08.10.2012 - Equity Research Einzelstudie // kaufen

Research Report Update - HPI AG - Buy

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Unternehmen: HPI AG
Branche: Industrie-Maschinenbau-Technologie-Automotive
Rating: kaufen
Kurs bei Erstellung in €: 05.10.2012 - 1,25
Kursziel in €: 2,30
Mögl. Interessenskonflikt gem. §34b Abs.1 WpHG und FinAnv: 5

First six months meet expectations – good development in profitability – forecasts adjusted to deconsolidation – price target of €2.30 confirmed.

The development of HPI AG fully met our expectations in the first six months of 2012. The sales revenues of €35 million showed a decrease by 7.9%, but it should be noted that the sale of 100% of the shares in HPI Distribution GmbH and the sale of 51% of the shares in each of the companies VCE Virtual Chip Exchange and ce Global Sourcing GmbH as part of management buyouts led to inorganic changes.

Altogether, sales revenues of about €5 million are omitted due to the deconsolidations. Adjusted for this effect, the sales revenues would accordingly be about €40 million, which would correspond to an organic increase by around 5.3% compared to the previous year. The basis for the good organic development of HPI AG despite the increasingly gloomy economic situation is especially the strong development of the subsidiaries AZEGO Components GmbH and 3KV GmbH. Both companies clearly exhibited double-digit growth rates in the first six months and partially compensated the decrease in sales revenues due to the deconsolidations.

The earnings situation also developed very well. Despite the deconsolidations, an EBIT of €1.0 million was achieved in the first six months of 2012, which was at the same level as in the previous year. At the same time, the EBIT margin improved from 2.6% to 2.9%. In particular, the positive effect of streamlining the consolidated companies could already be clearly observed in the second quarter of 2012. Here, an EBIT margin of 3.7% was already achieved.

Based on this good development in the first six months of 2012, we have left our organic expectations for HPI AG unchanged but have made adjustments due to the deconsolidations. We therefore now expect that sales revenues of €72.91 million will be achieved in the full year of 2012. On the results side, we think, taking the deconsolidations into account, that an EBIT of €2.10 million would be realistic.

However, we have not taken further acquisitions into account in our forecasts. HPI AG is currently in concrete negotiations regarding another acquisition, and this should still be completed in the second six months of 2012. Taking this inorganic growth effect into account, management of HPI AG continues to expect to achieve sales revenues of €80 million and an EBIT of €2.3 million.

With a valuation on book value level and a P/E for 2013 of 9.8, the stock of HPI AG is not valued as high. Additionally, the company exhibits an attractive organic and inorganic growth potential also in the coming periods. On this basis and based on the increased profitability in the first six months of 2012, we confirm our price target of €2.30. According to the high upside potential for the stock, we are also renewing our BUY rating.


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