<a id="bm-comp-57a77355-1300-44a0-be10-706ec0a813b1" name="bm-comp-57a77355-1300-44a0-be10-706ec0a813b1" class="BMCustomAnchor"></a><table><tr><td bm-component-id="57a77355-1300-44a0-be10-706ec0a813b1" style="vertical-align: top; width:100.000000%;"><ul><li>Q3 EEs 2.7m, down 23% y-o-y, sales SEK 23.5m, down 28%</li><li>Softening commercial vehicle market drives 19-15% EBIT cuts</li><li>Increased cyclical headwinds, but underlying growth story intact</li></ul></td></tr></table><a id="bm-comp-b4e2e848-15fc-440c-856d-59c689466dd1" name="bm-comp-b4e2e848-15fc-440c-856d-59c689466dd1" class="BMCustomAnchor"></a><table><tr><td bm-component-id="b4e2e848-15fc-440c-856d-59c689466dd1" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Q3 expectations</h3><p>Yesterday, SinterCast issued a press release announcing that Q3 serial production amounted to 2.7m EEs, a 23% y-o-y drop. Sales came in at SEK 23.5m, down 28% y-o-y, of which we estimate 6pp to be FX-driven. Roughly half of the 0.8m EE y-o-y decline was due to the known shutdown of a 0.4m production programme in September '24; more importantly, a 33% reduction in commercial vehicle production impacted volumes by 0.57m EEs, although this was partially offset by a 0.15m EE increase in passenger vehicle and off-road production. Due to the negative mix effect of lower series-production revenue, and the company's significant operating leverage, we forecast an EBIT margin of 22.7%, down 17.9pp y-o-y.</p><h3 class="bm-h3">Estimate changes</h3><p>Given the lower-than-anticipated Q3 volumes and softening production forecasts from commercial vehicle OEMs, we cut '25e-'27e sales by 9-10%, which, given the company's high operating leverage, results in EBIT cuts of 19-15%.</p><h3 class="bm-h3">Company valuation</h3><p>The weakness that initially mainly affected the passenger vehicle segment of the automotive market has now increasingly spread to the commercial vehicle segment, with volumes in this market segment expected to be down by roughly 10% in '25e and flat in '26e, before recovering by around 10% in '27e. While the increased near-term challenges facing the industry prompt us to make significant estimate cuts for SinterCast, the underlying growth story of increased CGI penetration in the market remains intact, even if currently obscured by cyclical weakness. We adjust our fair value range to SEK 90-110 (100-120). The share is currently trading at a 2026e P/E of 23x, compared to its historical median of 19x.</p></td></tr></table>