GICS Sector : Consumer Cyclical
Kamux Oyj engages in the retail and wholesale of used cars.As of April 21, 2022, it operated 77 car showrooms in Finland, Sweden, and Germany, as well as through digital channels.It also offers financing and insurance products; and sells used cars in auctions, as well as various integrated services to consumer and corporate customers.
Kamux reported a 17% decline in revenue, primarily due to a decrease in the number of cars sold, although the average price of cars sold was also lower as planned. Despite this, the company's focus on profitability paid off, with gross margin increasing from 9.8% to 10.9%. Earnings per share (EPS) came in at €0.06, slightly below estimates of €0.065. Cash flow remained strong, at €31.5 million for the first nine months of the year, and inventory levels were considered healthy heading into the quieter period towards the end of the year.
Publication Date: Nov -20
The company's used car markets grew in Finland and Germany, while remaining flat in Sweden. Kamux maintained its position as the #1 player in the Finnish market by number of cars sold, was #8 in Sweden, and had a relatively small market share in Germany. Consumer preference for affordable cars continued across all markets, and customer satisfaction was at a good level, with an NPS of 63% in Finland.
As Juha Kalliokoski noted, "If I start, you must choose your games where you want to win. And we choose in last spring the profitable business and we started there." The company prioritized profitability over volume, which resulted in improved gross margins in Finland and Sweden. In Germany, however, the company faced challenges and is working to turn profitability around. The company's strategy involves balancing volumes and profitability, leveraging existing store capacity, and improving business operations.
With a P/E Ratio of -117.63 and a P/S Ratio of 0.09, the market appears to have already priced in significant challenges. The company's long-term EBIT margin target of 4% at the group level and revenue growth estimate of 5.1% for next year suggest potential for improvement. Analysts should monitor the company's ability to balance profitability and volume growth, as well as its progress in turning around the German business. The Dividend Yield of 3.39% and Free Cash Flow Yield of 30.24% are attractive, indicating a potentially undervalued stock.
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Kamux Oyj's 8% growth in used cars is driven by increasing demand for affordable vehicles, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digitalization, efficient pricing, and customer-centric approach have contributed to its success. Furthermore, Kamux Oyj's ability to offer a wide range of certified used cars with warranties has enhanced customer trust and loyalty, leading to repeat business and positive word-of-mouth.
Kamux Oyj's 7% growth in Financing Fees and Insurance Commissions is driven by increasing vehicle sales, expansion into new markets, and strategic partnerships with financing institutions. Additionally, the company's focus on digitalization and process efficiency has improved its ability to offer competitive financing options, attracting more customers and increasing revenue.
Kamux Plus, a used car subscription service, drives 10% growth through increasing market share in Finland and Sweden, expansion into new markets, and rising demand for flexible car ownership solutions. Additionally, the service's competitive pricing, wide car selection, and hassle-free experience attract price-conscious consumers, contributing to its growth momentum.
Kamux Oyj sells a wide range of used cars from various brands, including passenger cars, vans, and trucks.
Kamux Oyj offers car inspection and maintenance services to ensure vehicles are in good condition and meet safety standards.
Kamux Oyj provides warranty and insurance services to protect customers from unexpected repair costs and provide financial security.
Kamux Oyj offers financing and leasing services to help customers acquire vehicles with flexible payment options.
Kamux Oyj sells vehicle accessories and spare parts to enhance the performance and appearance of vehicles.
The threat of substitutes for Kamux Oyj is moderate due to the presence of alternative options for customers, but the company's strong brand reputation and customer loyalty mitigate this threat.
The bargaining power of customers is low due to Kamux Oyj's strong market position and the lack of concentration among customers.
The bargaining power of suppliers is moderate due to the presence of multiple suppliers, but the company's large scale of operations gives it some negotiating power.
The threat of new entrants is high due to the relatively low barriers to entry in the automotive retail industry, but Kamux Oyj's established brand and market position provide some protection.
The intensity of rivalry is high due to the competitive nature of the automotive retail industry, with many established players competing for market share.
| Value | |
|---|---|
| Debt Weight | 21.60% |
| Debt Cost | 4.39% |
| Equity Weight | 78.40% |
| Equity Cost | 10.78% |
| WACC | 9.40% |
| Leverage | 27.55% |
Value: 9.1
Growth: 6.1
Quality: 2.8
Yield: 5.6
Momentum: 6.0
Volatility: 6.0
1-Year Total Return ->
Value: 5.7
Growth: 4.7
Quality: 2.9
Yield: 8.1
Momentum: 5.5
Volatility: 5.3
1-Year Total Return ->
Value: 7.4
Growth: 6.2
Quality: 5.8
Yield: 6.2
Momentum: 0.5
Volatility: 4.7
1-Year Total Return ->
Value: 9.1
Growth: 2.9
Quality: 2.0
Yield: 7.5
Momentum: 0.5
Volatility: 3.7
1-Year Total Return ->
Value: 3.4
Growth: 5.1
Quality: 3.2
Yield: 0.0
Momentum: 10.0
Volatility: 1.7
1-Year Total Return ->
Value: 8.8
Growth: 3.8
Quality: 2.5
Yield: 0.0
Momentum: 4.0
Volatility: 0.0
1-Year Total Return ->