Annual update: Profit growth in sight
​We retain our target price 1.10 euros and upgrade recommendation to buy (prev. accumulate) for Suominen. After successful rebuilding of profitability and the balance sheet in 2012-2014, the company is executing its credible organic growth strategy for the strategy period of 2015-2017, which growing nonwoven markets support decently. We estimate that Suominen’s earnings will stay on uphill track in the next years driven especially by net sales growth and slight grossmargin expansion. Given the profit growth outlook, we consider that there is still decent upside in the share price as the company trades at P/E-ratio 14x FY’15 and 12x FY’16 based on our estimates.
Suominen is a manufacturer and supplier of nonwovens, wet wipes, and flexible packaging for industry and retailers. Products are used in wiping and hygiene products, as ready-made wet wipes, and as consumer packaging for daily consumer goods. Co.'s business operations are divided into two business areas: Wiping and Flexibles. The Wiping segment supplies nonovens as roll goods and wet wipes in consumer packaging that are ready for retail store shelves for use in baby care products, personal care products, household wiping products and industrial wipes.The Flexibles segment is a supplier of food and hygiene packaging in Europe and a producer of retail packaging in Finland.
Inderes was founded 2009 and is a company that focuses on equity research. Our goal is to contribute to the functioning of the capital markets by acting as an information link between companies and investors. We are one of the largest equity research teams in Helsinki with the strength of 9 professionals. Inderes Equity Research is an award-winning equity research team, which is independent from banking activities. Several of our analysts are top ranked on the Bloomberg BARR-ranking and have won several Starmine rewards. Our company is majority-owned by the staff.
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