AKYLA
Equity Research
Special Industry Machinery — Laser Systems / Semicap
Initiation of Coverage — BUY
Last Updated: June 28, 2026
LPKF Laser & Electronics SE (LPKFF)
A call option on glass-core substrates: LIDE is the enabling glass-drilling step into the CPO/AI-packaging build-out, layered on a North Star margin recovery. We initiate with a constructive ~2x view to mid-2028.
Thesis
- LPKF is a small German laser-systems maker (FY2025 revenue EUR 115.3m, -6.2% YoY) that has become a direct call option on the glass-core-substrate / CPO-on-glass theme. Its LIDE (Laser-Induced Deep Etching) process is the enabling glass-drilling step for glass-core advanced packaging, and the FIRST LIDE production order was booked in Q1 2026 — the proof point that the optionality is becoming real.
- The 2026 revenue guide of EUR 105-120m EXPLICITLY EXCLUDES any Advanced-Packaging volume orders ('possible LIDE volume orders are deliberately excluded from forecasts as they depend on external qualification processes'). The glass/CPO ramp is therefore pure upside on top of guidance, gated only by downstream qualification timing.
- The base business is mid-restructuring. FY2025 EBIT was -EUR 13.5m (adjusted EBIT roughly breakeven at +EUR 0.8m); the North Star transformation program targets a 'double-digit EBIT margin by 2028.' Cost reductions are already visible in Q1 2026. Balance sheet is clean: ~EUR 10m cash, no bank debt, 73.2% equity ratio — the company can fund the LIDE ramp without dilution.
- PATH TO 2x: today's ~EUR 528m market cap roughly doubles to ~EUR 1.0-1.1bn by mid-2028 on two tied-out legs — (1) North Star lifts the ~EUR 120m base business to double-digit EBIT margin, and (2) a LIDE/Advanced-Packaging revenue layer of ~EUR 30-40m emerges as TSMC's glass-substrate mass production (planned 2028) and the Intel/Samsung/Absolics roadmaps pull through. ~EUR 155-160m of FY2028 revenue at a semicap-style ~6.5x P/S = ~EUR 1.0bn (~EUR 42/share). See the valuation bridge.
- Secular backdrop is exceptional: CPO market modeled to grow from ~$95m (2025) to ~$1.05bn (2034, ~31% CAGR), >800G transceiver shipments 2.6x in 2026, hyperscaler capex ~$725bn in 2026 (+77% YoY). Glass substrates are the chosen CPO platform for optical transparency and panel-level scale — and LIDE sits at the bottleneck.
Q1 FY27 Earnings Snapshot
Disclaimer
This is not financial advice.
This report is for informational purposes only and is not investment advice.
The Q1 2026 print was weak on the surface — revenue fell 32.4% to EUR 17.1m and adjusted EBIT was -EUR 5.7m — but the signal mattered more than the noise. Management characterized it as a 'solid start,' and two facts support that framing. First, order intake of EUR 24.1m delivered a 1.4x book-to-bill, a sequential inflection driven by Welding and a recovering order book rather than the depressed revenue line. Second, and decisively for the thesis, LPKF booked its FIRST LIDE production order in the quarter — the first hard evidence that its glass-drilling process is moving from sampling toward production within the glass-substrate/CPO supply chain. The revenue weakness is concentrated in Solar (FY2025 Solar -31% YoY to EUR 28.3m), the most cyclical and least strategic segment, and the one North Star is explicitly restructuring. FY2025 showed the same pattern: revenue -6.2% to EUR 115.3m, a reported EBIT loss of -EUR 13.5m, but adjusted EBIT roughly breakeven (+EUR 0.8m) and free cash flow positive at EUR 9.7m. The company enters its transformation from a position of balance-sheet strength: EUR 10m cash, zero bank debt, 73.2% equity ratio. That self-funding capacity is what makes the LIDE optionality a call option rather than a financing risk.