DGAP-News: Schaffner Holding AG: Initiation of Coverage by Research Dynamics (News mit Zusatzmaterial)
(businesspress24) - DGAP-News: Research Dynamics / Schlagwort(e): Research Update
Schaffner Holding AG: Initiation of Coverage by Research Dynamics
(News mit Zusatzmaterial)
12.12.2013 / 07:30
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Schaffner Holding AG: Initiation of Coverage by Research Dynamics
Demand for Automotive products to spur revenue growth
The group has been experiencing robust demand in recent times for its
keyless entry antennas (24% CAGR over FY2010-FY2013) in automobiles due to
rising demand for advanced technologies and feature-rich cars globally. In
addition, Schaffner is also looking to explore opportunities in electric
vehicles (EV). With the rise in EVs, there are a variety of electromagnetic
interference (EMI) sources and receptors in automobiles and in the
environment in which they operate. Over the years, the group has developed
advanced EMC filters and specialized power magnetic components for electric
vehicles and is also investing substantially in this division. According to
the company, the addressable market opportunity per car for Schaffner's
products is as much as EUR100 (about CHF120), thus putting the addressable
market opportunity at CHF330mn by 2018.
Improved utilization coupled with cost rationalization to boost margins
Schaffner has undertaken various initiatives over the past few years to
boost margins - these include implementation of lean principles, shifting
production centers to low-cost countries and improving supply chain
management. The group aims to cut its annual production cost by around
CHF2.4mn on the back of these initiatives. The improvements in operational
excellence were in the past wiped out by the China's rail sector (PM
division) crisis. Now, however, with China's improved rail dynamics and
shifting of focus to other rail markets, the Shanghai plant utilization has
shown considerable improvement. Consequently, we expect Schaffner to record
a group operating margin of 9.9% in FY2015 from 4.8% in FY2013.
Robust FY2013 results and positive outlook
Sales grew by 10% y/y to CHF195mn, with positive growth across all the
divisions. At the same time, EBIT margin expanded by 70bps y/y to 4.8%
underscoring the benefits of ongoing operational excellence measures.
FY2013 results, reported on December 10, indicate that the measures put in
place by management are starting to bear fruit and we expect the results to
improve further in future.
Trading at a significant discount to peers
Unlike in the past, currently Schaffner is trading at a discount of around
27% on both EV/EBITDA and EV/EBIT, and 30% on P/E basis to its product
peers. Similarly, the group is trading at a discount of 21%, 25% and 23% on
EV/EBITDA, EV/EBIT and P/E basis to its industry peers. Given the expected
robust growth in sales driven by the Automotive division, and expanding
operating margins, we believe a discount to its peers is unwarranted.
Ende der Corporate News
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Zusatzmaterial zur Meldung:
Dokument: http://n.equitystory.com/c/fncls.ssp?u=YGHOFURGQE
Dokumenttitel: Schaffner_Initiation of Coverage_Research Dynamics_12
Dec 2013
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