Inter Cars: Momentum persisting (stays BUY)
Since our most recent update on Inter Cars (CAR), the stock price has risen 22% and reached our previous 12M price target (PT) of PLN 455. We keep our BUY rating and increase our 12M PT to PLN 580/share (27% upside). On the back of the immensely strong 1H21 delivery, the 3Q21 sales figures and management comments on maintaining (high) profitability, we raise our 2021E EBITDA forecast by 24%. The shortage of microchips (which is unlikely to be solved before 1H22E, according to industry experts) and soaring producer prices create solid ground for double-digit growth in CAR’s top line in 2022E (+11% yoy, on our forecasts). If our expectations prove to be correct, CAR’s EBITDA would increase 48% between 2020 and 2022E vs. the +26% median for its peers. The combination of solid profit growth and limited capex should reduce its net debt/EBITDA from 1.7x to 0.9x between 2020-23E, on our numbers. Finally, in our view, CAR is valued attractively, at our 2021-22E EV/EBITDAs of 8.3-8.0x, 21-15% below its long-term averages.Inter Cars is an automotive spare parts distributor for passenger cars, commercial vehicles and trucks in Middle-Eastern Europe. The product range of Co. reaches over one million different automotive spare parts for passenger cars and trucks. No matter if the car is European or Asian one, Co.'s customers can find full range of products for their cars as well as all the necessary tools and garage equipment. Besides spare parts distribution, which is the core business of Co., Co. is also an exclusive distributor of legendary motorcycle brand “TRIUMPH” in Poland (via motorcycle distribution network, called Inter Motors) and distributor of spare parts and accessories for other motorcycle brands.
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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