Smallcapseurope

A value investing blog. No investment advice. I could be wrong in any stock of my portfolio, please do your own research.

[Smallcapseurope @smallcapseurope]

Performance 2022: - 27,6%
Portfolio at 31.12.2022:
https://t.co/p2EXczFvvj

[Smallcapseurope @smallcapseurope]

@StayingRational Who are they taking share from? It is a very fragmented industry, is not an oligopoly, where it is easier to know. They might know if the clients tell them but I don't think AP will share that. A manufacturer could have been the previous supplier, or another big auto parts dist.

[Smallcapseurope @smallcapseurope]

Auto Partner:

I would like to highlight 2 points that I have seen the market is missing and a very valuable point that a fund manager gave us.
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[Smallcapseurope @smallcapseurope]

@StayingRational Probably the are not able to sell all their products to export clients. But in the case of the products they have more volume, they can perfectly do it, I don't see why not. It happens in other industries.

[Smallcapseurope @smallcapseurope]

@StayingRational They buy from AP because it is cheaper. They might be small auto parts distributors or retailers. Like in a lot of industries you can have big difference depending on your volume. AP also belongs to a purchasing group since 2017, which might have 5-10x AP volume.

[Smallcapseurope @smallcapseurope]

@InvestmentsJbs You just see it in the financials. We are seeing now in companies, the ones they can do it inmediately and the ones that would take more time.

The repair shops just pass the cost increases to the final client, no problem. Is how the industry works, it is a competitive advantage

[Financelot @FinanceLancelot]

Meanwhile, 3 years ago at Boston Dynamics...

[Lewis Robinson @ExpectingValue]

😳

[Smallcapseurope @smallcapseurope]

@InaTailHedged @LukeWolgram @VoltPortfolio Auto Partner

[Smallcapseurope @smallcapseurope]

Apparently, he was quick to respond “Auto Partner. Auto Partner is a really nice company. A rising star, even”, without mentioning any other competitor.

When a competitor says this, is gold.

[Smallcapseurope @smallcapseurope]

3. @JonCukierwar gave us a very valuable information about a conversation he had with Inter Cars CEO (Auto Partner biggest competitor in Poland).

He asked him “which of your Poland competitors do you respect the most?”
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[Smallcapseurope @smallcapseurope]

I consider Flexopack a 15x net profit multiple business, but let’s say that we apply a very conservative 10x to those profits --> 10.7€ per share.

No investment advice, do your own research.

[Smallcapseurope @smallcapseurope]

Flexopack Valuation:

Let’s assume FY22 rev. growth will be 20% (H1 rev. growth +50%). There probably has been some overstocking by customers in H1 and we should not give for granted that they repeat the 75M in H2, so let’s say Flexopack finally grows revenue 20% in FY22,
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[Smallcapseurope @smallcapseurope]

So with FY22 137M€ sales and 12% EBIT margins, no debt and a tax rate of 24%, Net profits could be around 12.5M in FY22.
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