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Original-Research: Cantourage Group SE - from NuWays AG

20.12.2024 / 09:00 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group.
The issuer is solely responsible for the content of this research. The
result of this research does not constitute investment advice or an
invitation to conclude certain stock exchange transactions.

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Classification of NuWays AG to Cantourage Group SE

Company Name: Cantourage Group SE
ISIN: DE000A3DSV01

Reason for the research: Update
Recommendation: Buy
Target price: EUR 12.00
Target price on sight of: 12 months
Last rating change:
Analyst: Christian Sandherr

Cantourage entering the Polish market; PT up

Cantourage entered the Polish medical cannabis market through its first
export of high-quality craft cannabis, establishing a long-term partnership
with the Polish wholesaler PharmaVitae. PharmaVitae is one of the leading
medical cannabis wholesalers in Poland with a strongly growing pharmacy
network, which comprises 1,200 locations vs. 400 at the end of last year.
The distribution partnership will begin with one of Cantourage's most
popular strains, Mac1, but will be expanded in 2025 to include additional
products from its product portfolio (e.g. a larger variety of flowers).

Entering the Polish market through the distribution partnership bodes well
with the company's strategy of expanding to so far underserved markets with
high growth potential. While the Polish medical cannabis market is still at
an early stage, it is poised for rapid growth during the next few years as
regulatory frameworks improve and awareness increases. In 2023, the country
recorded roughly 30k patients as well as a market volume of 4.5t. The latter
is expected to grow at a ~40% CAGR until 2028, implying a total addressable
market of EUR 200-250m.

While we expect some EUR 4-5m sales from the Polish market for FY25e, it has
the potential to generate more than EUR 20m sales annually during the next 3-5
years, in our view, becoming the third core market following Germany and the
UK.

Cantourage to report a blow-out FY24e. As per its recently raised FY24e
guidance and the operational update from November (EUR 7.2m sales that month
alone), the company is on track to record more than 100% yoy sales growth
(to EUR 49m) while improving the EBITDA margin by some 8.5pp yoy (eNuW) thanks
to the favourable regulatory changes in Germany at the beginning of April.
This underpins the scalability of the group's business model. In fact, we
expect margins to further improve to 12.6% by FY26e as sales continue to
grow at a >30% CAGR.

Threats from political uncertainties limited. As more conservative parties
are likely to gain power in the upcoming election in Germany (end of Feb.),
which have historically opposed a broader cannabis legalization, especially
on the recreational side, i.e. cannabis clubs and growing own plants. As
Cantourage is only active in the medical space, we regard the risks to its
business model as limited.

We confirm our BUY rating with a new EUR 12.00 PT (old: EUR 11.50) based on DCF.

You can download the research here: http://www.more-ir.de/d/31581.pdf
For additional information visit our website:
https://www.nuways-ag.com/research-feed

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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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss
bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben
analysierten Unternehmen befinden sich in der vollständigen Analyse.
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2055299 20.12.2024 CET/CEST

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