Incap: Balance sheet put to work with a planned acquisition
Incap announced yesterday it has acquired the US EMS company Pennatronics. We find the acquisition strategically good and also believe the acquisition price is quite reasonable. We included the immediate acquisition in our estimates for Incap and the changes at EPS level were slightly positive for the next few years. Despite the slight decreasing effect of the acquisition, Incap's risk profile remains highish, but we believe that the share valuation is low (2024e: P/E 11x, EV/EBIT 7x). Thus, looking beyond the challenges of this year the share’s risk-adjusted expected return is sufficient in our opinion.
Incap
Incap operates in the industrial sector. The company supplies equipment and associated services for industrial companies, where the range includes PCB assembly, system integrations, box building integration, design validation, and inspection methods. The largest operations are in the Nordic countries, the Baltics, and Asia. The company was originally established in 1985 and is headquartered in Helsinki.
Read more on company pageKey Estimate Figures2023-07-03
| 2022 | 23e | 24e | |
|---|---|---|---|
| Revenue | 263.8 | 250.8 | 294.4 |
| growth-% | 55.36 % | -4.91 % | 17.37 % |
| EBIT (adj.) | 40.0 | 32.1 | 39.8 |
| EBIT-% (adj.) | 15.16 % | 12.82 % | 13.51 % |
| EPS (adj.) | 0.98 | 0.80 | 0.99 |
| Dividend | 0.00 | 0.00 | 0.10 |
| Dividend % | 1.00 % | ||
| P/E (adj.) | 17.53 | 12.61 | 10.10 |
| EV/EBITDA | 12.01 | 7.85 | 5.82 |
