strategy

The ECB's monetary policy meeting in Frankfurt is to be held on Thursday 8 September. What can we expect? The Governing Council normally meets twice a month at the premises of the ECB in Frankfurt am Main, Germany. The Governing Council assesses economic and monetary developments and takes monetary policy decisions every six weeks and bases its monetary policy decisions, including the evaluation of the proportionality of its decisions and potential side effects, on an integrated assessment of all relevant factors. This assessment builds on two interdependent analyses: the economic analysis and the monetary and financial analysis. At Thursday's meeting, a decision will be made whether interest rates will be raised again. When prices in European economy are rising too fast and when inflation is too high – increasing interest rates mey help bring inflation back down. The Governing Council may discuss another important step on the path to normalizing interest rates that was signaled at the previous meeting. This decision is based on the Governing Council's updated inflation risk assessment. Does economy data influence on hiking intrest rates? The European Central Bank has raised interest rates for the first time since 2011 in July '22 to tackle eurozone inflation that increased to 8.6% ta those oeriod. In a surprise move, the ECB pushed its base rate up by 0.5 percentage points, after economists had expected a smaller 0.25 point rise. The economy on the old continent is slowing down. This is due to high inflation, greater uncertainty and supply problems. These factors significantly obscure the prospects of our economy for this year and the following years. German Manufacturing PMI dipped to 49.1, down from 49.3 in July. It was a similar story for the eurozone Manufacturing PMI, which dropped from 49.8 to 49.6. After the publication of data from Germany the euro has weakened. The euro's fall to parity against the dollar for the first time in two decades also poses problems for the ECB – letting the currency fall exacerbates inflation, but the opposite approach could hit growth. Also, as of July 2022, the inflation rate in the European Union was 9.8 %. The current rate of inflation in the EU is higher than at any other time. High inflation has become the dominant concern of citizens in many countries. After this data, there is a high probability of an increase from 50bp to 75bp. Future interest rate decision will largely depend on the latest data. The initiative is aimed at helping to achieve the inflation target of 2% in the medium term. ECB’s Monteary Policy The pandemic and the war in Ukraine have fostered inflationary forces. So central banks have had to shift their focus from tackling low inflation to combating high inflation. The ECB’s monetary policy response to the higher inflation outlook can clearly be rationalised based on the new strategy – in particular its symmetric inflation target. The new ECB strategy has contributed to a more solid anchoring of inflation expectations at 2%. Monetary policy decisions taken by the ECB’s Governing Council since July 2021 have been firmly grounded in the strategy. In a rapidly changing world, the ECB’s monetary policy strategy will likely need to be reviewed and adapted more regularly. Source: Eurostat.com, Investing.com, ecb.europa.eu

Analyzing Tuesday's trades GBP/USD on 30M chart   On Tuesday, the GBP/USD pair displayed a significant rebound, which is difficult to explain from a fundamental or macroeconomic perspective. In addition, a new descending trendline has formed, which clearly passes through the three recent price peaks.   Thus, despite the British currency's growth, the downtrend persists. There was no macro data or fundamental background in either the UK or the US. Therefore, it is quite difficult for us to explain what caused the dollar's decline. However, technical corrections are still relevant, so the sudden growth shouldn't be that surprising. So far, nothing bad has happened to the downtrend.   The pound may fall as early as Wednesday, especially considering that the pair has already started to fall by the end of Tuesday. Moreover, there will be significant events and reports in the last three days of the week, which may prompt traders to buy the dollar again, regardless of their positions.     Several trading signals were formed on the 5-minute chart on Tuesday. The levels 1.2351 and 1.2367 will be removed from the charts. The levels 1.2307 and 1.2386 have been added, but they were not included in the signal formation process. The first sell signal was near the 1.2351 level. The pair managed to move down by only 15 pips, resulting in a loss when the price settled above the 1.2367 level. This same signal should have been executed using long positions, and the pair subsequently rose to the 1.2420 level and settled above it. The long position should have been closed when the price settled below this level. Immediately after that, short positions should have been opened, which should have been manually closed closer to the evening. As a result, the first trade ended in a loss, but the other two were profitable. Overall, novice traders made a profit. Trading tips on Wednesday: As seen on the 30M chart, the GBP/USD pair is generally moving down, but over the past week, we have seen more of a flat than a trend-driven movement. I expect the pound to fall further since it has not fallen enough yet. Breaking the new trendline may temporarily change market sentiment to bullish. The key levels on the 5M chart are 1.2171-1.2179, 1.2245, 1.2307, 1.2386, 1.2420, 1.2470, 1.2507-1.2520, 1.2597-1.2616. When the price moves 20 pips in the right direction after opening a trade, a stop loss can be set at breakeven. On Wednesday, there are no important events or reports scheduled in the UK, while the US will release the JOLTS report on job openings.   The market will only react to this report if the actual value significantly deviates from the forecast. Basic rules of the trading system: 1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal.     2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored.     3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading.     4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually.     5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel.   6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.   How to read charts: Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them. Red lines are channels or trend lines that display the current trend and show which direction is better to trade. MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines.   Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. Beginners should remember that every trade cannot be profitable. The development of a reliable strategy and money management are the key to success in trading over a long period of time.    

