Commissioned Research
Article by:
Nordea Markets
The core strengths we see in Scanfil are its elastic business model and extensive experience in the electronics manufacturing services sector.
Scanfil has commissioned Nordea Markets to produce a research report with the aim of providing investors with quality research on the company.
Scanfil’s time to shine – Updated 6 April 2018
An unnoticed jewel
Electronics manufacturing services (EMS) player Scanfil is active in the electronic device subcontractor market, which is set to grow by over 6% globally per year, according to IDC. The company has what we consider to be the right strengths in
the very competitive EMS sector, allowing it to protect its market position. We also believe that the operating margin improvement seen last year will continue this year.
A survivor in a competitive industry
Scanfil has faced several difficult years, but has emerged a survivor. The core strengths we see in the company are its elastic business model and extensive experience in the EMS sector.
Valuation is slightly below the sector median
We expect market demand for EMS subcontractors to remain strong for the next ten years at least. Small subcontractors typically trade at a small discount compared to larger
competitors. We do not expect Scanfil to grow faster than the industry and therefore do not find a clear premium compared to peers warranted.
We base our fair value on a combination of peer group and DCF analysis. The equally weighted range from our four different valuation approach drivers (DCF, P/B, EV/EBITDA and P/E) is EUR 4.8-5.9.
Disclaimer
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Conflict of interest
Readers of this document should note that Nordea Markets has received remuneration from the company mentioned in this document for the production of the marketing material. The remuneration is predetermined and is not dependent on the content. It is important to note that past performance is not indicative of future results. Nordea Markets is not and does not purport to be an adviser as to legal, taxation, accounting or regulatory matters in any jurisdiction. This document may not be reproduced, distributed or published for any purpose without the prior written consent from Nordea Markets.
Issuer review
This report has been reviewed, for the purpose of verification of fact or sequence of facts, by the issuer of the relevant financial instruments mentioned in the report prior to publication. The review has led to changes of facts in the report. Completion date: 6 April 2018, 08:21 CET