I also bought into this back in the day when prices were rising. I have faith in this money-making machine, so I don’t mind that it’s now the heaviest company in my portfolio and continues to grow. Maybe by the end of the year, we’ll be knocking on 19 euros 
I still dare to believe, especially given the strength perceived in Pukki’s interview, that we will continue to see growth in the latter half of the year and that the result will be closer to my own estimate of €2.2 than the updated forecast of €1.93.
Especially after that interview, I don’t think anything indicates a slowdown in demand. The company’s customers’ industries seem to be growing rapidly, and the constant fear of margins eroding has not materialized so far. On the contrary, the company has shown that increasing revenue flows efficiently down to the bottom line, it has succeeded in acquiring new customers, and not a single customer has been lost. Of course, global economic challenges and the nature of the industry are acknowledged.
I eagerly await the report, likely coming tomorrow, and the justifications for why H2 would be weaker than H1 and why the H2 forecast has even been marginally lowered. In any case, it’s a company in great shape, which is a pleasure to own.
#PukkParty #IncapRocks
Nice news for Monday morning: https://www.inderes.fi/fi/tiedotteet/incap-laajentaa-tuotantotilojaan-intiassa.
Surely, such a significant increase of over 30% in production capacity in India indicates that the company at least has visibility into strong demand development. Considering the company’s recent returns on capital, this will surely bring further benefits to shareholders.
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Expected and welcome news, and it further indicates growing growth and demand. You can hold onto this worry-free.
It’s a shame I gave up on this earlier this year. It was a small position, but I should have held onto it.
The heaviest company in my portfolio. So heavy I’d be ashamed to even admit it. And it just keeps growing, but I’m not complaining. What can you do when it swells like bread dough, and it’s probably not worth selling shares now. Who knows how tough the comparison period will be when we head into next year. Maybe the market knows how to price expectations correctly.
I wonder if the company will be getting a forecast update soon, after the investment news? After all, these are significant additions to the company’s production capacity, which of course will eventually need to be sold to the market. But, if the capacity can be sold, a rather significant upward revision could be expected for the current -21e figures. In an optimistic scenario, I think the figures could be around +100M in revenue and 15M in EBIT, but it would be nice to hear a professional analyst’s view on this as well.
Well, another failure. Unbelievable 
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I tip my hat to the company and the owners. A great story.
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It’s done a hell of a good job this year
@Joonas_Korkiakoski, does Incap know about a clear increase in demand for investments? I think they were ready for this year and next. If there is demand, how quickly can production lines be put into use?
Hi!
Due to the nature of contract manufacturing, the company’s strong order book is typically about a quarter long, which means it is likely that the company does not yet have a significant amount of absolutely certain order flow extending into next year at this stage of the year.
However, the company typically receives preliminary demand forecasts from its customers for a period of 5-6 months, which, together with orders already in the pipeline and previously completed deliveries, draw certain guidelines for the development of future demand. In addition, some customers may provide rolling demand forecasts of up to 12 months, but these, in our estimation, already contain significant uncertainty.
The expansion of the Indian production facility is estimated to be completed in the spring of 2020, while the renovation and upgrade of the production lines at the Estonian unit are estimated to be completed by the end of November. Thus, the company will have new capacity in use quite soon, although we believe the company still has the muscles to respond to increasing order volumes even with its current capabilities. Therefore, we do not believe Incap will find itself in a situation by the end of this year or next year where it would have to say “no” to customers. We have commented on the Indian investment earlier behind the following link: Incap laajentaa Intian tuotantolaitostaan - Inderes
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Thanks Joonas for the comments. However, the expansions are probably part of a longer strategy or some demand needs have been identified, or a customer need is being met more quickly, which may help competitiveness a bit. It’s unlikely that they will go unused.
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India has lowered corporate taxes, and Incap has most of its production there. Will this significantly affect the company’s results?
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Incap has the stars and everything in the right position
It will surely have an effect, and in the long run even more…
Well, nice red numbers on the board. No news, so it’s just following the market in general?
Could add a little cautiously.
It might very well trickle down a bit for a couple of months, until the next interim report in November slaps some good numbers on the table again. The stock price has felt like it’s been oscillating in these kinds of cycles for the past few years.
You might be right. It’s dropped almost 10 percent in a month. Is the future really bleak, or is it that people don’t believe the results have actually grown, even though positive profit warnings have been issued? Could this also be a buying opportunity?
What are the biggest clients? Aitoo and Corvus Energy were mentioned.
No stock price goes straight up, not even Incap’s. Just be patient. Good numbers have already been promised.
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I’m about to add some Incap, but before that, let’s discuss the cyclical nature of Incap and its customers.
It’s known that Incap has a rather risky customer base. The largest customers bring in the lion’s share of the profit (the two largest account for 68%). At the same time, order books are filled only for a few months at a time, so visibility into the future is quite limited. In addition, the Indian factory is being significantly expanded, and production lines are also being developed in Estonia. Money is being spent on these, but there are no guarantees that the freed-up capacity will be utilized. Or is there?
The extensive report names Aidon, Auma, Corvus, ABB, Tokheim, and Sigicom as the largest customers. These don’t tell me much yet, but I need to delve into the operations of the largest customers and their Incap cooperation-based work soon. What kind of views do others have on the cyclical nature of Incap’s customers in relation to Incap’s business? How are the customers doing, and how is this industry doing overall in the short term (1-3 years) and long term (3-15 years)?
So, what I’m mainly looking for here is whether it’s possible to anticipate the filling of Incap’s order books over a longer period than @Joonas_Korkiakoski has described in the reports (max. 5-6 months of order books + advance bookings for a 12-month period) by reading about the customers’ businesses and industry trends?
This still feels quite cheap, so I’d gladly load up more, as there is evidence of profitable growth. On the other hand, the cyclical nature and poor predictability don’t fit my strategy very well, at least when investing with large stakes.
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