1H23 Revenue (excluding second-hand business) increased 11.1% year over year
Ferretti S.p.A. announced 1H23 results: Net revenue (excluding second-hand business) increased 11.1% year over year to 567 million euros, new orders added 574 million euros, and on-hand orders increased 15.8% year over year to 1,411 million euros, mainly driven by an increase in custom yacht orders (25.5% year on year) and superyacht orders in hand (19.5% increase).
1H23, Asia Pacific (94% year over year) led revenue growth, followed by Europe, Middle East and Africa (11% year over year), while the Americas (down 16% year on year) had some drag on growth. By type, superyacht revenue recorded strong growth (33% year over year), while net revenue from integrated yachts increased 11% year over year, and custom yacht revenue increased 3% year over year.
In 1H23, the Group's adjusted EBITDA increased 20.9% year on year to 83 million euros, corresponding to 14.7% profit margin (vs. 13.5% of 1H22), return net profit increased 37% year on year to 40.45 million euros, corresponding to 7.1% profit margin (vs. 5.8% of 1H22), mainly due to increased operating leverage.
On June 27, 2023, Ferretti Group completed its two listings in Milan, Italy, after Hong Kong, China, and issued 88.7 million shares at a price of 3 euros each. After Milan's listing, freely traded shares accounted for 54.7% of the company's total share capital (of which 26.2% were free-floating shares in Milan).
Development trends
We believe that the company's listing in Milan has a significant positive effect on improving stock liquidity, improving valuation benchmarks, and expanding the investor base.
We attributed the steady double-digit year-over-year increase in 1H23 revenue to the company's increased penetration rate in the Asia Pacific region. This move was due to the company's continued investment in sales network construction and capacity expansion. 1H23's profit margin improvements are due to increased operating leverage, particularly in terms of personnel and service costs.
Profit forecasting and valuation
We kept our profit forecast for 2023 and 2024 unchanged, and maintained an outperforming industry rating and a target price of HK$33 (corresponding to 6.2 times the 2023 EV/EBITDA), which is 34.7% upward from the current stock price. The current stock price corresponds to 4.2 times the 2023 EV/EBITDA.
risks
Capacity is limited; competition intensifies.