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Entities from the I&C industry (Control and Measurement Equipment and Automation) belong to the group of companies that systematically pay dividends. The effects of the upcoming economic slowdown, such as the loss of part of revenues and pressure on margins, but also an ambitious investment program or the need to finance increased working capital may have a negative impact on the ability to maintain the dividend policy at the current level in the coming years. Therefore, a strong balance sheet and stable operating cash flows are very important in the context of a demanding economic environment. In the case of Aplisens or Sonel, the expected deterioration of the economic situation and, consequently, the possible reduction in profits will not require verification of development plans and the implementation of drastic savings measures. In turn, Apator may be forced to choose between limiting payments to shareholders and reducing expenses for development.
We forecast that 2022 will be the weakest period in terms of results, from next year we expect them to improve. The improvement will be gradual and it will take several years to reach the pre-pandemic results. We assess the goals outlined in the updated Strategy of Apator Group as very difficult to achieve. With such assumptions, Apator is still valued at a premium to the fair value determined by us. We maintain the recommendation REDUCE with the target price of PLN 12.9 .
Our fears that Aplisens did not come true, due to the high involvement in eastern markets, most among I&C companies will experience the effects of war in Ukraine. The company coped very well in the new reality, and The passing year promises to be the best in the entire history of the company. Although we forecast a slight deterioration in results next year, further diversification of sales directions and still strong balance sheet give hope for a "dry foot" passage through the economic turmoil and maintaining transfers to shareholders. Quote We raised the share of the 18,3 PLN, which gives a 27% growth potential.
Sonel coped quite well with the problems resulting from the increase in production costs and the availability of components. The challenge remains the profitable execution of contracts for the supply of meters (especially with dynamically growing sales in this segment). Sonel's strong side remains a safe balance sheet (net cash), high core business margins and stable operating flows. In our opinion, the company is well prepared for more difficult times. We maintained the valuation of shares at approx. PLN 10, similar to the current price.
Analyst: Michał Sztabler Analityk akcji michal.sztabler@noblesecurities.pl +48 667 852 196
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