(News Bulletin 247) – Oddo confirms its ‘neutral’ rating on the Kone share, with an unchanged price target of 49 euros.
According to the broker, Kone’s analysis of the beginning of the year concerning China is confirmed with in particular a decline to be expected of around 10% in new equipment (after -20% in 2022) and relief measures ( should allow promoters to be less constrained in terms of liquidity) which should bear fruit from H2.
Finally, the services business is set to be very dynamic in China (slightly less than 20% of Chinese sales), especially modernization with growth rates of 30-40% per year in recent years.
In this context, the CFO confirmed the group’s objective to improve the EBIT margin in 2023 (ODDO BHF at +70bp, at 10.6%).
The overhaul of the group’s operating model should also lead to the reduction of 1,000 positions (i.e. 1.6% of the workforce), will cost 130 ME in restructuring charges (the bulk recorded in 2023) and will allow cost savings of 100 ME in full year (2024), reports Oddo.
Finally, ‘inflation will remain a burden in 2023 and the rebound in China, both in its timing and in its magnitude, remains uncertain’, concludes Oddo.
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