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1. Company Snapshot

1.a. Company Description

Hexatronic Group AB (publ), together with its subsidiaries, designs, develops, manufactures, markets, and sells fiber communication solutions in Sweden and internationally.The company supplies passive infrastructure for telecom companies; and provides components and system solutions.It also offers fiber optic cables, ducts, copper cables, and network accessories; high tech products for fiber optic communications; fiber optic solutions, such as prefabricated ODFs, multi-fiber cable assemblies, and industrial applications; and training services for telecommunications, electric/gas, and health/safety markets.


In addition, the company provides high-density polyethylene pipes for communication, power, fiber-to-the-home, ITS, CATV, geothermal, and industrial pressure pipe applications; develops and certificates programs for various industries; and apprenticeships and specialist training programs, as well as distributes fiber-optic connection and optical measurement technology.It serves wholesalers, telecom operators, network owners, telecom companies, installers, and system houses.Hexatronic Group AB (publ) was incorporated in 1972 and is headquartered in Gothenburg, Sweden.

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1.b. Last Insights on HTRO

Hexatronic Group AB (publ) faces margin pressure, with its latest net profit margin declining to 4.7% from 6.8% previously. The company's forecasted earnings growth rate of 17.8% per year and revenue growth of 4.2% annually signal momentum, but are overshadowed by margin concerns. Trading at a 13.3x P/E ratio, the company's valuation appears discounted. With European markets experiencing a positive shift, Hexatronic's intrinsic value is estimated to be up to 26% higher than its current trading price, suggesting potential for growth amid improving economic indicators.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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European Stocks That May Be Trading Below Their Estimated Value

Nov -27

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3 European Stocks Estimated To Be Trading Up To 26% Below Intrinsic Value

Oct -29

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Hexatronic Group (OM:HTRO) Margin Pressure Challenges Bullish Growth Narrative Despite Discounted Valuation

Oct -25

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Hexatronic Group AB (HTROF) Q4 2024 Earnings Call Highlights: Resilience Amid Market Challenges

Feb -08

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Hexatronic Group AB (HTROF) Q3 2024 Earnings Call Highlights: Navigating Growth Amidst Market ...

Oct -26

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Hexatronic completes acquisition of Icelandic Endor

Oct -01

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Nomination Committee in Hexatronic appointed

Sep -20

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President and CEO Henrik Larsson Lyon has decided to leave Hexatronic

Sep -17

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.20%)

6. Segments

Fiber Solutions Product

Expected Growth: 10.2%

Growing demand for high-speed data transmission, increasing adoption of 5G and IoT technologies, and rising need for data center infrastructure are driving the growth of the fiber optic market.

Service

Expected Growth: 10.2%

Growing demand for high-speed data transmission, increasing adoption of 5G and IoT technologies, and rising need for fiber-based infrastructure in telecommunications and industrial applications drive the growth of Hexatronic Group AB's fiber optic solutions and services.

7. Detailed Products

Fiber Optic Cables

Hexatronic Group AB (publ) offers a wide range of fiber optic cables designed for various applications, including telecommunications, data centers, and industrial networks.

Fiber Optic Components

The company provides a variety of fiber optic components, including connectors, adapters, and attenuators, for use in fiber optic systems.

Cable Systems

Hexatronic Group AB (publ) offers a range of cable systems, including fiber optic cables, copper cables, and hybrid cables, for various applications.

Fiber to the Home (FTTH) Solutions

The company provides FTTH solutions, including fiber optic cables, connectors, and accessories, for broadband networks.

Data Center Solutions

Hexatronic Group AB (publ) offers data center solutions, including fiber optic cables, connectors, and accessories, for high-density data centers.

Industrial Fiber Optic Solutions

The company provides industrial fiber optic solutions, including fiber optic cables, connectors, and accessories, for industrial automation and control systems.

8. Hexatronic Group AB (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Hexatronic Group AB (publ) is medium due to the presence of alternative products and services in the market. However, the company's strong brand reputation and customer loyalty mitigate this threat to some extent.

Bargaining Power Of Customers

The bargaining power of customers is low for Hexatronic Group AB (publ) due to the company's strong market position and the lack of concentration among its customer base.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Hexatronic Group AB (publ) due to the presence of a few large suppliers in the market. However, the company's long-term contracts and diversified supply chain mitigate this threat to some extent.

Threat Of New Entrants

The threat of new entrants is low for Hexatronic Group AB (publ) due to the high barriers to entry in the market, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high for Hexatronic Group AB (publ) due to the presence of several established competitors in the market, leading to a highly competitive environment.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 46.98%
Debt Cost 6.26%
Equity Weight 53.02%
Equity Cost 11.25%
WACC 8.91%
Leverage 88.62%

11. Quality Control: Hexatronic Group AB (publ) passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
BOS

A-Score: 5.2/10

Value: 7.4

Growth: 5.7

Quality: 6.6

Yield: 0.0

Momentum: 9.5

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Hexatronic

A-Score: 3.8/10

Value: 7.1

Growth: 9.1

Quality: 4.6

Yield: 0.6

Momentum: 0.5

Volatility: 0.7

1-Year Total Return ->

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Stock-Card
Silicom

A-Score: 3.7/10

Value: 8.8

Growth: 2.0

Quality: 3.0

Yield: 0.0

Momentum: 7.5

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
Eutelsat

A-Score: 3.5/10

Value: 8.3

Growth: 0.4

Quality: 1.2

Yield: 5.0

Momentum: 6.0

Volatility: 0.0

1-Year Total Return ->

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Stock-Card
u-blox

A-Score: 3.5/10

Value: 4.4

Growth: 0.6

Quality: 3.3

Yield: 0.6

Momentum: 10.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Napatech

A-Score: 2.3/10

Value: 6.0

Growth: 0.0

Quality: 4.4

Yield: 0.0

Momentum: 2.5

Volatility: 0.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

19.91$

Current Price

19.91$

Potential

-0.00%

Expected Cash-Flows