XP Power — Strong H222 with good visibility for FY23

XP Power (LSE: XPP)

Last close As at 16/07/2024

GBP15.22

−2.00 (−0.13%)

Market capitalisation

GBP361m

More on this equity

Research: TMT

XP Power — Strong H222 with good visibility for FY23

XP Power’s FY22 trading update confirmed that its H222 performance was significantly stronger than H122 as supply chain conditions improved. As expected, Q4 order intake moderated as customers adapted to longer lead times. The year-end order book provides good visibility for FY23 and management is optimistic on XP’s prospects for the year. We have revised our forecasts to reflect moderating order intake and higher levels of debt.

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

XP Power

Strong H222 with good visibility for FY23

FY22 trading update

Tech hardware and equipment

12 January 2023

Price

2,165p

Market cap

£425m

$1.21/£

Net debt (£m) at end FY22

152

Shares in issue

19.6m

Free float

90%

Code

XPP

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

7.2

41.5

(56.7)

Rel (local)

3.7

25.6

(56.5)

52-week high/low

5,250p

1,464p

Business description

XP Power is a developer and designer of power control solutions, with production facilities in China, Vietnam, Germany and the United States and design, service and sales teams across Europe, the United States and Asia.

Next events

FY22 results

28 February 2023

Analyst

Katherine Thompson

+44 (0)20 3077 5700

XP Power is a research client of Edison Investment Research Limited

XP Power’s FY22 trading update confirmed that its H222 performance was significantly stronger than H122 as supply chain conditions improved. As expected, Q4 order intake moderated as customers adapted to longer lead times. The year-end order book provides good visibility for FY23 and management is optimistic on XP’s prospects for the year. We have revised our forecasts to reflect moderating order intake and higher levels of debt.

Year end

Revenue (£m)

PBT*
(£m)

Diluted EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

12/20

233.3

44.3

198.4

74

10.9

3.4

12/21

240.3

43.8

176.3

94

12.3

4.3

12/22e

290.6

37.7

151.6

94

14.3

4.3

12/23e

309.5

40.0

160.8

97

13.5

4.5

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Strong finish to FY22

Helped by improving supply chain conditions, XP generated Q422 revenue of £87.6m, +49% y-o-y (+30% constant currency (cc), +24% like-for-like (l-f-l)) and +10% q-o-q. FY22 revenue of £290.6m (+21% y-o-y, +11% cc, +5% l-f-l) compared to our £282.4m forecast. Management expects FY22 adjusted operating profit in the middle of the current consensus range (£41–46m). At £43.5m, this implies H222 operating profit of £28.5m (17.1% margin) versus £15.0m in H122 (12.1% margin). Year-end net debt of £152m was higher than our £133m, due to slower than expected inventory unwind, lower operating profit and higher net finance costs. Management has secured better banking covenant flexibility (net debt/ EBITDA <3.5x at end FY22 (up from <3x), reducing to <3.25x at end H123 and <3x at end FY23) and expects leverage to reduce significantly through FY23. The Q4 dividend is likely to be at least 36p, in line with our forecast.

Moderating order intake

After a period of very strong order intake as customers sought to manage long lead times through the supply chain, Q4 orders moderated, falling 32% q-o-q and 23% y-o-y (31% cc, 34% l-f-l). Order backlog at year-end of c £300m remains high and provides good visibility for FY23. Management expects visibility to return to more normal levels during 2023 (c four months historically). We have revised our FY22 forecasts to reflect expected revenue and operating profit. We have adjusted our FY23 forecasts to reflect inflation and higher net interest costs.

Valuation: Discount narrows

On a P/E basis for FY22 and FY23, XP is trading at a 20% discount to both global power solution companies and UK electronics companies, with a dividend yield at the top end of the range. XP generates EBITDA and EBIT margins at the upper end of both peer groups and has a strong order book entering FY23. In our view, with supply chain issues abating, concern is switching to the demand side of the equation. We expect that key drivers of the share price will include evidence over coming quarters that order intake is relatively stable, despite increasing economic uncertainty, and that litigation has been resolved.

Changes to forecasts

Exhibit 1: Changes to forecasts

£m

FY22e

FY22e

FY23e

FY23e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Revenues

282.4

290.6

2.9%

20.9%

295.8

309.5

4.6%

6.5%

Gross profit

122.0

124.0

1.7%

14.5%

135.5

134.7

(0.6%)

8.7%

Gross margin

43.2%

42.7%

(0.5%)

(2.4%)

45.8%

43.5%

(2.3%)

0.9%

EBITDA

57.9

55.9

(3.5%)

0.7%

70.8

65.6

(7.4%)

17.3%

EBITDA margin

20.5%

19.2%

(1.3%)

(3.9%)

23.9%

21.2%

(2.8%)

1.9%

Normalised operating profit

45.4

43.4

(4.4%)

(3.7%)

