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1、 abc Global Research Event: We took Safts management on a three-day road-show across Europe. The company reiterated the following 2012 guidance points: (1) 2% sales growth on a comparable structure basis, implying stronger sales growth in H2 (+6% HSBCe) than in H1 (-2.5%), and (2) EBITDA margin betw
2、een 16.5% and 17.0%, although we think that the final figure will be closer to the lower end of this range due to the losses incurred by the Jacksonville plant (EUR16m for 2012e). Analysis: In our view, the key question now is how quickly will the new lithium battery markets develop, and how quickly
3、 will Saft be able to secure sizeable production (rather than development) contracts in order to boost the utilisation rate of its two plants (Nersac and Jacksonville). We continue to believe Saft is well placed to benefit from the emergence of new lithium battery market segments, although we think
4、that the Nersac and Jacksonville plants will not have enough production activity to reach breakeven before 2014. In this note we revise our estimates slightly, on the back of lower than expected figures at Jacksonville. Valuation: On 1 January 2013, Johnson Controls (JCI US, USD26.2, NR) will transf
5、er the Nersac plant (France) to Saft. In our note on 13 July 2012, we highlighted that we value the Jacksonville and Nersac plants together, as they will share the same technology and the same end user markets. We have also assumed that Saft will achieve its sales guidance for these plants one year
6、later than it assumes, ie sales of USD100m in 2014 (not 2013) and USD200m in 2016 (rather than 2015). We value the two plants at EUR3/share (based on a multiple of 2016e EBITDA discounted back to 2013 at a 10% rate. This is probably too conservative relative to Jacksonvilles construction costs (USD2
7、00m, or cEUR6/Saft share). However, some uncertainties remain regarding the ramp-up of these facilities, even if Saft has already answered to bids totalling more than 100MWh in terms of battery capacity in H1 2012 (USD100m based on a price of USD1,000 per kw/h). Our peer comparison approach implies
8、a value for Safts traditional activities of EUR23. To this, we add a value of EUR3 for the Jacksonville plant, arriving at our 12-month target price of EUR26, unchanged. We maintain our Overweight rating on the stock. Catalysts: We see a number of potential catalysts: (1) the ramp up of the Jacksonv
9、ille and Nersac plants will be a deciding factor behind consolidated sales growth in 2013 and beyond. In particular, the signing of major renewable energy storage solution contracts could boost the share price; (2) the development of smart grids in Europe for energy storage solutions, but also for s
10、mart metering. Saft Groupe SA (SAFT FP) OW: Road-show feedback 2012 guidance reiterated, implying stronger sales growth in H2 (+6% estimated) than in H1 (-2.5%) Well placed to benefit from the emergence of new lithium battery market segments, but Nersac/Jacksonville unlikely to reach breakeven befor
11、e 2014 in our view EUR26 target price and Overweight rating unchanged Mid Cap Conglomerates Equity France 16 October 2012 Pierre Bosset * Analyst HSBC Bank plc, Paris branch +33 1 5652 4310 View HSBC Global Research at: http:/ *Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not
12、 registered/qualified pursuant to FINRA regulations Issuer of report: HSBC Bank plc, Paris branch Disclaimer each battery will cost between EUR100,000 and EUR150,000; A number of corporate fleets could become all electric. Nevertheless, it will remain a niche market. No sales are expected on this se
13、gment before 2014. 2 Affordable micro hybrid (small voltage batteries for passenger cars). Saft has linked up with Valeo (FR FP, EUR35, N(V), TP EUR36), one of the world leaders for the stop-start system. The cost of this micro hybrid could be EUR1,000 to EUR1,500 per battery according to Saft, whic
14、h would just provide a boost during the acceleration. It would help the CO2 emission reduction. We do not expect any sales before 2015. 3 Limited series and competition vehicles; Saft is already supplying batteries for Formula 1 teams. This will remain a very small market. 6 Saft Groupe SA (SAFT FP)
15、 Conglomerates 16 October 2012 abc Defence: Saft had been awarded a development programme contract by BAe Systems in 2012 (for an undisclosed amount) for ground combat vehicle. Lithium ion batteries could bring a number of properties such as a lighter weight, longer life However, given the current c
16、onstraints on budget deficit both in Europe and North America; it is difficult to gauge the potential size of the market in the coming years. It is difficult to make forecasts in the short term as all these opportunities are new markets and/or will require potential customers to change their habits/
