<a id="bm-comp-4e806e99-1613-4ea2-8e1d-709c89ec4b29" name="bm-comp-4e806e99-1613-4ea2-8e1d-709c89ec4b29" class="BMCustomAnchor"></a><table><tr><td bm-component-id="4e806e99-1613-4ea2-8e1d-709c89ec4b29" style="vertical-align: top; width:100.000000%;"><ul><li>We lower '24e revenue by 8%, but lift '26e by 28%</li><li>'25-'26 ambition of 30-40k units implies EPS of NOK 3.4-4.7...</li><li>...corresponding to PE ratios of 5.5-3.9x</li></ul></td></tr></table><a id="bm-comp-ba83ee20-c81c-47b8-abc7-3a649b4d549c" name="bm-comp-ba83ee20-c81c-47b8-abc7-3a649b4d549c" class="BMCustomAnchor"></a><table><tr><td bm-component-id="ba83ee20-c81c-47b8-abc7-3a649b4d549c" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3" style="text-align:left;"><font color="#000000"><font style="background-color:#ffffff;">Napatech expects several major design wins in 2024</font></font></h3><p><font color="#000000">As we expected, Napatech guided for 2024 to be an "in-between year" with revenue of USD 25m-26m, a decline of 1-7% y-o-y. More importantly, the company presented a very optimistic outlook for potential new design wins this year on the new IPU products. Management thinks it could land 4-6 design wins this year, resulting in total volume of 30k-40k units on a recurring basis, starting sometime in '25/'26. The company says it currently has a pipeline of ~30 customers, but these 4-6 are the ones that are closest to being signed. ASP and gross margin are still uncertain at this stage, but assuming an ASP of USD 3,000 and 50% gross margin would, according to our calculations, give an EPS of NOK 3.4 for 30k units (P/E 5.5x) and 4.7 for 40k units (P/E 3.9x).</font></p><h3 class="bm-h3"><font color="#000000"><font style="background-color:#ffffff;">We lift 2026e revenue by 28%</font></font></h3><p>We lower our '24 ests. to reflect the new guidance. However, we increase '26e revenue by 28% to DKK 479m, which lifts EBITDAC by almost 200% to DKK 93m, highlighting the significant operating leverage. In our new '26 ests. we have assumed 10k IPUs shipped compared to the company's ambition to ship 30k-40k. Hence, there is still upside potential to our 2026 ests. if the company reaches its ambition.</p><h3 class="bm-h3"><font color="#000000"><font style="background-color:#ffffff;">Fair value range of NOK 11-29/share</font></font></h3><p><font style="background-color:#ffffff;">To illustrate the range of potential outcomes, we present four long-term scenarios. In the first, we assume zero revenue from the new IPU products, implying a P/E of 49x. The other three, which assume varying degrees of success with the IPU product, would imply P/E ratios of 9.3x, 2.4x and 0.8x, respectively.</font> <font color="#000000"><font style="background-color:#ffffff;">Peers trade at 7.3-6.1x '24e-'25e EV/GP, corresponding to NOK 10-12/share. There have been multiple relevant M&A deals the last few years, at a median EV/Sales of 7.0x, which point to NOK 29/share. Hence, we arrive at a fair value range of NOK 11-29 (11-25).</font></font></p></td></tr></table>