YB new stock pitches (Tue, Jun 24)

Redeye has re-initiated coverage of Eniro Group (ENRO.ST), a Nordic marketing technology company that has transformed from a yellow pages provider to a digital marketing platform, with a Base Case price target of SEK1.26 per share, representing 200% upside potential. Eniro now generates SEK1bn in annual sales with a 15% EBITDA margin and holds a solid balance sheet following the resolution of its complex share structure. The company serves 50,000 SME customers (4% of the 1.2m Nordic market) with 84% annual recurring revenue and trades at just 2.4x 2025e EV/EBITDA. Key catalysts include a favorable Supreme Court ruling on the ongoing share dispute with Kapatens Investment AB, the potential spinoff of its Dynava contact center business, and continued quarterly performance improvements that demonstrate the transformation's success. Risks include the company's troubled history weighing on investor sentiment, high CEO turnover (though the current CEO has been in place for three years), competitive pressures from both large tech platforms and small agencies, and technological disruption. Eniro's business comprises Marketing Partner (61% of revenue, 91% of EBITDA) and Dynava (39% of revenue, 9% of EBITDA), with recent strategic moves including the launch of the Robin platform, a partnership with Azerion Group, and the acquisition of Finnish digital marketing agency Medialuotsi.

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Birchtech Corp. (BCHT), an environmental technology firm specializing in air and water purification solutions, is currently trading at $0.65 with a price target of $2.40 (+270%, fair P/E 12.3). The company is involved in multiple patent infringement lawsuits over its mercury emission reduction technology, with a pending verdict of $57-160 million against CERT-Defendants that could significantly boost its finances. Since 2019, Birchtech has secured 10 license or supply agreements with previous defendants, validating its patent strategy. Q1 2025 financials showed $3.2 million in revenue with a 38.3% gross margin (up 350 basis points year-over-year), and management has guided for at least $23 million in revenue for 2025, excluding potential patent litigation and water treatment revenue. The company is expanding into new markets, particularly PFAS/PFOS ('Forever Chemicals') removal technologies. CEO Richard MacPherson owns 13.2% of shares, demonstrating skin in the game. Key catalysts include the anticipated court ruling in the first half of 2025, while risks involve the costly and time-consuming nature of ongoing lawsuits and the stock's vulnerability to market fluctuations as a smaller company.

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Kusurinomadoguchi (5592.T) is a Japanese healthcare DX platform with three core segments: Media (pharmacy portal/apps with 37.3% market share), MOB (digital procurement for pharmacies), and Core Systems (healthcare software). The company leverages Hikari Tsushin's focus on recurring revenue and IRR-driven capital allocation, targeting 23% recurring revenue CAGR and 21% EBIT CAGR to reach ¥5bn by 2030. At 16x P/E and 9.9x EV/EBITDA for 20%+ growth, valuation remains attractive despite recent price increases. Key strengths include its market leadership (37.3% of pharmacies on the platform), low service penetration (only 1.7% of 420M annual prescriptions), potential for upselling to existing customers, and management's Hikari Tsushin pedigree. Risks include management execution, potential restructuring at parent EPARK, pharmacy industry consolidation, consumer adoption barriers, and regulatory changes to drug reimbursement rates. With a current ROIC of 22.8% and the backing of Hikari Tsushin (30% ownership), the company is positioned to become critical healthcare infrastructure in Japan.

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