17、products. In the medium term, there is some potential for a very significant demand in numerous segments, but the ramp up is difficult to gauge. Another illustration of this uncertainty is the fact that Saft has chosen a very modularized solution for the Jacksonville plant. Next year it will have 3
18、production lines up and running with a total sales capacity of USD300m. However, the company has bought a land big enough to accommodate a doubling in the size of the plant if necessary. Target price unchanged at EUR26 Valuation of Jacksonville and Nersac plants: EUR3 In January 2013, Saft will gain
19、 full control of Nersac in France. We value Jacksonville and Nersac together, as they will share the same technology and the same end user markets. We have also assumed that Saft will achieve its sales guidance for these plants one year later than it assumes, ie sales of USD100m in 2014 (not 2013) a
20、nd USD200m in 2016 (rather than 2015). Using a DCF, we value Safts new factory in Florida at EUR3 per share. We make some conservative assumptions, below the guidance given by the company itself. Our valuation at EUR3 compares with a historical investment (grant included) of EUR6 per share (includin
21、g USD95m of cash grants). Exhibit 4: Jacksonville therefore, we are reiterating our OW rating on Saft stock. Potential return equals the percentage difference between the current share price and the target price, including the forecast dividend yield when indicated. 8 Saft Groupe SA (SAFT FP) Conglo
22、merates 16 October 2012 abc Risks The downside risks to our Overweight rating on Saft are mainly related to the new activities and their potential rate of development, including: The emergence of new technologies rivalling Safts own; Safts inability to win new contracts to supply batteries to variou
23、s end-user markets, and hence the fact that the Jacksonville and Nersac plants will operate at very low utilisation rates of capacity; Higher raw material prices (nickel, lithium, etc), which would squeeze margins. For the record, Saft is hedging 60% of its nickel needs over the next 6 months. Annua
24、lly Saft buys 2000t of Nickel; The rate of development of new markets including in particular renewable energy storage solutions; A weakening of the USD against the EUR, which would weigh on Safts sales and EBIT. Based on our estimates, in 2015, 50% of group sales will be billed in USD versus 40% at
25、 present. 9 Saft Groupe SA (SAFT FP) Conglomerates 16 October 2012 abc Disclosure appendix Analyst Certification The following analyst(s), economist(s), and/or strategist(s) who is(are) primarily responsible for this report, certifies(y) that the opinion(s) on the subject security(ies) or issuer(s)
26、and/or any other views or forecasts expressed herein accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Pierre Bosset Important disclosures St
27、ock ratings and basis for financial analysis HSBC believes that investors utilise various disciplines and investment horizons when making investment decisions, which depend largely on individual circumstances such as the investors existing holdings, risk tolerance and other considerations. Given the
28、se differences, HSBC has two principal aims in its equity research: 1) to identify long-term investment opportunities based on particular themes or ideas that may affect the future earnings or cash flows of companies on a 12 month time horizon; and 2) from time to time to identify short-term investm
29、ent opportunities that are derived from fundamental, quantitative, technical or event-driven techniques on a 0-3 month time horizon and which may differ from our long-term investment rating. HSBC has assigned ratings for its long-term investment opportunities as described below. This report addresse
30、s only the long-term investment opportunities of the companies referred to in the report. As and when HSBC publishes a short-term trading idea the stocks to which these relate are identified on the website at Details of these short-term investment opportunities can be found under the Reports sectio
31、n of this website. HSBC believes an investors decision to buy or sell a stock should depend on individual circumstances such as the investors existing holdings and other considerations. Different securities firms use a variety of ratings terms as well as different rating systems to describe their re
32、commendations. Investors should carefully read the definitions of the ratings used in each research report. In addition, because research reports contain more complete information concerning the analysts views, investors should carefully read the entire research report and should not infer its conte
33、nts from the rating. In any case, ratings should not be used or relied on in isolation as investment advice. Rating definitions for long-term investment opportunities Stock ratings HSBC assigns ratings to its stocks in this sector on the following basis: For each stock we set a required rate of retu
