Exel's Q1 figures were broadly below our expectations due to the timing of deliveries. However, on the day of the results, the spotlight was stolen by the company's planned rights offering of a significant size to strengthen its balance sheet and accelerate its strategy. We expect the offering to result in a significant dilution of the current share series and potentially put selling pressure on the stock. In light of this and the still uncertain earnings turnaround, we see the stock's risk/reward ratio as unsatisfactory in the short term, although we believe the financing gives the company room to execute on its strategy.

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