Valuation does not fully reflect high risks
Afarak’s Q2-report came below our expectations in the big picture, although the moderate market price environment supported sales Y-on-Y. Profitability fell short of our expectations despite being better than on weak Q2’16. Afarak guided that Q3’17 will be below Q2’17, which was in line with our expectations. However, we did some estimate revisions for H2’17. We argue that the valuation is still too high given our earnings estimates and thus the risk profile is still elevated.
Afarak Group
Afarak Group operates in the manufacturing industry. The company specializes in the manufacture and development of specialized alloys and chrome solutions for industrial components. The products are resold worldwide through their own sales and marketing channels, where customers are found in the automotive, aerospace, and nuclear industries. The company is headquartered in Helsinki.
Read more on company page