Edison Initiates Coverage on Sealegs Corporation
LONDON, August 6, 2013 /PRNewswire/ –
Edison Investment Research, a leading international investment research firm,
announces the initiation of full coverage of Sealegs Corporation (SLG), the innovative
amphibious craft manufacturer.
Sealegs has developed an innovative boating solution for the transition between land
and water that is attracting increasing international interest. The company has come
through a period of restructuring and is now targeting faster growth with new products and
market opportunities. A DCF of the existing business equates to near the current share
price, suggesting the growth opportunities are in effect for free.
The company’s history is in manufacturing boats and has sold over 750 amphibious boats
to more than 30 countries during the past 10 years, although 80% of sales in recent years
have been to New Zealand, Australia, the US and the UK. The business is transitioning from
selling solely boats to a growth strategy of selling technology kits to other boat
manufacturers via a licensing arrangement, although it will continue to manufacture its
own boats. The company is experiencing strong interest in its technology kits from both
the recreational and professional boat markets. It is developing a new product for larger
boats (up to 12m), which is more suited to military, marine rescue and law enforcement
The stock trades below its peers on an EV/sales basis, but at a premium on an earnings
basis. The stock price appears to fully reflect the value of the existing business,
assuming a steady state, but does not reflect any of the growth potential of its new
products. Our combined DCF model for both the existing and new business values the company
at NZ$0.26 or 53% above the current share price.
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SOURCE Edison Investment Research