Buy Signal on Plastic Omnium (POM-FR)
Plastic Omnium is a €3.2 Bn market cap, and the world leader in intelligent body systems, clean energy systems and automotive modules. Revenue are mainly achieved with smart and clean energy body systems (75% of sales) including body parts (bumpers, energy absorption systems, tailgates, spoilers, fenders, sills) and storage and fuel supply; and secondly front unit modules (25% of sales) including shock absorption beams, lighting and engine cooling systems, active grille shutters, radars and driving assistance sensors.
Plastic Omnium is expect to post a c.240m€ loss in 2020, and to recover in 2021 with a c.180m€ profit. Sales and profit are expected to exceed 2019 levels in 2022 (revenue of 9bn€ coupled with a c.300m€ net profit).
Besides the Automotive market which is expect to improve progressively and recover in 2021, Plastic Omnium is also a bet on the Hydrogen storage. In september, the company won a new contract for hydrogen storage systems with VDL, a Dutch heavy duty vehicle manufacturer. This contract represent a further success, following the order of 350-bar bus tanks for a German manufacturer in late 2019 and the certification of its 350- and 700-bar tanks. The Group estimates the production will grow up to 2 million vehicles in 2030.
Short term catalyst: China recovery/Hydrogen Storage.
This signal looks consistent with the strong momentum on the European Automotive segment.