Last close As at 05/08/2026
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Research: Industrials
PIERER Mobility is recovering rapidly from H120 pandemic disruptions to activity. It continues to grow share in its main markets, which saw stronger demand as lockdowns eased. The positive mobility trends driving demand for both motorcycles and e-bikes appear set to continue and the strategic move into urban e-mobility continues to plan, enhancing organic growth.
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PIERER Mobility |
Surging demand for powered two wheelers
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Automobiles & parts |
Deutsches Eigenkapitalforum 2020
28 October 2020 |
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PIERER Mobility is a research client of Edison Investment Research Limited |
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PIERER Mobility is recovering rapidly from H120 pandemic disruptions to activity. It continues to grow share in its main markets, which saw stronger demand as lockdowns eased. The positive mobility trends driving demand for both motorcycles and e-bikes appear set to continue and the strategic move into urban e-mobility continues to plan, enhancing organic growth.
Motorcycle demand increasing
Motorcycle performance is proving to be relatively resilient despite lockdowns that shut dealerships in many countries in H120. Sales fell 29% to €529.4m with gross margins falling to 24.4% (H119 27.7%). Around 30k units lost due to a pre-emptive eight-week production shutdown should be recovered by higher output in H220. Motorcycle demand is surprising on the upside, recovering strongly as lockdowns eased. PIERER continued to outperform in H120 despite pandemic disruptions, increasing share in all main markets. While the European market declined 14.7%, overall KTM and HUSQVARNA registrations fell 11.4% to 37.6k units with market share rising to 11.8%. In North America, KTM and HUSQVARNA grew market share to 10.9% as registrations rose 18.3% to 26.7k motorcycles. In the smaller Australia and New Zealand market, the brands saw stronger growth of 39.3% to 5.9k units. PIERER took full control of GASGAS ahead of plan in July 2020.
Lockdowns amplify e-bike growth trends
The e-bikes business performed ahead of plan in H120, generating an initial €68m of revenues and a better than expected EBIT of €3.5m. 34,351 Husqvarna and R-Raymon e-bikes were sold as were 8,492 R-Raymon bicycles. Initial sharp market declines during European lockdowns largely reversed in May and June, as pent up demand was absorbed and the public propensity for cycling increased. FY20 revenue guidance is maintained at €110m, as is management’s target of 250k unit sales by 2024 generating revenues of approximately €500m.
E-mobility to enhance organic motorcycle growth
In September, management increased FY20 revenue guidance by around 3% to more than €1.45bn while maintaining EBIT margin guidance of 4–6%. As e-bike expectations were unchanged the increase reflects buoyant motorcycle markets. H220 revenues are guided to be c 10% ahead of H219, and momentum should continue into H121. We expect recovery in FY21 financials to at least FY19 levels as organic growth resumes enhanced by rising e-bike volumes and profits, with stronger cash flows. The FY21 P/E rating of 23.5x reflects the view that the move into e-mobility will sustain above average growth.
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Edison estimates
Source: Company reports, Edison Investment Research estimates |
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Research: Financials
Secure Trust Bank’s (STB) Q3 trading update disclosed that Q3 was stronger than expected and FY20 earnings are likely to be well ahead of consensus forecasts. Loan repayment holidays in its Motor Finance and Retail Finance divisions were down remarkably and credit quality is not deteriorating. Loan demand is strengthening after the lockdown. Capital and liquidity remain good. The bank remains cautious due to continued COVID-19 and Brexit uncertainty and is still not providing formal guidance. We are upping our earnings forecasts and fair value from 1,704p to 1,756p. In our view, the valuation remains depressed compared to fundamentals with banking stocks still out of favour. STB trades on an FY20 P/BV of 0.53x, yet it has a strong track record of value creating returns (ROE above COE), a good capital base and liquidity. The Q3 good news reinforces our view that we are unlikely to see book value deterioration during this downturn to justify any NAV discount.