Doro: Order intake at better level

All figures in the Q2 report exceeded our expectations, with the exception of profit which was in line with our estimate. Both the gross margin and operating margin were better than expected and indicate that growth is being accompanied by a good focus on costs. Order intake increased by 19% y/y, which was a good and much needed performance following two weak quarters. On a rolling 12-month basis, the order book is showing annual growth of 20%, which supports the companys growth target for the current year. We have trimmed our EPS estimates for 2011 and 2012 by 3% and 1%, respectively, as costs for establishing a presence in new markets and product launches are expected to be slightly higher. We have adjusted our DCF valuation down to SEK 30/share (31) but have raised our Potential Reward rating to 6.0 (4.0). The shares are trading at P/E of 6.6x and EV/EBITDA of 4.8x for 2012, which are attractive ratios.