The target price of Teraplast shares would set between 0.977-1.105 lei/share, according to analysts. Teraplast shares are traded at an average discount of 50% compared to the fair value settled according to various evaluation parameters based on sales, operating profit, net profit and own capital of similar companies in Europe.
Calculated at the target price, Teraplast’s capitalization would set between RON282 and RON319 million. Wednesday, Teraplast shares on the Bucharest Bourse closed at RON0.504 per unit, at a trading value of RON145 million.
The positive financial results in the first semester is the main reason indicating an expected boost of Teraplast share price one year from now. The company’s net profit was threefold higher in the first semester, at RON11.2 million, while the turnover was up 19%, at RON118 million compared with the same period a year before. Also, Teraplast has a solid and diversified client database, including at exports. Some 20% of the company’s sales go to export.
One the other hand, the seasonal nature of the constructions sector, which is still affected by the financial crisis, is one of the main shortcomings. Moreover, the construction sector development is tightly connected to the state’s appetite for investments.
Also, the company’s operating costs are fluctuating due to the raw materials price, which increased 50% in the first semester. As a result of loans taken during previous years to overcome financial crisis, Teraplast’s short-term financial debts represent 73% of the company’s total debts, which “indicates certain deficiencies in the working capital management,“ analysts added.
Another important reasons that could prevent Teraplast share price from growing is the shares low liquidity level.
Dorel Goia owns a 46.7% stake in Teraplast, while Finnish investment fund KJK owns 10%, while Hungarian construction materials distributor Marley holds a 7.9% stake.
(English version by Manuela Panescu)