Some thoughts on CS
1. Covid affect on numbers needs to be considered.
2. I have compared with Resmed who make breathing machines for sleep apnea. But CS more of a PPE manufacturer so caution warranted on comparison.
3. In short, CS makes an EBITA margin to sales of 38% versus Resmed at 31%. Very similar.
CS gross profit to sales is 75% versus Resmed at 60%.
As CS grows then reckon a lot will fall to bottom line as they get economies of scale with expenses.
4. Return on Assets is for CS at 40 % and compares with Resmed at 41%. Very similar. ( Have excluded goodwill from Resmed balance sheet for this calculation )
PRICING
In my view CS has been priced very cheaply relative to Resmed.
If CS lists at a Resmed type price then CS should trade at around $7. Very unlikely though.
CONCLUSION
CS is an excellent business being sold at a cheap price relative to Resmed.
Given size differences between two businesses reckon CS worth around $5 to $6 .A premium of about 15 to 40% on IPO price of $4.41.
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