Semperit confirmed at BUY, TP EUR 26 - In need of a coup
Captured between the substantially worse trading conditions in the gloves business and the cyclical downturn impacting industrial operations, Semperit is in need of a coup, in our viewManagement comments suggest that the divestment of Sempermed has become more of a priority
Given that the market appears to assign no value to the glove operations and given the scope of returns to remain below the cost of capital, we regard a disposal as the pre-condition for the shares to re-rate
Leaving the M&A angle aside, we deem industrial trading conditions as mixed
We trim the target price to EUR 26 from EUR 28.5 but maintain the BUY recommendation
Semperit is a holding company, engaged in developing, producing and selling specialized rubber and plastic products for the medical and industrial sectors. Co. has 20 production facilities in 12 countries. In addition, Co. operates a distribution network with branches in Asia, Europe and North and South America. Co.'s products are sold to providers in the medical and industrial sectors, who are supplied with specialised rubber and plastic products. Co.'s main product categories include examination and surgical gloves, hydraulic and industrial hoses, conveyor belts, escalator handrails, construction profiles, cable car rings, ski foils and products for railway superstructures.
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