57.2

50.0

(12.7%)

15.1%

Normalised operating margin

16.1%

14.9%

(1.1%)

(3.8%)

19.3%

16.1%

(3.2%)

1.2%

Reported operating profit

(20.1)

(22.1)

10.0%

(174.4%)

53.0

45.8

(13.7%)

N/A

Reported operating margin

(7.1%)

(7.6%)

(0.5%)

(20.0%)

17.9%

14.8%

(3.1%)

22.4%

Normalised PBT

42.3

37.7

(10.8%)

(13.9%)

52.9

40.0

(24.5%)

6.0%

Reported PBT

(24.2)

(28.8)

18.8%

(201.4%)

48.7

35.8

(26.6%)

N/A

Normalised net income

34.0

30.3

(10.9%)

(13.4%)

42.6

32.1

(24.6%)

6.0%

Reported net income

(19.9)

(23.6)

18.6%

(204.4%)

39.3

28.8

(26.8%)

N/A

Normalised basic EPS (p)

173.1

154.3

(10.9%)

(14.0%)

217.1

163.6

(24.6%)

6.0%

Normalised diluted EPS (p)

170.1

151.6

(10.9%)

(14.0%)

213.3

160.8

(24.6%)

6.0%

Reported basic EPS (p)

(101.3)

(120.2)

18.6%

(203.8%)

200.0

146.5

(26.8%)

N/A

Dividend per share (p)

94.0

94.0

0.0%

0.0%

97.0

97.0

0.0%

3.2%

Net debt/(cash)

133.3

151.8

13.9%

517.2%

124.1

140.8

13.5%

(7.3%)

Orders

385.2

362.7

-5.8%

5.6%

310.6

276.4

-11.0%

-23.8%

Net debt/EBITDA (x)

2.4

2.8

1.8

2.2

Source: Edison Investment Research


Exhibit 2: Financial summary

£m

2017

2018

2019

2020

2021

2022e

2023e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

166.8

195.1

199.9

233.3

240.3

290.6

309.5

Cost of Sales

(89.2)

(102.8)

(109.8)

(123.2)

(132.0)

(166.6)

(174.7)

Gross Profit

77.6

92.3

90.1

110.1

108.3

124.0

134.7

EBITDA

 

 

41.7

49.2

44.5

56.8

55.5

55.9

65.6

Normalised operating profit

 

 

36.4

42.9

35.0

46.0

45.1

43.4

50.0

Amortisation of acquired intangibles

(0.6)

(2.8)

(3.2)

(3.2)

(2.8)

(4.2)

(4.2)

Exceptionals

(3.3)

(0.8)

(5.1)

(5.4)

(12.6)

(61.3)

0.0

Share-based payments

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Reported operating profit

32.5

39.3

26.7

37.4

29.7

(22.1)

45.8

Net Interest

(0.3)

(1.7)

(2.7)

(1.7)

(1.3)

(5.7)

(10.0)

Joint ventures & associates (post tax)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Exceptional & other financial

0.0

0.0

0.0

0.0

0.0

(1.0)

0.0

Profit Before Tax (norm)

 

 

36.1

41.2

32.3

44.3

43.8

37.7

40.0

Profit Before Tax (reported)

 

 

32.2

37.6

24.0

35.7

28.4

(28.8)

35.8

Reported tax

(3.6)

(7.2)

(3.2)

(4.0)

(5.4)

5.4

(6.8)

Profit After Tax (norm)

28.8

33.9

27.9

39.2

35.4

30.5

32.4

Profit After Tax (reported)

28.6

30.4

20.8

31.7

23.0

(23.3)

29.0

Minority interests

(0.3)

(0.2)

(0.3)

(0.2)

(0.4)

(0.3)

(0.3)

Discontinued operations

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

28.5

33.7

27.6

39.0

35.0

30.3

32.1

Net income (reported)

28.3

30.2

20.5

31.5

22.6

(23.6)

28.8

Basic average number of shares outstanding (m)

19.1

19.1

19.2

19.3

19.5

19.6

19.6

EPS - basic normalised (p)

 

 

149.4

176.1

144.1

201.8

179.4

154.3

163.6

EPS - diluted normalised (p)

 

 

147.0

172.8

141.4

198.4

176.3

151.6

160.8

EPS - basic reported (p)

 

 

148.3

157.8

107.0

163.0

115.8

(120.2)

146.5

Dividend (p)

78

85

55

74

94

94

97

Revenue growth (%)

28.5

17.0

2.5

16.7

3.0

20.9

6.5

Gross Margin (%)

46.5

47.3

45.1

47.2

45.1

42.7

43.5

EBITDA Margin (%)

25.0

25.2

22.3

24.3

23.1

19.2

21.2

Normalised Operating Margin (%)

21.8

22.0

17.5

19.7

18.8

14.9

16.1

BALANCE SHEET

Fixed Assets

 

 