On Friday, there will be a few macroeconomic reports, but all of them will be very important. Neither the European Union nor the United Kingdom will issue data today. All the information will come from the US. There will be three reports, two of which are of the highest significance. Nonfarm Payrolls show the number of jobs created in a month outside the agricultural sector. This is a key labor market indicator. It is expected that 180-190 thousand jobs were created in May. Any number lower than this will be considered negative.       The unemployment rate is the second key labor market indicator. It is expected that by the end of May, the rate will increase to 3.5%. However, even 3.6% should not shock traders as it is still a very low value, close to the lowest one recorded 50 years ago. The average hourly earnings is the last report that will be issued today.   This indicator has a direct impact on the inflation rate. The annual increase in wages should not exceed the previous month's value. However, this data is less significant than the first two reports. Analysis of fundamental events:     There are no fundamental events planned for Friday. In recent days, both pairs have been showing a persistent desire to grow, which is not always justified by specific factors. If the growth in the euro makes sense, the pound's appreciation is raising many questions. However, the short-term trend has changed to ascending for both pairs. Thus, further growth can be expected unless the reports from the US are much stronger than the forecasts.   General conclusions: On Friday, there will be two important reports. Both of them will be published at the start of the US trading session. There will be no important events in the first half of the day. Also, yesterday, it was reported that the US House of Representatives approved an increase in the debt ceiling. Thus, there will be no default in the US. Yesterday's fall in the dollar was partially caused by this event. However, it is not logical. The market could have priced in the approval of the increase (since there were no other options, really), and now it could be benefiting from short orders. Nevertheless, we still expect a stronger drop from the euro and the pound.   Basis trading rules: 1) The strength of a signal is judged by the time it took to form the signal (a bounce or overcoming level). The less time it took, the stronger the signal is. 2) If two or more trades were opened around any level based on false signals, then all subsequent signals from this level should be ignored. 3) In a flat market, any pair can form a multitude of false signals or not form them at all. In any case, at the first signs of a flat movement, it is better to stop trading. 4) Trades are opened in the time period between the beginning of the European session and the middle of the US one when all trades should be manually closed. 5) In the 30-minute period, you can trade using signals from the MACD indicator only when there is good volatility and a trend, which is confirmed by a trend line or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered as a support or resistance area.     What we see on the chart: Price levels of support and resistance are levels that act as targets when opening buy or sell orders. Take profit levels can be placed near them. Red lines are channels or trend lines that show the current trend and indicate in which direction it is preferable to trade now. MACD indicator (14,22,3) is a histogram and signal line, that is an auxiliary indicator, which can also be used as a source of signals. Important speeches and reports (always included in the macroeconomic calendar) can have a significant influence on the movement of a currency pair. Therefore, during their release, you should trade with maximum caution or exit the market to avoid a sharp price reversal against the previous movement. Beginners should remember that not every trade can be profitable. A clear strategy and money management are key to success in long-term trading.      

