Basler AG: A German Company Well Positioned in the Chinese and South Korean Markets

Basler is a German company that specializes in the manufacturing of industrial digital cameras with applications in:

  • industrial production
  • traffic systems
  • medical technology
  • life sciences and retail.

Basler exports its products worldwide; its most important end market is Asia (China and South Korea in particular). Its revenue is strongly growing in Asia, whereas it is declining in the EMEA region (Europe, the Middle East and Africa). Asian revenue made up 37% of the total in 2015, and grew further to 46% in 2016. In the Americas region, revenue growth is slowing. Germany, China and South Korea remain the biggest markets for Basler.

Basler’s History

Basler was founded in 1988 by Norbert Basler and Stephan Berendsen. In the following years, it started expanding into foreign countries. Its digital camera division was launched in 1997. The company was listed on the Frankfurt stock exchange in 1999.

During the recession that followed the 2007 subprime crisis, Basler’s business suffered. In the following years the company started to focus more on its digital camera business and sold some divisions in other sectors.

Basler’s Financials

As we can see in the chart below, Basler’s revenue has grown continuously since 2010. Revenue growth sharply increased in the first nine months of 2017; this was caused by increases in demand in all its industries and regions.

The graph below illustrates how Basler’s business was negatively influenced by the 2007 economic recession. As is well known, the global financial crisis turned later into an economic crisis. The effects can be seen in the performance of EBIT and net income. Basler’s EBIT and net income skyrocketed in the first nine months of 2017.

Basler’s Ownership

Basler’s founders control the majority of the company’s shares. Therefore, a hostile takeover is unlikely. The free float amounts to 36% of the total shares.

The presence of majority shareholders represents a strength for a company as they usually define clear goals and keep the management under control. Hence, this is a factor that can reassure minority shareholders.

Basler’s Stock Price

The graph above illustrates Basler’s stock performance over the last twelve months, compared to that of the DAX Technology All Share Index. As we can see, Basler has outperformed the index used as a benchmark. Basler’s share price has increased by a stunning 164% over the period, whereas the index has risen by only 29%.

Conclusions

Basler is a very interesting company that came to my attention because of its high volatility during the summer of 2017. Its great financial performance in the first nine months of 2017 has translated into a strong stock performance that has led the company’s market cap to exceed €700 million.

Its high growth in the Asian markets puts the company in a position to exploit the economic growth of Asian countries, whereas its geographic distribution of revenue makes the company more solid in case of regional economic crisis.

I will therefore put Basler in my personal stock watchlist to keep monitoring its evolution in the future.

What do you think about Basler? Would you buy this stock?

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