Skellerup Holdings Limited

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Skellerup Holdings Limited (NZX: SKL) is engaged in designing, manufacturing and distributing polymer products and vacuum systems. SKL operates under two divisions viz: Industrial and Agri.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders: The top 10 shareholders have been highlighted in the chart, which together forms ~21.83% of the total shareholding.

1.4 Key Metrics:

The company has delivered a record audited net profit after tax of NZD47.8 million in FY22, an improvement of 19% on the record result achieved in the prior period. Further, the company has reported an improvement in EBITDA margin to reach 24.9% in FY22 from 24.1% in FY21. The ROE improved to 23.5% in FY22 from 21.1% in FY21.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

2.2 Financial Highlights:

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

4.2 Fundamental Valuation

Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is October 31, 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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