MEKO (AO) | Buy | Q2 preview 23 July: self-help in focus as demand remains cautious

研报英文原文证据摘录

MEKO (AO) | Buy | Q2 preview 23 July: self-help in focus as demand remains cautious

MEKO Buy | Target Price: SEK100.00

Company description Management

MEKO is the leading supplier of spareparts to multibrand service outlets in the Pehr Oscarson, CEO

Nordics mainly. Through its five business areas FTZ, MECA Mekonomen and Christer Johansson, CFO

Sörensen og Balchen it is the market leader in Sweden, Norway and Denmark. Fredrik Sätterström, IR

Mekonomen has its own wholesale operation with more than 470 store and more Key shareholders

than 3,600 affiliated work shops. B2B sales represents more than 90%. Free float 74.00%

LKQ Corporation 26.59%

Fourth National Pension Funds 7.44%

Nordea Funds 4.02%

Investment case Valuation methodology

MEKO is the largest spare parts supplier to independent car Our TP is based equally on a peer multiple and DCF valuation

service providers in the Nordic region. The FTZ and Inter-Team using a WACC of 10%, a growth rate of 2%, and an EBIT margin

acquisitions doubled its size. The Koivunen acquisition in of 6%.

Finland completes the Nordic platform. This, and cooperation The company-specific risk is affected by its gearing, which is

with its largest shareholder, LKQ, creates economies of scale. balanced by stable cash flow generation.

The car service market has been stable over time. Car owners Nordics-based peers are limited. Bilia's service operation is only

have tended to keep their cars longer since the changeover to 20% of sales. Outside the Nordics area, LKQ and Autozone are

electrified vehicles has slowed. Service demand normally peers.

increases with an ageing car fleet. Risks to our rating

MEKO seems able to improve earnings going forward through Vehicle producers trying to secure a larger part of the value