88.1

129.2

137.4

135.2

150.5

198.3

203.0

Intangible Assets

63.9

97.7

99.6

98.8

108.8

144.2

144.0

Tangible Assets

22.5

30.7

35.9

33.5

38.5

50.9

55.8

Investments & other

1.7

0.8

1.9

2.9

3.2

3.2

3.2

Current Assets

 

 

83.5

105.1

96.0

107.0

121.7

162.6

161.5

Stocks

37.8

56.5

44.1

54.2

74.0

94.9

95.3

Debtors

23.8

33.0

34.8

30.2

30.8

43.8

43.2

Cash & cash equivalents

15.0

11.5

11.2

13.9

9.0

9.6

12.6

Other

6.9

4.1

5.9

8.7

7.9

14.3

10.3

Current Liabilities

 

 

(25.1)

(26.8)

(30.4)

(34.7)

(49.0)

(49.9)

(51.7)

Creditors

(21.4)

(22.4)

(25.2)

(28.3)

(44.7)

(45.6)

(47.4)

Tax and social security

(3.5)

(4.2)

(3.1)

(4.9)

(2.5)

(2.5)

(2.5)

Short term borrowings

0.0

0.0

(1.6)

(1.5)

(1.8)

(1.8)

(1.8)

Other

(0.2)

(0.2)

(0.5)

0.0

0.0

0.0

0.0

Long Term Liabilities

 

 

(29.6)

(70.1)

(64.1)

(43.0)

(50.8)

(178.4)

(170.2)

Long term borrowings

(24.0)

(63.5)

(57.3)

(35.2)

(39.9)

(167.5)

(159.3)

Other long term liabilities

(5.6)

(6.6)

(6.8)

(7.8)

(10.9)

(10.9)

(10.9)

Net Assets

 

 

116.9

137.4

138.9

164.5

172.4

132.5

142.5

Minority interests

(0.9)

(1.0)

(0.7)

(0.7)

(0.9)

(1.0)

(1.0)

Shareholders' equity

 

 

116.0

136.4

138.2

163.8

171.5

131.6

141.5

CASH FLOW

Op Cash Flow before WC and tax

41.7

49.2

44.5

56.8

55.5

55.9

65.6

Working capital

0.4

(21.6)

10.6

(6.2)

(4.0)

(33.0)

2.0

Exceptional & other

(6.3)

3.2

(4.4)

(1.7)

(10.9)

(53.8)

0.0

Tax

(6.1)

(4.1)

(4.5)

(3.3)

(4.2)

(1.0)

(2.8)

Net operating cash flow

 

 

29.7

26.7

46.2

45.6

36.4

(31.9)

64.8

Capex

(10.1)

(15.0)

(16.3)

(14.9)

(21.9)

(34.0)

(23.0)

Acquisitions/disposals

(18.3)

(35.4)

0.0

(0.5)

0.0

(32.3)

0.0

Net interest

(0.2)

(1.5)

(2.7)

(1.3)

(0.9)

(5.7)

(10.0)

Equity financing

(0.2)

0.6

0.5

3.5

0.6

0.0

0.0

Dividends

(14.2)

(15.6)

(17.2)

(7.3)

(18.4)

(18.7)

(19.0)

Other

0.0

0.0

(1.5)

(1.7)

(1.7)

(1.7)

(1.7)

Net Cash Flow

(13.3)

(40.2)

9.0

23.4

(5.9)

(124.2)

11.1

Opening net debt/(cash)

 

 

(3.7)

9.0

52.0

41.3

17.9

24.6

151.8

FX

0.6

(2.7)

1.7

0.0

(0.8)

(3.0)

0.0

Other non-cash movements

0.0

(0.1)

0.0

0.0

0.0

0.0

0.0

Closing net debt/(cash)

 

 

9.0

52.0

41.3

17.9

24.6

151.8

140.8

Source: XP Power, Edison Investment Research

General disclaimer and copyright

This report has been commissioned by XP Power and prepared and issued by Edison, in consideration of a fee payable by XP Power. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by XP Power and prepared and issued by Edison, in consideration of a fee payable by XP Power. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

More on XP Power

View All

Latest from the TMT sector

View All TMT content

Research: Investment Companies

Worldwide Healthcare Trust — Sticking to the successful long-term strategy

Worldwide Healthcare Trust’s (WWH’s) two co-managers, Sven Borho and Trevor Polischuk at specialist investor OrbiMed, remain positive on the prospects for the global healthcare industry. This view is based on favourable company fundamentals, increased clarity on US drug pricing and an upturn in merger and acquisition (M&A) activity, as pharma companies are using their strong balance sheets to bolster their product pipelines. The trust’s portfolio remains skewed to emerging (smaller-cap) biotech and emerging market stocks rather than large-cap pharma companies. While this strategy has been detrimental to WWH’s relative performance in recent quarters, this active approach has been successful over the longer term.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free