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Record quarter, easy comps asideI-Tech delivered very strong Q2 results, with 91% organic growth, representing a record quarter despite easy comps. Growth was driven by I-Tech's top two customers, where CMP continues to demonstrate strong growth (+35% org. growth in H1) and the customer that previously had financial constraints has recovered and should now be at a stable run-rate, according to management. The gross margin held up at 59% (59% LY), which management attributes to production-cost work and price adjustments. Estimate changes and outlookWe raise '26e/'27e/'28e sales by 7%, on higher organic growth assumptions. We continue to expect support from rising CMP volumes and momentum among smaller customers (PPG, Jotun, Kansai Paints). On EBIT, we raise '26e/'27e/'28e by 23%, 13% & 9%, reflecting operating leverage on a stable cost base, albeit partly offset by the expected EOGRT study costs (SEK 10m, phased across '26e-'27e and weighted to '27e). Diversifying beyond SelektopeSelektope is on ~3,500 of ~110,000 vessels, with room in new-build and drydocking (the latter being ~10x larger and the key opportunity), and China under-penetrated. On the EU re-registration, a vote is likely in Q4, approval runs to end-'26, and a legal appeal is prepared. Separately, I-Tech entered a new market via a nature-derived antifouling additive for aquaculture net coatings, a ~20m-litre market (Western hemisphere) vs. the ~75m-litre ship-coatings market it addresses today, with faster qualification cycles and read-across to yachts and shipping over time. Notably it is not medetomidine-based and works through a physical rather than a biocidal effect. This is a genuine diversification from the Selektope regulatory risk, though sales remain years out. The company is trading at '26e-'28e EV/EBIT of 10x-5x & 15x-9x P/E, ~50-70% below peers. |