Intrinsic Value Icape Holding S.A. (ALICA.PA)

• Previous Close: €5.96
• Intrinsic Value: €4.28
• Upside potential: -28%

Stock Valuation Context

Business Model And Market Position

Icape Holding S.A. operates in the hardware, equipment, and parts sector, specializing in the manufacture and sale of printed circuit boards (PCBs) and customized technical components. The company serves a global clientele with a diverse product portfolio, including single- and double-sided PCBs, aluminum boards, multilayer and HDI PCBs, as well as flexible and rigid-flex solutions. Beyond PCBs, Icape offers a range of technical parts such as cables, connectors, transformers, and CNC-machined components, catering to industries requiring precision engineering. Its online platform, cipem-shop.com, enhances accessibility for customers seeking specialized electronic components. Positioned as a niche player in the technology supply chain, Icape differentiates itself through customization capabilities and a broad product suite, addressing both prototyping and mass production needs. The company’s focus on high-margin, technically complex products allows it to maintain a competitive edge in a fragmented market dominated by larger multinationals. With a foundation in France and a global footprint, Icape leverages regional expertise while capitalizing on international demand for specialized PCB solutions.

Revenue Profitability And Efficiency

In its latest fiscal year, Icape Holding reported revenue of €181.7 million, with net income of €3.7 million, reflecting a net margin of approximately 2%. The company generated €7.3 million in operating cash flow, demonstrating moderate cash conversion efficiency. Capital expenditures of €1.96 million suggest disciplined reinvestment, aligning with its focus on maintaining operational agility rather than aggressive expansion.

Earnings Power And Capital Efficiency

Icape’s diluted EPS of €0.46 indicates modest earnings power relative to its market capitalization. The company’s capital efficiency is tempered by its debt load, with total debt standing at €66.8 million against cash reserves of €26.7 million. Operating cash flow coverage of debt appears adequate, though leverage remains a consideration for long-term sustainability.

Balance Sheet And Financial Health

Icape’s balance sheet shows €26.7 million in cash and equivalents, providing liquidity against €66.8 million in total debt. The net debt position of €40.1 million suggests a leveraged but manageable structure, supported by stable operating cash flows. The company’s financial health hinges on maintaining profitability and working capital efficiency to service its obligations.

Growth Trends And Dividend Policy

Revenue growth trends are undisclosed, but the company’s dividend payout of €0.13 per share signals a commitment to shareholder returns despite its modest net income. The dividend yield, based on current market capitalization, appears sustainable but leaves limited room for aggressive reinvestment or debt reduction.

Valuation And Market Expectations

With a market capitalization of €62.8 million and a beta of 0.26, Icape trades with low volatility, reflecting its niche positioning. The valuation multiples suggest the market prices the stock conservatively, likely due to its small scale and leveraged balance sheet. Investor expectations appear tempered, focusing on stability rather than high growth.

Strategic Advantages And Outlook

Icape’s strategic advantage lies in its specialized PCB and technical parts offerings, which cater to diverse industrial applications. The company’s ability to deliver customized solutions provides a moat against commoditization. However, its outlook depends on sustaining margins amid competitive pressures and managing leverage. Expansion into high-growth segments like HDI and flexible PCBs could drive future performance if executed prudently.

Sources

Company description, financial data from public filings, and market data from EURONEXT.