The BoE is losing confidence in these surveys But June’s decision to lift rates by 50 basis points, having been hiking more gradually over recent months, showed that the wider BoE committee is losing patience and confidence in these forward-looking measures. The hawks would point to the survey question on "price growth", which shows firms consistently predicting inflation to be lower than what is actually realised, as the chart below demonstrates. The Bank has also produced interesting research showing that firms are resetting prices more regularly than in the past, which the hawks could argue shows that inflation is more ingrained than it once was. The reality is that the Bank is likely to pay less attention than usual to these surveys, and we think the next few policy decisions will be guided by CPI inflation, and to some extent average earnings, and not a lot else. We’ll get fresh data on the latter next week, and it looks like regular pay growth (which excluded volatile bonuses) will stay either flat or a touch lower on a year-on-year basis. The key question is whether the recent re-acceleration in pay growth is largely a function of the higher National Living Wage, or whether it reflects renewed underlying momentum in wage setting.   Realised price growth has typically been higher than what firms had expected   When it comes to CPI, we expect to see the headline rate dip to 8% in June’s numbers from 8.7% currently, and down again to 6.5-7% in July. But that’s mainly a function of lower electricity/gas prices and a reflection of the sharp rise in petrol prices we saw at the same time last year. We’d expect services inflation to notch slightly lower over the summer, but probably not enough to prompt another change in strategy among committee members. We therefore expect a 25 basis point rate hike in August and another in September – and we certainly wouldn’t rule out more. But ultimately we think the surveys, including the Decision Maker Panel, do contain some useful signals. And by November, we think the committee will have more confidence that inflation is indeed easing, to enable it to pause its rate hike cycle.

Analyzing Tuesday's trades: GBP/USD on 30M chart   On Tuesday, GBP/USD went through low volatility and messy movements. In general, the pound's movements were the same as those of the EUR/USD pair. The market reaction to the reports was also similar, except that the European ZEW indexes were not related to the British pound. However, it had its own data in the form of reports on unemployment, wages, and unemployment benefit claims. In our opinion, the pound should have fallen not risen in response to the British reports in the first half of the day, as two of the three reports turned out to be worse than forecasts. Unemployment increased, and the number of benefit claims was higher than expected. However, the wage report, which showed a sharp growth rate, tipped the balance. As a result, the pair continued to correct after rebounding from the 1.2620 level, but before that, it was in a sideways channel for two weeks and simply returned to it. We don't expect the pound to start an uptrend. GBP/USD on 5M chart   Several trading signals were formed on the 5-minute chart. The pair spent the entire day between the levels of 1.2688 and 1.2748, regularly rebounding from them. Volatility was 78 points. There is no point in analyzing each individual signal, as they were almost identical. Beginners had to decide for themselves whether they wanted to scalp between levels, the distance between which is 30-35 points. As we can see, the price regularly bounced from these levels, which means that none of them was unnecessary. We witnessed such a movement on Tuesday. Since most of the signals turned out to be right, it was possible to earn a decent amount, but we do not see much sense in opening 10 trades with a potential profit of 10 points each.   Trading tips on Wednesday: On the 30-minute chart, the GBP/USD pair may be in a flat position. However, we insist that the pound fall, as we still believe it is overbought and unreasonably expensive. Not all of this week's reports may support the dollar, so we may see messy movements in the sideways channel. The key levels on the 5M chart are 1.2499, 1.2538, 1.2605-1.2620, 1.2653, 1.2688, 1.2715, 1.2748, 1.2787-1.2791, 1.2848-1.2860, 1.2913. Once the price moves 20 pips in the right direction after opening a trade, you can set the stop-loss at breakeven. On Wednesday, the UK is set to release an inflation report, and this is the main item for the day. If it turns out that inflation is rising or falling more slowly than expected, the pound may jump.   Basic trading rules: 1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal. 2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored. 3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading. 4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually. 5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel. 6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.   How to read charts: Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them. Red lines are channels or trend lines that display the current trend and show which direction is better to trade. MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines. Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. Beginners should remember that every trade cannot be profitable. The development of a reliable strategy and money management are the key to success in trading over a long period of time.  

