In today’s briefing:
- Amaero International Ltd – Atomiser on schedule for 30 June commissioning
- Emerson Electric Co.: How Will The Adoption of Advanced Power Grid Management Software Impact Future Revenues? – Major Drivers
- Wizz Air – Opportunity to Shift Focus from P&L Distortion to Cash Flow Clarity
Amaero International Ltd – Atomiser on schedule for 30 June commissioning
- RaaS has published an update report on advanced materials manufacturing group Amaero International (ASX:3DA) following its announcement that the first atomiser has been installed at its Tennessee facility and is expected to be commissioned by 30 June. Key points from our report: • Installation and cold testing of the atomiser has been completed and hot testing of the atomiser has commenced on schedule. • In conjunction with commissioning, Amaero expects to produce two tonnes of titanium alloy (Ti64) powder. Following commissioning and cleaning of the atomiser, the company says it expects to commence parameter optimisation for production of C103 powder. Amaero says it expects to deliver initial samples of C103 powder to its offtake counterparty by mid-August. • The company’s announcement is in line with our forecasts for production timing and powder type. • We have adjusted our cost estimates, in particular employee costs in the near term and for conservatism have increased our estimates for research and development costs, without incorporating income estimates for government grants. • Our base-case DCF valuation is now $1.25/share fully diluted (previously $1.37/share) while a +15/-15% sensitivity analysis to our base-case valuation provides a valuation range of $0.67 to $1.72/share.
Emerson Electric Co.: How Will The Adoption of Advanced Power Grid Management Software Impact Future Revenues? – Major Drivers
- Emerson Electric reported a robust operating performance for the second quarter of 2024, surpassing their expectations.
- The buoyant operating performance was driven by strong demand in process and hybrid markets, which aligns with significant macroeconomic trends like energy affordability and security, nearshoring, digital transformation, and sustainability.
- The company’s underlying sales rose by 8%, with operational leverage standing at 54%, resulting in a 140 basis point EBITDA expansion to 26%.
Wizz Air – Opportunity to Shift Focus from P&L Distortion to Cash Flow Clarity
- Wizz Air’s FY24 contained multiple distortions; we disaggregate cash flow dynamics to show an improving picture.
- Capacity restraint has been enforced by engine issues, not zero growth in FY25 is producing high single-digit % unit revenue gains.
- We see an opportunity for Wizz Air to rise above distortion to earnings from engine issues and compensation by providing incremental cash flow clarity.
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