Hexagon Purus ASA: Leadership Stability and Strategic Momentum Fuel Growth Potential

Hexagon Purus ASA (HPUR) stands at a pivotal juncture as it prepares for its Extraordinary General Meeting (EGM) on July 2, 2025. The meeting will vote on a critical governance shift: reinstating Jon Erik Engeset as chairman and transitioning Espen Gundersen to lead the audit committee. This move underscores the company's commitment to governance stability and strategic focus during a period of rapid scaling. Combined with its ambitious 2024-2026 financial targets, recent capital raises, and operational milestones, the leadership transition positions HPUR as a compelling investment opportunity ahead of the EGM vote.

Governance Stability: A Rebalance for Growth

Engeset's return as chairman marks a return to familiar leadership. Having previously served as chairman from 2020 to 2023, he brings deep institutional knowledge of HPUR's strategic direction and challenges. His reinstatement ensures continuity amid the company's aggressive growth phase, which includes expanding hydrogen storage and battery systems for zero-emission mobility.

Gundersen, stepping down as chairman but retaining his role on the board and audit committee, signals a strategic redistribution of responsibilities. His expertise in financial governance will now focus on oversight—critical as HPUR executes its capital allocation strategy. This bifurcation of roles reduces individual workload while maintaining a robust governance framework.

Financial Guidance: A Path to Profitability

The company's 2024-2026 financial roadmap is ambitious but achievable, anchored by three clear pillars:

1. Revenue Growth: HPUR targets 50% year-over-year revenue growth in both 2024 and 2025. Preliminary Q3 2024 results (NOK 544 million in revenue) align with this trajectory, driven by strong demand for hydrogen infrastructure and battery systems.
2. EBITDA Margin Expansion: The company expects a significant year-over-year improvement in EBITDA margins, with breakeven targeted for 2026. This aligns with operational efficiencies from optimized capacity utilization and reduced capital expenditure.
3. Cash Flow Positive by 2026: With a Q3 2024 cash balance of NOK 269 million and a NOK 913 million order backlog, HPUR is well-positioned to fund its growth organically.

Private Placement: Strategic Capital for Scale

In late 2024, HPUR secured a NOK 1 billion private placement through the issuance of 145 million shares. Major investors, including Hexagon Composites ASA (NOK 383 million) and Mitsui & Co., Ltd. (NOK 250 million), signaled confidence in the company's long-term prospects. The capital will fund operational improvements, reduce reliance on external financing, and ensure HPUR reaches cash flow breakeven by 2026.

Executive management participation—totaling NOK 1.8 million—further aligns their interests with shareholders, reinforcing commitment to the company's success.

Operational Milestones: Building a Sustainable Moat

HPUR's growth is underpinned by capacity optimization and market leadership:
- Hydrogen Storage Dominance: As a global leader in Type 4 cylinders, HPUR benefits from rising demand for hydrogen-powered vehicles, buses, and maritime applications.
- Battery Systems Integration: Its BVI segment, though smaller, offers synergies with hydrogen infrastructure, creating a holistic solution for zero-emission mobility.
- Efficiency Gains: The completion of multi-year capacity expansion by 2026 ensures scalability without excessive CapEx, preserving liquidity.

Investment Thesis: Buy Ahead of the EGM

The EGM vote on July 2 is a catalyst for HPUR's valuation. A successful outcome would:
1. Lock in Governance Stability: Confirm Engeset's leadership and Gundersen's audit oversight, reducing uncertainty.
2. Signal Investor Confidence: Major shareholders' participation in the private placement reinforces their belief in HPUR's execution capabilities.
3. Drive Earnings Momentum: With 2024-2026 targets already on track, a positive governance shift could accelerate institutional buying ahead of breakeven.

Risks and Considerations

• Execution Risk: Meeting 50% annual revenue growth requires flawless supply chain management and customer adoption.
• Market Competition: Rival hydrogen storage solutions and battery technologies could pressure margins.
• Regulatory Hurdles: Geopolitical shifts or delays in zero-emission mandates might slow demand.

Conclusion: A High-Conviction Buy

Hexagon Purus ASA is a high-risk, high-reward play on the decarbonization theme. Its leadership transition, financial roadmap, and capital structure provide a solid foundation for long-term value creation. Investors should buy HPUR ahead of the EGM vote, with a target price tied to its post-breach-of-even valuation. The stock's current valuation—trading at ~10x forward revenue—offers asymmetrical upside if growth targets are met.

Action: Acquire HPUR shares before July 2, with a 12–18-month horizon. Monitor the EGM outcome and quarterly updates for margin improvements and order backlog growth.

This analysis assumes the EGM passes unanimously. Always conduct due diligence and consult a financial advisor.