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EDISON INVESTMENT RESEARCH LIMITED Edison Investment Research Limited: Edison issues QuickView on Trackwise Designs (TWD)

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18/09/2020 15:49

Edison Investment Research Limited
Edison Investment Research Limited: Edison issues QuickView on Trackwise Designs (TWD)

18-Sep-2020 / 14:49 GMT/BST


 

London, UK, 18 September 2020

Edison issues QuickView on Trackwise Designs (TWD)

Trackwise Designs has signed a three-year product manufacture and supply agreement with a UK electric vehicle OEM. The agreement is potentially worth up to £38m in total, subject to pricing revisions, and will generate up to £5.0m in revenues in FY21. This will be the first full series production of flexible circuits incorporating Trackwise's Improved Harness Technology (IHT). The agreement represents a step change in sales as total revenues for H120 were £2.4m, of which IHT was only £0.3m.

 

First half revenues, while up 55% y-o-y, imply a reduction in FY20 consensus estimates. Our peer multiples-based analysis shows Trackwise's shares trading towards the upper end of the range of year 2 P/E multiples for our sample of advanced printed circuit board manufacturers (mean is 13.6x, with CMK at 21.3x and KCE Electronics at 26.2x). This suggests that the shares would be fairly priced at current levels if Trackwise was merely another specialist printed circuit board (PCB) manufacturer rather than the inventor of a disruptive technology such as Ceres Power or Ilika. However, this approach fails to recognise the potential of the IHT business. We will explore the value ascribable to this activity in our initiation note following the publication of interims next week.


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About Edison: Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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1133817  18-Sep-2020 

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