Levenhuk OJSC : Neutral price, but strong fundamentals

Levenhuk OJSC relative valuation is now NEUTRAL. It was previously rated UNDERVALUED, and has a fundamental analysis score of 70.

Our analysis is based on comparing Levenhuk OJSC with the following peers – IOR SA, Donskoy Factory of Radiocomponents JSC, Arzamas Instrument Engineering Factory JSC and NanoFocus AG (IORB-RO, DZRD-RU, APSZ-RU and N2F-DE).

Relative Valuation

Levenhuk OJSC is currently neutrally valued, as its previous close of RUB 8.05 lies within the CapitalCube estimate range of RUB 6.09 to RUB 8.43. Over the last 52 week period, Levenhuk OJSC has fluctuated between RUB 6.90 and RUB 14.02.

Relative Valuation

Company Overview

  • Relative outperformance last month is up from a median performance last year.
  • Levenhuk OJSC’s current Price/Book of 0.61 is about median in its peer group.
  • The market expects LVHK-RU to grow faster than its peers and for the company to improve its current ROE.
  • LVHK-RU‘s relatively high profit margins are burdened by relative asset inefficiency.
  • Changes in annual revenues are in line with its chosen peers but lags in terms of earnings suggesting that the company is less cost conscious and may be spending for growth.
  • The company’s relatively high gross and pre-tax margins suggest a differentiated product portfolio and tight control on operating costs relative to peers.
  • LVHK-RU has the financial and operating capacity to borrow quickly.

Investment Outlook

Levenhuk OJSC has a fundamental score of 70 and has a relative valuation of NEUTRAL.

Levenhuk OJSC appears on the top right hand quadrant of CapitalCube’s Value – Price Matrix. We classify this as ‘Safety’. In other words, Levenhuk OJSC has a relatively high Fundamental Analysis score of 70, while being potentially overvalued and trading higher than its CapitalCube Implied Price of 7.26. There might be some safety in this stock where it’s fundamental strength perhaps justifies its relatively higher price.

Fundamentals Vs Relative Valuation

Drivers of Valuation

The market expects improvement in LVHK-RU‘s current performance

The market expects more growth from LVHK-RU than the median of its chosen peers (PE of 6.19 compared to peer median of 3.61) and to improve its current ROE of 10.54%.

The company’s current Price/Book of 0.61 is about median in its peer group.

Valuation Drivers

LVHK-RU has moved to a relatively high PE from a relatively low PE profile at the prior year-end.

Peer Analysis

A complete list of valuation metrics is available on the company page.

Company Profile

Levenhuk OJSC manufactures and sells optical devices and instruments. It products include microscopes, telescopes, binoculars, and other related accessories. The company was founded in 2002 and is headquartered in St. Petersburg, Russia.

Disclaimer

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