Overview of macroeconomic reports There are hardly any important reports on Friday. The euro area will release its final assessment of inflation for July, which is unlikely to differ from the preliminary assessment. Therefore, we do not expect any reaction to this data. The UK will publish a retail sales report, which is not that important. Therefore, we do not expect a strong market reaction to this report. Therefore, there will be no important events on Friday, and both pairs will likely continue their relatively weak movements. The pound is in a sideways channel, and the euro is in a weak downtrend.   Overview of fundamental events There is absolutely nothing to highlight among the fundamental events. No speeches by officials of the Federal Reserve, Bank of England, or the European Central Bank. Therefore, the market will focus on the macro data, but there are hardly any of those as well. It seems that we are in for another muted day.   Bottom line On Friday, we are expecting rather boring trades. We don't expect strong movements from either the pound or the euro, but that does not mean that they will not happen. Take note that the market can trade without reference to the fundamental and macroeconomic background. Main rules of the trading system: The strength of the signal is calculated by the time it took to form the signal (bounce/drop or overcoming the level). The less time it took, the stronger the signal. If two or more trades were opened near a certain level due to false signals, all subsequent signals from this level should be ignored. In a flat market, any currency pair can generate a lot of false signals or not generate them at all. But in any case, as soon as the first signs of a flat market are detected, it is better to stop trading. Trades are opened in the time interval between the beginning of the European session and the middle of the American one when all trades must be closed manually. On the 30-minute timeframe, you can trade based on MACD signals only on the condition of good volatility and provided that a trend is confirmed by the trend line or a trend channel. If two levels are located too close to each other (from 5 to 15 points), they should be considered as an area of support or resistance. Comments on charts Support and resistance levels are levels that serve as targets when opening long or short positions. Take Profit orders can be placed around them. Red lines are channels or trend lines that display the current trend and show which direction is preferable for trading now. The MACD (14,22,3) indicator, both histogram and signal line, is an auxiliary indicator that can also be used as a source of signals. Important speeches and reports (always found in the news calendar) can significantly influence the movement of a currency pair. Therefore, during their release, it is recommended to trade with utmost caution or to exit the market to avoid a sharp price reversal against the previous movement. Beginners trading in the forex market should remember that not every trade can be profitable. Developing a clear strategy and money management is the key to success in trading over a long period of time.  

EUR: Pendulum swings back to the dovish side EUR/USD handed back some of its early week gains – seemingly on inflation data that was not quite as bad (high) as expected, and the ECB narrative slowly appreciating the threat of slow-down. This came across in the ECB minutes yesterday and in a speech from the central bank's Isabel Schnabel. These developments took about 6bp out of the expected ECB tightening cycle, widened two-year swap rate differentials and softened EUR/USD. For today, we will receive some final August PMI numbers for the eurozone although the main focus will be the US NFP data. Unless some soft data can start to see the market reprice a deeper Fed easing cycle in 2024 (it looks like just 50-75bp is priced currently), it looks like EUR/USD will largely trade a range defined by the 100 and 200-day moving averages – at 1.0920 and 1.0815 respectively. Elsewhere, Switzerland released August inflation data this morning. The Swiss National Bank is still sounding hawkish and is probably still managing the nominal CHF stronger to keep the real CHF stable. EUR/CHF should be comfortable down in the 0.95-0.96 range.   

