04.06.2019 SBF AG DE000A2AAE22
Original-Research: SBF AG (von GBC AG): Buy
Original-Research: SBF AG - von GBC AG
Einstufung von GBC AG zu SBF AG
Unternehmen: SBF AG
Anlass der Studie: Research report (Anno)
2018 financial year closed with a solid operating performance and further cost structure improvement; Strong market positioning in the rail industry growth sector and current record order backlog enabling long-term profitable growth; Significant increase in profitability using economies of scale as part of the growth path pursued; Target price: EUR 3.85 (previously: EUR 3.62); Rating: Buy
The SBF Group generated revenues of EUR 14.7 million in the 2018 financial year, falling below the previous year's result of EUR 19.53 million due to consolidation phases. According to the company, the lowest revenue results are expected to be achieved after this decline, and as such, the company expects revenue and earnings figures to increase starting in the 2019 financial year. At the operational level, the company achieved an operating result (EBIT) close to the previous year's level at EUR 1.58 million (previous year: EUR 1.67 million) despite an expected decline in revenue. Net profits also grew slightly to EUR 1.39 million in the 2018 financial year due to an improved financial result (previous year: EUR 1.36 million).
In the course of publishing its consolidated financial statements (FY 2018), SBF announced that it had a high order backlog of around EUR 31 million (as at: March 2019) and other proposals were also pending. We assume that these proposals are several times the size of the current order backlog and thus open up further significant business potential. For the current 2019 financial year, SBF AG expects its core holding SBF Spezialleuchten GmbH to achieve a revenue of EUR 17 million and a profit before tax (EBT) of EUR 2 million.
After the consolidation phase of the last few years, the company is now in growth mode and is striving to expand its business model as a system provider for the railway technology industry. This is reflected, for example, in the high order backlog announced by the company and the planned investment initiative. Expanding the range of products and services offered, increasing vertical integration and increasing internationalisation are key elements of SBF's growth-orientated corporate strategy in pursuit of this objective.
As part of the adopted growth trajectory, the company should be able to profit from the increased investments that are expected to be made in the global railway technology sector. A study conducted by SCI Verkehr found that the current market volume for the global railway technology market is EUR 183 billion. Researchers expect an average future market growth of 2.8% (CAGR) for this segment by 2022. The planned regional expansion into new railway technology markets and the planned increase of vertical and horizontal integration should also have a positive impact on future business development.
On this basis, we expect a profitable growth phase to begin in the current 2019 financial year which, according to our calculations, should amount to EUR 17.7 million, EUR 19.5 million and EUR 22.4 million in revenue for the current 2019 financial year as well as 2020 and 2021 respectively. With strong revenue growth expected and developing economies of scale, net earnings should also rise significantly to EUR 1.43 million, EUR 1.6 million and EUR 2.13 million respectively.
Given the Group's strong market positioning and growth path, as well as the increased investments that are expected to be made in the global railway technology sector, we have evaluated SBF AG using our DCF model, leading us to calculate a fair value of EUR 3.85 per share (previously: EUR 3.62 per share). On the basis of the current share price level, we are expecting high price potential and have again awarded the shares a 'Buy' rating.
Note: In addition to the 2018 figures, which were slightly better than expected, we have increased our stock target price particularly based on the roll-over effect from systematically including the next estimate period in our valuation model.
Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/18233.pdf
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Elektrotechnik , A2AAE2 , CY1K , FWB:CY1K