Chr. Hansen (Hold, TP: DKK540.00) - Weak start to the year well flagged
We forecast just 0.6% organic growth YOY in Q1, as flagged with the Q4 report, but also weak profitability due to a lack of scale benefits in Food Cultures & Enzymes (FC&E, consensus FC&E organic growth looks high for Q1). Additionally, order phasing in Human Health and raw material prices in Natural Colors (NC) are set to be negatives in Q1. We do not expect the 2019/20 guidance to be narrowed at this stage, and maintain our HOLD and DKK540 target price.Chr. Hansen is a biosciences group based in Denmark. Co. develops and supplies natural ingredient solutions for the food, pharmaceutical, nutritional, and agricultural industries worldwide. Co. operates in three divisions: Cultures and Enzymes (develops, produces, and sells cultures, enzymes, and probiotics for the food and dairy industries); Health and Nutrition (develops products for the dietary supplement, over-the-counter pharmaceutical, infant formula, and animal feed industries); and Natural Colors (develops natural color solutions to the food industry, primarily for the beverage, dairy, confectionery, fruit preparation and ice cream, as well as functional blends for processed meats).
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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