Edison issues initiation on PVA TePla (TPE): Material matters

London, UK, 10 Mai 2024

Edison issues initiation on PVA TePla (TPE): Material matters

PVA TePla has transitioned from a small seller of industrial systems to a materials technology and metrology solutions company, set to reach c €280m in revenues in FY24. Its increasing exposure to the fast-growing semiconductor industry (more than two-thirds of sales) and high-end materials markets is securing growth, driven by AI, digitisation and e-mobility. The combination of a higher capital intensity in the semiconductor industry and growing end markets bodes well for players like PVA TePla, which are exposed to the fast-growing part of equipment sales like metrology. Despite this, PVA TePla is still largely valued as an industrial company, trading at a significant discount to peers and our DCF.

PVA TePla is trading at an FY25e EV/EBITDA of 6.8x on our estimates. This is much lower than European semiconductor equipment makers (average of c 20.6x), inspection/process control companies (22.5x) and also lower compared to advanced materials players (11.0x). As such, we believe that PVA TePla’s transformation is not reflected in its valuation. Our DCF valuation arrives at a fair value of €35.26 per share. 

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