I received a ‘reduce’ recommendation perhaps a bit unexpectedly, although the air has already been pushed out of the earnings day price, and the view could now be a budding ‘add’. This was perhaps further emphasized by how Orthex, in today’s report, was still placed on the ‘Add’ side with the accompanying words: Orthex’s earnings-based valuation (2025e: EV/EBIT 10x, P/E: 13x) is, in our opinion, relatively neutral, and achieving an attractive return expectation thus requires clear earnings growth from Orthex. At the same time, 3-6% revenue growth is forecast, with EBIT gradually improving closer to the 12-13% range, for which the track record is at least variable.
For Viafin’s report, on the other hand, it said this: With the recent rise in the share price, Viafin Service’s return expectation has moderated in the short term. Based on our forecasts, the valuation of Viafin Service’s share for the coming years is, in our opinion, relatively neutral (25-26e: P/E: 13x, EV/EBIT: 9x, EV/EBITDA: 7x). Compared to our accepted valuation range and its lower bound (P/E: 14x, EV/EBIT: 10x, EV/EBITDA: 6x), there would not be significant upside potential in the share at the moment. With 2025E multiples, we are thus at slightly better prices, and at the same time, no significant earnings improvement is forecast (the company’s target state of over 8% EBIT vs. a forecast of 7.0-7.3% far into the future), and the company already has a track record of good acquisitions at a low price. Something that is conspicuously absent in Orthex, even though this was heavily touted during the IPO.
In summary, the views on earnings-based valuation are neutral for both, but one was still slapped with an ‘Add’ and the other with a ‘Reduce’. Which horse would I bet on myself at these valuation levels → the latter, i.e., Viafin. The industries are, of course, completely different classes – metal pipes and plastic pots – and in the hands of different analysts, but I wanted to share my thoughts. I do agree about Viafin’s guidance, that it was surprisingly cautious considering the recently announced acquisitions, and the CEO’s view on market dynamics (regarding H1-H2 outlook) was surprising compared to others.