Initial positive signs from important regional markets
​Following a weak FY 2016, PA Power Automation AG (ISIN DE0006924400, Basic Board, PPA GR) reports that 2017 has got off to a good start. Taking into account various uncertainties, the company anticipates an improvement in sales and earnings – in the best case, sales could come in at €8m, with earnings of €0.3m. Our calculations are more conservative: we estimate sales of €6.5m and negative EBIT. We see a “sales base†of €4m as relatively certain and also assume that PA will report a far better performance in some markets that were still causing problems in 2016 (USA, Turkey, China). Moreover, its strategic partner, Techmation of Taiwan, could also make a significant contribution to sales in H2. The level of receivables remains problematic in our view: the company does not have the ability to continue to provide pre-financing for customers on the same scale as before as it grows its business. It therefore needs to take counteraction. For this reason, we are currently not issuing a rating.
PA Power Automation AG. PA Power Automation AG is a Germany-based developer, manufacturer and marketer of personal computer (PC)-based computer numerically controlled (CNC) software and systems. Its customers are mainly manufacturers of machine tools for waterjet cutting, laser cutting and plasma and oxy-fuel cutting. The Company's product portfolio comprises the PA 9000 series and the PA 8000 series, as well as related Input/Output (I/O) modules, panels, and software tools. The Company operates through its development and production subsidiary Power Automation GmbH and the distribution companies Power Automation France Sarl, Power Automation America Inc, and the joint venture Han's PA Automation Technology Co Ltd.
Since 2007, BankM AG (Frankfurt am Main, Germany) is the partner of small and medium-sized enterprises and specializing in capital market financing with its experienced, interdisciplinary team. SME customers benefit from individual service and rapid access to selected investors that fit their needs. BankM's services include capital market advisory, arranging IPOs and capital increases for equity financing, debt advisory and debt capital mediation, designated sponsoring and research as well as M&A, hereby specializing in the identification of suitable strategic partners in China.
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