Hexatronic Group: The high demand continues

Research Update

2017-09-01

07:32

Compared to last year Hexatronic grew their sales by 26%, of which 13% was organic. The sales figures were almost spot on to our estimates. A favorable sales mix with submarine cable deliveries and scale advantages lead to an impressive EBITDA margin of 14.2%. A large order book at the end of June indicates a strong quarter to come. The demand for optical fiber, the glass used in fiber cables, remains high and there is a global shortage of the raw material. The supply squeeze is a limiting factor. However, Hexatronic states they have secured the supply for 2017 and higher volumes for 2018. We have adjusted our long-term estimates of growth and margins slightly upwards. Our new Estimated Fair value amounts to 64 (57) SEK per share.

KL

Kristoffer Lindström

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