LONDON, April 17, 2013 /PRNewswire/ --
Edison Investment Research, a leading international investment research firm, announces the initiation of coverage of PSI AG, a German control and automation software company.
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Edison has recently published a comprehensive report examining the investment merits of PSI AG, focusing on the scope to steadily expand margins by growing licensing sales, changing the sales mix to higher-margin work from international markets, moving to a single development platform and lowering staff costs. In the report, Solving complex control problems, Edison's Edwin Lloyd argues that the company's solutions simplify complex control challenges and reduce costs, for example by optimising labour to lower the cost of manufacture and reducing repairs, and can prevent catastrophic failure from occurring. These features should ensure demand throughout an economic cycle.
The German migration from conventional energy sources to more renewables and the elimination of all nuclear power generation mean that 2013 may not be the year in which domestic demand returns, but investment in the German power grid will need to start at some stage in the future. Orders from international markets have grown from 21% of sales in 2007 to 47% in 2012, so Edison feels the company's strategy of expanding east, focusing on Eastern Europe, China, South-East Asia and the Gulf States provides ample scope for growth. On a P/E basis, PSI trades in line with a selection of peers, albeit an imperfect one, although few share PSI's potential for margin expansion. A DCF assuming six years of growth and four years of margin expansion returns a fair value of €20.3 per share, nearly 30% above the current share price. A 1% increase in EBIT margin increases the value by €1.5 per share.
For the full report see: http://www.edisoninvestmentresearch.com/research/company/psi.
The launch of coverage on PSI AG is part of a programme of research initiations on technology companies exposed to global market opportunities. Edison provides detailed research coverage on over 65 technology companies in Europe, North America and Australia. Its technology research team provides a range of coverage across small-, mid- and large-cap companies. All published Edison reports are available to download free of charge from its website http://www.edisongroup.com.
About Edison Investment Research
Edison, the investment intelligence firm, is the future of investor interaction with corporates. Our team of over 100 analysts and investment professionals works with leading companies, fund managers and investment banks worldwide to support its capital markets activity. We provide services to more than 400 retained corporate and investor clients from our offices in London, New York, Berlin, Sydney and Wellington. Edison is authorised and regulated by the Financial Services Authority (http://www.fsa.gov.uk/register/firmBasicDetails.do?sid=181584). Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.
About PSI AG
PSI develops and integrates software control systems focusing on three main segments: (1) Energy Management delivers intelligent utility solutions for electricity, gas, oil and water; (2) Production Management supplies software for production planning, control and logistics; and (3) Infrastructure Management provides solutions for monitoring and operating critical transport, public safety, environmental and disaster-prevention infrastructures.
For more information please contact:
Edwin Lloyd, Edison Investment Research, +44(0)20-3077-5700
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