HMS Networks (Hold, TP: SEK180.00) - Time will tell if this time is different
We have limited visibility on HMS Networks’ organic growth beyond Q2 given its cyclical end-market profile. We maintain our neutral view given its fair valuation (2021e EV/EBIT of 28x) and few tangible numbers to support that “this time is differentâ€, having reshaped its revenue profile, product portfolio and end-markets since 2009. We reiterate our HOLD but have raised our target price to SEK180 (170); we like its positioning for secular growth from accelerating automation trends driven by Covid-19, M&A potential, and margin upside.HMS Networks AB (HMS) is a Sweden-based company engaged in the provision of communication technology for industrial automation. The Company provides solutions to connect industrial devices to networks and products enabling interconnection between different industrial networks. The Company's products are classified into two brands, namely Anybus and Netbiter. HMS, under the brand name Anybus, manufactures and markets intelligent communication technology for machines and electrically controlled equipment. Under the brand name Netbiter it develops and sells communication equipment that facilitates remote management through the Internet, either via the fixed telephony network or the mobile telephony network. The Company operates through numerous subsidiaries, including HMS Industrial Networks AB, IXXAT GmbH, a supplier of communication technology for industrial automation, machine manufacturing and the automotive industry, as well as eWON SA.
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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