HansaMatrix: on the upswing (stays BUY)
Following the 9M22 results, we have updated our forecasts and rolled over our DCF model for HansaMatrix (HM), with an updated 12M price target (PT) of EUR 9.10/share, implying upside of c.30%. In both the recent FY22-23E guidance and the 9M webcast, management indicated that margins have bottomed out. Pass-through price hikes should see the EBITDA margin return to low-to-mid-teens levels (vs. 8.3% for 9M22) while the order book suggests that the industrial market sector should remain prominent in the sales mix for 2023-24E. In our view, the stock has underperformed on: 1) earnings which have trailed its electronics manufacturing services (EMS) peers; and 2) the postponed spinoff of LightSpace. With the ramping up of commercial 3D headset sales finally materialising, however, the implicit discount on LightSpace should narrow, while HM’s earnings trajectory should soon improve markedly, and the balance sheet deleverage. In our view, the pending tender offer from BaltCap, a private equity fund manager in the Baltics and HM’s 9.92% shareholder, is well timed to catch the stock at the bottom of this earnings cycle, but we believe the potential is greater than is reflected in the share price currently. We maintain our BUY rating on the stock.
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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