Tecnotree: Expanding product portfolio and customer base

We have included Tecnotree's CognitiveScale acquisition last weekend in our estimates. We see the acquisition of CognitiveScale's AI platform as a sensible addition to Tecnotree's product portfolio, which will strengthen the company's position in its customer base. Due to the moderate price of the acquired businesses (2023e EV/S 1.2x) and the transaction being relatively small for a company of Tecnotree’s size, the risks associated with the transaction are also moderate. At this stage, there is still uncertainty about the impact of the acquisition on earnings, and in the big picture our earnings estimates are unchanged. However, we see the acquisition as contributing to Tecnotree's long-term growth prospects, against which the valuation of the stock remains moderate.