Ik heb nog niet alles gelezen, maar dit stukje vind ik wel nuttig om hier vast te plaatsen, vooral de laatste 2 alinea's, dat schetst toch een iets ander beeld dan alleen het noemen van een koersdoel van 5,75 euro:
InnoConcepts has proven that the patented technology owned by its wholly owned subsidiary can create substantial value for manufacturing companies active in plastic packaging. The fact that large companies like Schoeller Arca, Campina, Carlsberg and IAC (part of Lear) have entered into a license agreement confirms the benefits: less raw material usage, lower energy us, faster processing speeds and more design freedom. These benefits are even more interesting these days because of the focus on the reduction of C02 emissions, which in certain countries is about to become part of future legislation.
But despite these positive elements we are downgrading InnoConcepts from BUY to Hold.
On the one had this is due to declining demand at end customers and the impact on our forecast. The automotive industry, the base chemicals industry and other industries are experiencing steep declines in demand and companies in these sectors are scrambling to reduce capacity. This impacts both license contracts (IAC, Schoeller Arca and Carlsberg) but also the results of Formy Tachov and HTP Tooling. In addition, we have also not included revenues from the contract with the Fortune 500 client because we just do not have sufficient information to forecast the impact properly. As a result, we have significantly reduced our forecast for FY09 and thereafter.
The other reasons for which we have downgraded is that InnoConcepts’ disclosure has worsened recently with limited information being provided on crucial developments: contracts, financing and acquisitions. The company continues to use what we think are somewhat aggressive accounting techniques when recognizing royalty revenue, both in normal contracts but also as part of acquisitions. Balance sheet risks have also increased, as IPR receivables exceed revenues substantially (debtor risk) and investments are still stated at cost while market valuations are lower.
Our updated valuation results in a fair value of EUR 6.70, which would have resulted in a price target of EUR 7.70 (was EUR 17.50). But given the issues described above, we apply an arbitrary discount of 25%, resulting in a new price target of EUR 5.75. As a result, we lower our rating from BUY to HOLD.
It is, however, clear that if the company improves disclosure and provides sufficient information about the latest license deals and acquisitions and the economy improves (impacting the contracts with IAC, Campina, Carlsberg and Schoeller Arca), substantial additional upside is possible. Not only will the discount that we have arbitrarily applied disappear and will the Beta return to more normal levels but the contract with the Fortune 500 will also be included.
More speculatively, it could be possible that the management team of InnoConcepts who hold a stake of 5.6%, are planning, with the help of a private equity company to take the company private whereby management (and possibly long term shareholder Novem) reinvest in the NewCo. It is likely that a premium will be paid, so if this premium is 40%, the offer price would be close to EUR 7.50. This would be an interesting proposition for recent shareholders but it is significantly below the fair value (especially in the longer term) of the company.