Total revenue in 2Q23 was PLN 36 million (-18% y-o-y, vs. PLN 34.4 million our expectations; PLN 32.2 million consensus), but there was a smaller share of materials and a larger share of sales revenue (PLN 34.3 million vs. PLN 17.5 million in 2Q22), EBIT was PLN 17.5 million (vs. PLN 11.2 million our expectations; PLN 10.3 million consensus), EBITDA of PLN 19.2 million (vs. PLN 13 million our expectations; PLN 12.1 million consensus), net profit of PLN 15.2 million (vs. PLN 9.9 million our expectations; PLN 8.9 million consensus), In 2Q23, in contrast to 1Q23, the company reported negative cash flow from operations - in 2Q2023 it amounted to PLN -25 million (vs. +17.6 in 1Q23), in the entire H1, cash flow from operations was negative at PLN -7.4 million, CAPEX in 1H23 amounted to PLN 6.7 million, Cash at the end of H1 2023 was PLN 38.5 million (vs. PLN 53.6 million at the end of 2022), Management maintained the guidance of expected revenues, while raising the expected EBITDA margin for the full year 2023 above 30% (vs. the previously expected margin of around 25%) - a level above our expectations, Mabion has successfully completed GMP validation and manufacturing of another (second) product under contract with Novavax - antigen against Omicron variant, and has completed technical batch production in the process of technology transfer for Kraken variant (Omicron sub-variant), In line with the 2023-2027 strategy, Mabion is carrying out the modernization process of its existing plant in Konstantynów Lódzki, scheduled for June-November 2023, including the installation of a set of bioreactors with conventional mixing technology and the replacement of 2 bioreactors with orbital shaking technology with 2 new ones with the same technology. We view the results positively, while noting that the guaranteed revenue from Novavax is until Q2 2024, after which the company must acquire new customers to sustain the level of generated results.     Revenues Total revenues in 2Q23 amounted to PLN 36 million (-18% y-o-y, vs. PLN 34.4 million our expectation; PLN 32.2 million consensus), of which the majority was sales revenues (PLN 34.3 million vs. PLN 17.5 million in 2Q22), and materials sales revenues amounted to PLN 0.6 million. Lease revenues amounted to PLN 1.1 million, a level similar to the previous quarter. For the entire H1 2023, revenues amounted to PLN 75.6 million (-8% y/y).   EBIT and operating expenses EBIT in 2Q23 was PLN 17.5 million (vs. PLN 11.2 million our expectations; PLN 10.3 million consensus), EBITDA was PLN 19.2 million (vs. PLN 13 million our expectations; PLN 12.1 million consensus), net profit was PLN 15.2 million (vs. PLN 9.9 million our expectations; PLN 8.9 million consensus). Cost of sales was PLN 8 million (vs. PLN 8.9 million in 2Q23), research and development costs PLN 1.7 million (vs. PLN 2.1 million in 1Q23) and general and administrative expenses PLN 8.5 million (vs. PLN 10.4 million in 1Q23). The company reported that the costs include PLN 1.2 million related to Mabion's development as a CDMO. Relatively high revenues and costs under control allowed the company to generate EBITDA of PLN 19.2 million, a level only slightly weaker than in 1Q23 (PLN 19.8 million) and above our and market expectations.   Summary after the earnings teleconference The following is our selection of information presented by management during the quarterly teleconference: The company is working on business development, at the moment the team already consists of 6 people and the final stage is the acquisition of an experienced person in the US, Talks with new customers are taking longer than the company would like; CDMO is a stable market, but requires patience in acquiring customers and building relationships; the company maintains the goal of acquiring its first new customer in 4Q23, but whether this will materialize is something management cannot answer at this point, Most of the potential new customers are companies developing biologic drugs at an early stage of development - in preclinical or early clinical stages, The sales process for MabionCD20 is still in the first phase, i.e. presenting the product to potential customers, which are large or very large companies, decisions are being made slowly, The company assumes continued cooperation with Novavax in H2 2024, i.e. after the guaranteed period, negotiations are underway with Novavax on this matter; management has stated the proportion of revenue it will aim for in 2024 - 2/3 from Novavax and 1/3 from new customers - this is in line with our forecasts - we assume about 29% of revenue from new customers next year, The plant's modernization is progressing faster than on schedule, so management hopes to see its completion in early December.

Bullish outlook - buying stock using ITM put options Dipping into the insights shared in our series, selling an in-the-money (ITM) put option emerges as a strategy to potentially acquire Adobe stocks at a discount.     Strategy: selling an in-the-money put option Trade setup: Action: SellToOpen Quantity: 1 Expiry: 15-Sep-2024 Strike: 550 Premium: $18.90 (per share) Premium and risk: Premium received: $18.90 x 100 (per contract) = $1,890 Max risk: Significant (potential obligation to buy the stock if it falls below the strike price) Max reward: $1,890 (retained premium if Adobe stays above 550 at expiry) Breakeven point: $550 (strike) - $18.90 (premium) = $531.10 Comparison with buying stock: This strategy can potentially allow you to acquire Adobe stocks at a discounted rate compared to the current market price, with the added benefit of premium retention  

