{"id":79,"date":"2013-06-25T16:27:16","date_gmt":"2013-06-25T16:27:16","guid":{"rendered":"http:\/\/bluegemresearch.co.za\/?p=79"},"modified":"2015-09-14T06:19:13","modified_gmt":"2015-09-14T06:19:13","slug":"accentuate-ltd-ground-floor-and-positioned-for-upside","status":"publish","type":"post","link":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/?p=79","title":{"rendered":"Acc\u00e9ntuate Ltd: Ground Floor and Positioned for Upside"},"content":{"rendered":"<p><em>Initiation of Coverage<em>\u00a0\u2013\u00a0<\/em>Share Code: ACE \u2013 Market Cap: R94m \u2013 PE: 9.5x \u2013 DY: 0.0%<\/em><\/p>\n<p><strong><a href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2013\/06\/Accentuate_Initiation-of-Coverage.pdf\">Download Accentuate Initiation of Coverage Here<\/a><\/strong><\/p>\n<p><strong>Business Overview: A Group of attractive businesses<\/strong><\/p>\n<ul>\n<li><span style=\"line-height: 1.714285714; font-size: 1rem;\">Floorworx is the most significant player in the South African resilient flooring market and stands to gain from the National Healthcare Insurance (NHI) driving hospital refurbishments and expansion. In the long term it should benefit from the eventual roll-out of the pent-up infrastructure spend in South Africa.<\/span><\/li>\n<li><span style=\"line-height: 1.714285714; font-size: 1rem;\">Safic is an industrial chemical business in the fast-growing chemicals market with strong linkage into and synergies with Floorworx.<\/span><\/li>\n<li><span style=\"line-height: 1.714285714; font-size: 1rem;\">Ion Exchange Safic is 40%-held, early-stage (but extremely promising) water treatment solutions business with key backing by its large Indian-listed parent, Ion Exchange India Ltd.<\/span><\/li>\n<li><span style=\"line-height: 1.714285714; font-size: 1rem;\">Acc\u00e9ntuate has de-risked its balance sheet, streamlined its various businesses and now begun to focus on growth. NHI spend should help near-term revenues, public sector infrastructure roll-out should drive medium-term revenues and Ion Exchange Safic offers long-term blue sky optionality.<\/span><\/li>\n<\/ul>\n<p><strong>Key Issues: Macro-economic uncertainty<\/strong><\/p>\n<ul>\n<li><span style=\"line-height: 1.714285714; font-size: 1rem;\">Despite the promising businesses in Acc\u00e9ntuate\u2019s stable, the Group\u2019s prospects rely very much on the activity, timing and quantum of a recovery in the local construction and infrastructure markets. While the long-term prospects of these sectors remain positive, there remains significant short-term macro-economic uncertainty.<\/span><\/li>\n<\/ul>\n<p><strong>Forecast, Valuation and Implied Return: Appears very inexpensive<\/strong><\/p>\n<ul>\n<li><span style=\"line-height: 1.714285714; font-size: 1rem;\">We have pegged our valuation to our segmentally-driven SOTP DCF model, implying that ACE has a fair value of 114cps. This would put the share on a comfortable 10.6x PE and also implies that the current share price of 85cps undervalues Acc\u00e9ntuate by c.35%.<\/span><\/li>\n<li><span style=\"line-height: 1.714285714; font-size: 1rem;\">Rolling forward our fair value, we arrive at a 12m TP of 132cps with an Exit PE of 11.0x,\u00a0which is slightly elevated due to Ion Exchange Safic adding to our valuation but its operations not yet adding to the Group\u2019s profits. <\/span><\/li>\n<li><span style=\"line-height: 1.714285714; font-size: 1rem;\">Our 12m TP implies an attractive c.56% return.<\/span><\/li>\n<li><span style=\"line-height: 1.714285714; font-size: 1rem;\">Finally, even if Ion Exchange Safic is excluded from our valuation (assumed to be of nil value), the share&#8217;s fair value still appears between 90cps to 100cps, thus lending some comfort to our view that the share is currently undervalued.<\/span><\/li>\n<\/ul>\n<p><strong><a href=\"http:\/\/v7l6z8c7j6p.c.updraftclone.com\/wp-content\/uploads\/2013\/06\/Accentuate_Initiation-of-Coverage.pdf\">Download Accentuate Initiation of Coverage Here<\/a><\/strong><\/p>\n<p>What do you think of Acc\u00e9ntuate? <a title=\"What do you think of Acc\u00e9ntuate?\" href=\"mailto:info@bluegemresearch.co.za\" target=\"_blank\">Let us know&#8230;<\/a><\/p>\n<p><em>See our <a title=\"Methodology\" href=\"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/?page_id=9\" target=\"_blank\">methodology<\/a> here and note our disclaimer <a title=\"Disclaimer\" href=\"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/?page_id=17\" target=\"_blank\">here<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Initiation of Coverage\u00a0\u2013\u00a0Share Code: ACE \u2013 Market Cap: R94m \u2013 PE: 9.5x \u2013 DY: 0.0% Download Accentuate Initiation of Coverage Here Business Overview: A Group of attractive businesses Floorworx is the most significant player in the South African resilient flooring market and stands to gain from the National Healthcare Insurance (NHI) driving hospital refurbishments and [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[17,18,25,14,8,21,27,23,24,15,26,19,22,20],"class_list":["post-79","post","type-post","status-publish","format-standard","hentry","category-accentuate_jse","tag-accentuate","tag-ace","tag-altx","tag-analyst-reports","tag-blue-gem-research","tag-floorworx","tag-initiation-of-coverage","tag-ion-exchange","tag-ion-exchange-safic","tag-jse","tag-keith-mclachlan","tag-research-report","tag-safic","tag-small-cap"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/79","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=79"}],"version-history":[{"count":18,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/79\/revisions"}],"predecessor-version":[{"id":189,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/79\/revisions\/189"}],"wp:attachment":[{"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=79"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=79"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/v7l6z8c7j6p.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=79"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}