a critical supplier for the whole industry.

Whether an export license will be granted, to what extent and how long it

will take is currently unpredictable. If supply chains are not restored in

time, missing tungsten carbide could result in a EUR 20-40m revenue loss and a

EUR 8-15m EBITA reduction in H2'25e according to management. However, as a

recovery of tungsten carbide supply is currently still in the cards, the

top-line guidance was only adjusted on the lower end. In our view, a

noticeable impact for FY'25 looks highly likely and for FY'26 plausible.

Having said that, the case remains fully intact. Neither tariffs nor a

short-term supply shortage is damaging BETEK's competitive position based on

technological leadership in the long-term. Nevertheless, we reduced our

estimates, as we conservatively expect a supply shortage and price increase

of tungsten carbide to affect FY25e and FY26e.

Reiterate BUY with an unchanged PT of EUR 34 per share, based on FCFY'25e.

You can download the research here: http://www.more-ir.de/d/32526.pdf

For additional information visit our website:

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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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2133674 09.05.2025 CET/CEST

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