(Finance) – Integrae SIM has coverage started on the title Saccheria Brothers Franceschetti, leader in Italy in industrial packaging in propylene raffia fabric. The company was listed on Euronext Growth Milan on 15 December 2022 with a placement price of €1.25 per share. The target price was set at 3 euros per share (with a potential upside of more than 60%), while the judgment on the title is “Buy“.
Analysts expect an increase of production value, which is expected to go from 19.44 million euros in 2021 to 27.50 million euros in 2025 (CAGR 21A-25E: 9.1%). L’EBITDA it should go from 1.75 million euros in 2021 to 2.65 million euros in 2025, for an EBITDA margin growing from 9% to 9.6%.
It is expected that the group can improve their own NFP thanks to the progressive increase in turnover. In particular, it is estimated that the NFP could reach a value of 1.85 million euros of debt in 2025.
Between strengths of the company the following are mentioned: first-mover on the domestic electronic market (e-commerce) of its sector; performing infrastructure and organization of the electronic market; unique domestic industrial production in the domestic market; ability to source with adequate quality on international markets; consolidated customer base with thousands of references in diversified sectors
The chance indicated are: research and development with a view to the circular economy, sponsored by regulators and funded; management and reuse of used packaging; market demand for “Trash chic” bags, backpacks and fashion accessories; sustained demand for bulk bags in the chemical industry; request for further greater flexibility and handling of the packaging.
Between weaknesses there are: geographical limitation of the outlet market; risk of concentration of purchases from the largest supply market for the articles marketed; increase in the costs of materials and articles marketed; growing working capital needs for price/margin strategies; technological misalignment with some of the Far East suppliers who do not have the IT technological level of the Company
Furthermore, i higher market risks they are: consumer inclination to use small sealed packages; restrictive laws and regulations for the production of packaging and constraints aimed at promoting the use of “sustainable” packaging; turmoil on value chains; shortage of items to purchase for marketing; general macroeconomic scenario and geopolitical context.