Unior 9M18: Economic conditions for now still good for top line, however weighing on margins.
Net sales are up by 1.7% YoY in 9M18, as auto industry conditions are still good albeit volatile. In addition, the segment of speciality machines was weak in 3Q18 as well, not only in 1H18, but should be stronger in 4Q18 according to management, catching up. EBITDA is down 12.1% YoY while profit is down by 24.8%. Firstly, this is due to divestment of ski operator RTC Krvavec, which was divested in the beginning of 2018 and did not contribute to 2018. Secondly, input prices and wage growth are pressuring margins. From valuation perspective additional negative influence was lower peer multiples for industrial segment, plus shrinking margin, which were the main culprit behind lowering our target price to EUR 18.5 per share. True while we downgraded Unior to hold in 1H18 report due to increased market price, the later again lowered, opening an upside. However we believe current cyclical timing is not good for shares like Unior and we would stick with hold until cyclicals again start to bite.
Unior dd is a Slovenia-based company active in the industrial equipment sector. Its business is divided into five sectors: Forging, producing forgings for automotive, automotive chassis support parts, shafts for automotive engines, elements for drive-shafts and parts for transmission; Sinter, producing parts of steering mechanism for cars, metal marts for building hardware, sildes, rotors and housing for oil pumps, slide bearings and bushes, gears, sprocket wheels, pulleys, roads and flanges; Hand tools, offering wrenches, pliers, cutters, screwdrivers and bits, and hammers; Special machines , providing processing, facing, drilling and rotary indexing table machines; and Tourism managing tourist resorts in Rogla nad Zrece. As of December 31, 2011, the Company operated 20 subsidiaries and 12 affiliates worldwide.
ALTA Invest, investicijske storitve, d.d., (ALTA Invest, investment services, Inc.) is a part of ALTA Group, the biggest financial non-banking group in Slovenia. ALTA Invest has around 28% market share on the domestic Ljubljana Stock Exchange and has more than EUR 95m of assets under management.
Our trading advantage is our execution of large trading blocks with low impact on the market. We offer trading on several platforms on numerous markets, with a wide variety of financial instruments. Our advantage is also a research department, which is both sell side and buy side and has the far most extensive and regular coverage of domestic companies. We cover 9 companies on Ljubljana Stock Exchange, which is around 90% of Mcap on LJSE – and here we are practically the only local broker providing this kind of extensive and regular coverage for Slovenian companies.
A part of ALTA Group are ALTA Skladi, a mutual fund asset management company with roughly EUR 260m of asset under management. ALTA Group is also extensively involved in corporate finance projects and raised considerable assets (fixed income and equity) in the last two years for several companies.
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