Auto Partner: sound growth prospects (BUY - initiation of coverage)
We initiate coverage of Auto Partner (APR) with a BUY rating and a 12M price target (PT) of PLN 23.0, offering an attractive 26% upside potential. Our investment case is based on supportive market trends and APR’s proven ability to outpace market growth. We note that APR’s top line has increased by over 30% yoy in 1Q23. Despite our assumption of possible downward pressure on the gross margin this year, we see room for a sound 2022-25E EBITDA CAGR of 13% (10% yoy this year). This implies premium growth vs. its global peers’ median of a limited 5%, while the stock is trading in line with its peers on EV/EBITDA for 2023E, and at a 7% discount for 2024E. Our 2023-24E EBITDA figures are 5-14% ahead of the current Bloomberg consensus, leaving some room for positive surprises.Auto Partner SA is a Poland-based company engaged in the auto, truck and motorcycle parts industry. The Company is an importer and distributor of spare parts for cars and light commercial vehicles. Auto Partner SA is an enterprising entity with its headquarters as well as logistic and distribution centre located in Bierun near Tychy. The Company has approximately 60 branch offices across the domestic markets and some representative offices in neighboring countries, in the Czech Republic, Slovakia, Ukraine and Belarus, among others. Auto Partner SA distributes stabilizer links, steering rod end sets, steering rods, suspension arms, pins, rubber - metal parts, power steering pumps and steering gears, among others.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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