Mrkt BUZZ Zinzino: Continued strength in Q3

Equity research Zinzino

Zinzino had a lukewarm second quarter of 2022, with profitability below our expectations. However, preliminary sales figures for May showed a recovery in the growth rate, which was 3.3 per cent year-on-year. In July, growth accelerated to 9.7 per cent. The pick-up in growth was confirmed in the preliminary sales figures for August, where growth reached a strong 15.8 per cent.

Developments in the Nordics, Central Europe and APAC can be considered the most important markets for the case. Unfortunately, the Nordic region continues to hamper the company’s development. However, as shown in the table below, the Nordic region was the only market with negative growth. It is clearly positive that Central Europe is accelerating its growth (to 35 per cent in August compared to 25 per cent in May and 23 per cent in July). That is while APAC can show solid growth for the second month (68 per cent in August and 52 per cent in July). That indicates that the inertia experienced by the company in this market is beginning to ease. Note also North America, which stands out with a growth of 113 per cent.

Based on the strong sales figures reported so far for the third quarter, we are marginally increasing the fair value per share in a base case scenario to SEK 41.8 (41.4). However, profitability in the current quarter comes into even sharper focus.

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