At the same time, we maintain that in the medium/long term, the company may be a beneficiary of the increase in expenditure on power grids and the military area (references and certificates held). In its 2023-25 strategy, the Management Board has outlined that the company is targeting at least PLN 350m in revenue and PLN 10m in net profit at the standalone level (50-75% is to be allocated to dividends).   In light of the 2022 results and 2023 prospects, these targets do not seem demanding. At the same time, the company has struggled to stabilise results in recent years, which translates into a discount in valuation. Following the finalisation of the sale of Procom in Q4'22, work was underway to divest the Zeus subsidiary. The last report showed that the entity's situation was difficult (its value was written down to PLN 0.0m). Ultimately, Zeus' management filed for bankruptcy. Elektrotim's exposure is currently around PLN 3-4m (granted loan, guarantees on contracts and subcontract advance). Of course, Elektrotim will not be able to raise funds from the sale of the company (Zeus used to generate ca. PLN 30m in external revenues, which, assuming EV/Sales valuation=0.2x, would give a potential valuation of ca. PLN 5-7m), but it is cutting out the risk of adding funds to the company in the future (the company has been struggling with profitability for years, and it has been relying heavily on intra-group orders recently). We do not see any loss of major competencies within the group. Elektrotim is independently winning orders directly from the military sector.

Q4’23 preliminary sales and Q4’23 results preview, due on Apr 25 Preliminary sales results for Q4'23. XTPL reported Q4'23 sales estimates, according to which revenues from sales of products and services amounted to PLN 4.4m in Q4'23 vs. PLN 3.4m in Q4'22. Funds raised from subsidies amounted to PLN 0.7m in Q4'23 vs. PLN 2.9m in Q4'22 (only some of these funds will be included in the company's income statement). XTPL had PLN 27.1m in cash at the end of Q4'23 (vs. PLN 31.7m at the end of Q3'23). The company's management says the cash on hand will be sufficient to implement the 2023-26 strategy. The backlog as of January 19 for the delivery of DPS printers in 2024 is 5 units. Q4’23 results preview. XTPL is due to publish its Q4’23 results on April 25, 2023. We expect sales to increase y/y and q/q in Q4'23 (on y/y basis driven mainly by higher revenue from sales of products). We expect cost of sales to increase y/y due to an increase in the share of product sales in revenues. At the same time, we assume an increase in R&D as well as in general and administrative expenses due to the growing scale of operations. The above factors should translate into a y/y decline in EBIT/EBITDA in 4Q'23. Revenue. We expect revenue to increase by 6% y/y to PLN 4.55m. We are estimating sales of products and services in line with preliminary estimates published by the company, but we assume a much higher share products sale in sales-mix y/y. On the grants line, we assume recognition of about PLN 0.15m in Q4’23, representing about 21% of grants awarded in the period (the remainder should be recognized by the company as deferred income). Costs. We assume R&D costs to decrease y/y (we expect higher part of costs to be capitalized y/y), while we expect an increase in costs of products sold due to the assumed higher share of products sales in the sales-mix. We expect G&A costs to increase by 76% y/y to PLN 3.7m, which should result from business scale-up. Net profit. We expect a net loss of PLN 1.6m in Q4'23 vs. a net profit of PLN 0.1m in Q4’22. We assume the balance on financing activities at PLN 0.1m (mainly interest on cash held) vs. PLN 0m in Q4'22.     Opinion. NEUTRAL. Despite the y/y revenue growth, XTPL should report lower EBIT/net profit y/y in Q4’23, mainly due to increased costs (investment in further revenue scaling). The deterioration in the result is expected and is mailny due to XTPL's investment in the commercialization of its solution. Currently, the backlog for 2024 is 5 units of DPS devices; nevertheless, we ultimately expect sales of DPS devices to be higher than the 13 units recorded in 2023. In the medium term, investors' attention will be focused on the progress of industrial implementations of XTPL's technology and the expected first industrial deployment in 2024, which should al