(Finance) – Alantra he lowered to 7.0 euros per share (from the previous 8.0 euros) the target price on Forestry Chemical Industrieslisted on Euronext Growth Milan and active in the design, production and marketing of high-tech adhesives and fabrics, confirming the recommendation on the title to “Buy” given the potential upside of 37%. The revision of the rating came after the company communicated its results for the first half of 2023.
Analysts note that 2Q23 sales were impacted by a difficult market conditions (-13.8% on an annual basis). EBITDA margin grew 200 basis points year over year to 11.6% of sales in 2Q23 from 9.6% in 2Q22. The margin gain comes from the reduction in energy prices and the contribution of the photovoltaic system of the new headquarters. Furthermore, the net debt of the first half of 2023, excluding the cash impact of Tessitura Langè (approximately -7.8 million euros), was in line with the YE22 figure.
While current trading is still affected by several headwinds, Industrie Chimiche Forestali is focusing on the exploitation of synergies resulting from the Tessitura Langè operation, which should be visible from the second half of the year, analysts underline.
Alantra has mainly reduced forecasts on FY23-25 sales (-10% on average) to take into account prolonged market uncertainty. The FY23 EBITDA margin is confirmed at around 10%. Industrie Chimiche Forestali is trading at 8.2x 24E P/E, a discount of over 40% compared to peers, “a undemanding level in our view, evidenced by the attractive FY23-25 ROE of 10% on average (excluding goodwill).”
(Photo: © Veerasak Piyawatanakul)