| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 3.50 | -96 |
| Intrinsic value (DCF) | 41.70 | -57 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 3.40 | -97 |
SinterCast AB (publ) is a Swedish industrial technology company specializing in process control solutions for the production of compacted graphite iron (CGI), primarily serving the foundry and automotive industries. Founded in 1983 and headquartered in Stockholm, the company provides automated systems like the System 4000 and Mini-System 4000, which enable precise CGI production control for high-volume and niche applications. SinterCast's offerings include sampling consumables, engineering services, and traceability tools such as the SinterCast Ladle Tracker and Cast Tracker, enhancing efficiency in metallurgical processes. With a strong focus on innovation, SinterCast supports automotive manufacturers in developing lightweight, durable engine components, aligning with global trends toward fuel efficiency and emission reduction. The company's technology is critical for producing CGI, which offers superior strength and thermal conductivity compared to traditional cast iron, making it essential for modern engine designs. Listed on the London Stock Exchange, SinterCast operates globally, catering to leading foundries and automotive suppliers.
SinterCast presents a niche investment opportunity in the industrial technology sector, with a focus on CGI production control—a critical component for automotive manufacturers seeking lightweight, high-performance materials. The company's strong financials, including SEK 135.6 million in revenue and SEK 34.3 million in net income (FY 2024), reflect steady profitability. Its low beta (0.724) suggests lower volatility compared to the broader market, making it a relatively stable industrial play. However, reliance on the automotive sector exposes SinterCast to cyclical demand fluctuations. The dividend yield (3.05 SEK per share) and solid operating cash flow (SEK 59.6 million) enhance its appeal to income-focused investors. Risks include limited diversification beyond CGI technology and potential competition from alternative material solutions.
SinterCast holds a unique position as a leader in CGI process control technology, with its System 4000 being an industry standard for high-volume foundries. Its competitive advantage stems from proprietary thermal analysis and automation, ensuring consistent CGI quality—a critical factor for automotive clients. The company's deep expertise in metallurgy and strong customer relationships (including long-term contracts with major foundries) create high switching costs for clients. However, the niche nature of CGI production limits its total addressable market compared to broader metallurgical solutions providers. SinterCast faces indirect competition from alternative materials like aluminum and advanced steel alloys, which are gaining traction in lightweight automotive applications. The company mitigates this by emphasizing CGI's superior thermal and mechanical properties for specific engine components. Its global footprint and technical support services further differentiate it from smaller regional players. While no direct competitors offer identical CGI control systems, broader industrial automation firms could potentially encroach on its space with competing solutions.