| In its annual financial report as of December 31, 2022, Borgosesia reported a total value of production value of € 32.42 million, up 25.9% on the previous year’s figure of € 25.76 million. EBITDA is also growing (€ 12.29 million versus € 11.96 million in 2021), while the Gross Operating Margin was equal to € 15.78 million. EBIT was equal to € 11.56 million, compared to the FY21A value of € 11.36 million, thus recording a growth of 2.5%. Net Income reached € 8.16 million, up 3.7% on the value recorded at the end of the previous year, equal to € 7.87 million In light of the results published in the annual report for FY22A, we have adjusted our estimates for both the current year and the coming years. In particular, we estimate an FY23E value of production equal to € 43.00 million, and an EBITDA of € 16.35 million, corresponding to a margin of 38.0%. In the following years, we expect the value of production to rise to € 55.20 million (CAGR 22Y-27E: 11.2%) in FY27E, with EBITDA equal to € 21.55 million (corresponding to a margin of 39.0%), up from € 12.29 million in FY22A (corresponding to an EBITDA margin of 37.9%). We conducted our valuation of the equity value of Borgosesia based on the DCF method and multiples of a sample of comparable companies. The DCF method (including, for prudential purposes, a specific risk of 2.5% in the calculation of the WACC) returned an equity value of € 109.6 million. Using market multiples, the equity value of Borgosesia was € 62.0 million (including a discount of 25%). The result gives an average equity value of approximately € 85.8 million. The target price is € 1.80, with a BUY rating, and MEDIUM risk |