In this financial analysis report, analysts Adam Widmark and Fanny Strandberg take a closer look at the Danish kitchen manufacture company TCM Group (TCM). The analysts estimate a revenue CAGR of 8.1% until 2024E resulting in a revenue of DKK 1.4bn and an EBIT margin of 14.3% in 2022E is projected. The peer-based valuation justifies an applied EV/EBIT multiple of 12.1, resulting in a target price of DKK 162.2 and a potential upside of 20.2%.
Investment highlights:
- TCM is one of the most profitable kitchen furniture manufacturers and well-positioned for future profitability in the Danish market, which amounted to 93% of TCM’s revenue in 2020A.
- Renovation projects stand for 80-85% of revenue, which historically has proven to be resilient against economic downturns.
- Increased focus towards digitalization in line with TCM’s online sales channel expansion. In 2021 TCM acquired a 45% stake in Celebert, a Danish kitchen e-commerce business.
