Valuation & Recommendation
Our DCF model resulted in a fair value estimate of 0.59 value per share. To complement our income-based valuation, we employed a relative multiple approach – a P/E valuation, utilizing a wide set of companies within the manufacturing space. This resulted in a P/E multiple of 12.5x which when multiplied against our 1-year target EPS of $0.07 resulted in a share price estimate of $0.88. Consequently, at the low end (bear case), we’ve determined a value of $0.59 while at the high end (best case), we’ve determined a value of $0.88. Placing equal weights to both methods, a simple average of the above values results in a share price estimate of $0.74, a 26.0% downside relative to the offer price of $1.00. This represents our base case estimate. As our base case estimate is below the offer price of the stock, we recommend that clients do not participate in this offer.
9 Months Performance
| Ratios | SEP-20 | SEP-21 |
| Revenue Growth | -32.8% | |
| Operating Profit Growth | -87.6% | |
| ROE | 1.7% | |
| Gross Profit Margin | 63.5% | 44.3% |
| Operating Profit Margin | 30.4% | 5.6% |
| Net Profit Margin | 25.0% | 1.7% |
| Pretax Profit Margin | 27.8% | 2.3% |
| Effective Tax Rate | 10.0% | 26.9% |
As at Februaury 21, 2022
Full Summary Analysis
