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After reporting slightly poorer than expected Q1 FY 2013 results, Gemalto is bearing the brunt of investors’ ill humour: negative reading of the MCX contract (USA), the proportion of sales represented by SIM cards (50%), non-recurring items perceived negatively by investors from the English-speaking world, etc. In the short term, the lack of catalysts is causing the share to underperform its sector. At the same time, more negative research (threatening organic growth) has increased the pressure on the share price. We remained convinced of the validity of the group’s strategy and the quality of its fundamentals. However, pending the group’s new multi-year plan (due in H2, probably November), its Q2 results (to end August) could be at risk.
The global leader in chip cards has produced a high-quality set of FY 2012 results that should contain no surprises for the markets. They are slightly below the consensus (which was itself too high, in our opinion), particularly as regards operating performance (with opex increasing in H2). The group is preparing the way for future growth, and strong growth cannot be guaranteed without incurring costs. Profit was also hampered slightly by the Patents business (still loss-making). We continue to believe in the long-term story.
Following the very positive revenues publication for Q3 FY2012, clearly ahead of expectations, Gemalto’s expansion is likely to continue. The EUR 300 million operating profit target for 2013 will be reached already at the end of 2012 (one year earlier than expected first). Beyond this financial year, profit growth might gain further momentum thanks in particular to the stronger development of NFC (Near Field Communication), through TSM (Trusted Services Management) services, with higher demand for smartphones incorporating this technology. The growing importance of LTE standards (4G) in the USA, and then in Asia and Europe, as well as EMV (Europay, Mastercard, Visa) migration on the US market (2013-2015), and then in China, are further catalysts which will help the group double its “addressable” market.
Selected by ISIS (US telecom operators JV for NFC short distance payments), Gemalto is now acknowledged for its expertise in services related to this technology, a market in its infancy whose potential remains seriously undervalued. The group is also a leader in other sectors with the benefit of several catalysts (LTE, M2M, EMV, e-documents, etc.). Attractive prospects and valuation.
The half-yearly results of the world leader in smart cards were posted this morning. They are very robust and generally in line, despite weaker than expected figures for the Telecoms division. The “Secure Transactions” and “Security” businesses largely offset the sluggish performance of the mobile phone SIM cards sector. However, the latter seems to have bottomed out and should return to higher growth in H2 (renewals linked to NFC and LTE/4G). PLUS code confirmed.
Gemalto is active on a market (smart cards) whose potential remains seriously undervalued . The group benefits from an excellent position (leader in its field, exposure to EM, client diversification) in a sector with several catalysts (NFC, LTE, M2M, EMV, e-documents, etc.). Despite the marked seasonal effect (few favourable elements in H1), the group’s valuation remains attractive.
The leading world smartcard manufacturer reported much better than expected FY 2010 results, thanks to the very good H2 operational performance which offset the mixed first six months of the year. The secure payment, M2M and identity/security segments more than compensated for the Telecommunications business which had to contend with development costs of new services. Gemalto remains very positive for 2011 (another year of growth and improved profitability). PLUS code confirmed.
Gemalto is active on a market ( smart cards ) whose potential remains seriously undervalued. This sector is growing strongly. It has three cornerstones: mobile telephony, the strength of which has recently been questioned, secure payment transactions (and progressive introduction of microchip-embedded bank cards and NFC) as well as the emergence of a new market linked to security needs in the public and private sectors.
Q3 sales by the world leader in smart cards were announced this morning and proved better than expected. Organic growth accelerated during the quarter. The excellent performance of the Identity & Security and Payment divisions was a salient feature. In addition, Gemalto announced a strategic alliance with Verifone, the world leader in secure point-of-sale electronic payment solutions. Growth dynamic confirmed. PLUS code maintained.
The half-yearly results announced by the world leader in smart cards this morning were mixed. Although the group’s activity remained very strong during the six months period, the level of profitability (below expectations) clearly disappointed investors. Gemalto, currently in the process of integrating its recent investments, remains positive for H2 2010 and maintains its objectives. Growth and profitability should continue to improve. In our opinion, any price weakness is a good opportunity to buy this share. PLUS code confirmed.
Gemalto is active on a market ( smartcards ) whose potential remains seriously undervalued. This sector is growing strongly. It has three cornerstones: mobile telephony (rapid rise in the number of subscribers across the world and new connected devices); secure payment transactions (and progressive introduction of chip-based bank cards), as well as the emergence of a new market linked to security needs in the public and private sectors.
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