34、rn calculated from the cost of equity for that stocks domestic or, as appropriate, regional market established by our strategy team. The price target for a stock represents the value the analyst expects the stock to reach over our performance horizon. The performance horizon is 12 months. For a stoc
35、k to be classified as Overweight, the potential return, which equals the percentage difference between the current share price and the target price, including the forecast dividend yield when indicated, must exceed the required return by at least 5 percentage points over the next 12 months (or 10 pe
36、rcentage points for a stock classified as Volatile*). For a stock to be classified as Underweight, the stock must be expected to underperform its required return by at least 5 percentage points over the next 12 months (or 10 percentage points for a stock classified as Volatile*). Stocks between thes
37、e bands are classified as Neutral. Our ratings are re-calibrated against these bands at the time of any material change (initiation of coverage, change of volatility status or change in price target). Notwithstanding this, and although ratings are subject to ongoing management review, expected retur
38、ns will be permitted to move outside the bands as a result of normal share price fluctuations without necessarily triggering a rating change. *A stock will be classified as volatile if its historical volatility has exceeded 40%, if the stock has been listed for less than 12 months (unless it is in a
39、n industry or sector where volatility is low) or if the analyst expects significant volatility. However, stocks which we 10 Saft Groupe SA (SAFT FP) Conglomerates 16 October 2012 abc do not consider volatile may in fact also behave in such a way. Historical volatility is defined as the past months a
40、verage of the daily 365-day moving average volatilities. In order to avoid misleadingly frequent changes in rating, however, volatility has to move 2.5 percentage points past the 40% benchmark in either direction for a stocks status to change. Rating distribution for long-term investment opportuniti
41、es As of 15 October 2012, the distribution of all ratings published is as follows: Overweight (Buy) 47% (27% of these provided with Investment Banking Services) Neutral (Hold) 38% (27% of these provided with Investment Banking Services) Underweight (Sell) 15% (20% of these provided with Investment B
42、anking Services) Share price and rating changes for long-term investment opportunities Saft Groupe SA (S1A.PA) Share Price performance EUR Vs HSBC rating history Source: HSBC Recommendation HK The Hongkong and Shanghai Banking Corporation Limited, Hong Kong; TW HSBC Securities (Taiwan) Corporation L
43、imited; CA HSBC Bank Canada, Toronto; HSBC Bank, Paris Branch; HSBC France; DE HSBC Trinkaus 000 HSBC Bank (RR), Moscow; IN HSBC Securities and Capital Markets (India) Private Limited, Mumbai; JP HSBC Securities (Japan) Limited, Tokyo; EG HSBC Securities Egypt SAE, Cairo; CN HSBC Investment Bank Asi
44、a Limited, Beijing Representative Office; The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch; The Hongkong and Shanghai Banking Corporation Limited, Seoul Securities Branch; The Hongkong and Shanghai Banking Corporation Limited, Seoul Branch; HSBC Securities (South Africa) (Pty)
45、 Ltd, Johannesburg; HSBC Bank plc, London, Madrid, Milan, Stockholm, Tel Aviv; US HSBC Securities (USA) Inc, New York; HSBC Yatirim Menkul Degerler AS, Istanbul; HSBC Mxico, SA, Institucin de Banca Mltiple, Grupo Financiero HSBC; HSBC Bank Brasil SA Banco Mltiplo; HSBC Bank Australia Limited; HSBC B
46、ank Argentina SA; HSBC Saudi Arabia Limited; The Hongkong and Shanghai Banking Corporation Limited, New Zealand Branch incorporated in Hong Kong SAR Issuer of report HSBC Bank plc, Paris branch 15, rue Vernet 75419 Paris Cedex 08, France Tlphone: +33 1 40 70 70 40 Fax: +33 1 58 13 96 48 Website: Th
47、is document has been issued by HSBC Bank plc, Paris branch (HSBC) for the information of its customers only. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. HSBC has based this document on information o
48、btained from sources it believes to be reliable but which it has not independently verified; HSBC makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the Research Department of HSBC only and
49、 are subject to change without notice. HSBC and its affiliates and/or their officers, directors and employees may have positions in any securities mentioned in this document (or in any related investment) and may from time to time add to or dispose of any such securities (or investment). HSBC and its affiliates may act as market maker or have assumed an underwriting commitment in the securities of companies discussed in this document (or