HAMON : Degroof : Accumulate obj 35

jmdr

02 nov. 2010 •17:39

The facts: Friday after market Hamon released a trading update.

Our analysis: Hamon booked new orders of EUR 78.3m in 3Q10, which repre-sents a 33% annual increase, driven by business launched in emerging markets for customers in the power generation and the oil & gas sectors. The segments Air pollution controls Europe and US performed particularly well. But the chimneys segment was low.
Utilities and oil & gas sectors represent 75% of the bookings. Investments by the metal industry rebounded after more than 2 years of investment freeze.
On top of the order intake, Hamon was awarded several contracts with options for additional orders up to EUR 50m for cooling systems and up to USD 40m for air pollution controls units, which should be booked in 4Q10 or 1Q11. The EUR 50m includes options for a contract signed in 2009.
On 21 Octobre, Hamon acquired a 60% stake in a South African engineering company for an undisclosed amount.
Following the USD depreciation, our EPS forecast declined by 14% to EUR 2.03 in 2010 and by 9% to EUR 2.54 in 2011.
The fair value remains unchanged thanks to a slight decline of the WACC to 9.2%.

Conclusion & Action: We maintain an accumulate rating and our TP of EUR 35.