Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on PEUGEOT SA. We currently have 21 research reports from 1 professional analysts.
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One of the worst takeover mistakes
20 Feb 17
… is to keep the management team of the target unchanged. Takeovers are often unsuccessful and one mistake in these instances has been not to change management. PSA seems to be willing to make this mistake simply to keep German politicians and unions calm. In fact, Opel’s CEO has indicated that the company will stay independent from the parent company, at least for a while. But this management team has shown in the past that it cannot turn Opel around. One might argue that this is the result of GM’s policy to prohibit Opel from selling its cars, in sizeable quantities, outside Europe. However, this is only half of the problem. The other is that the car producer has not been able to turn its bottom line around at a time when the European market was booming, i.e. either costs were too high or prices too low. What is going to happen if demand softens again? The competition in prices will then intensify yet again and Opel’s losses will rise. As PSA is also not immune to this (both are selling the same types of cars and are going for the same clients), the combined group is likely to experience another severe setback.
PSA willing to buying an asset-light company?
14 Feb 17
Rumours suggest that PSA is interested in buying Opel/Vauxhall from GM. At the beginning of the current decade, it was Magna that was interested but finally gave up. The reasons were manifold: the target was not allowed to sell its cars outside Europe and the company was not the owner of its own name and not of any patents. These were owned by GM and the parent company was not willing to give these rights up.
Asian business needs to be refocused
25 Jan 17
Except for Iran, PSA showed a dismal performance in Asia in 2016. Deliveries fell by 16% to 618,352 vehicles in China and 16% to 19,886 in India & Pacific. To improve penetration in the Indian market, PSA has now signed a cooperation agreement with CK Birla Group which is expected to start producing in 2020. PSA’s initial investment will be €100m. The first joint-venture will be holding a majority stake in a joint subsidiary with ‘HMFCL’ which will produce cars for distribution in India (initial capacity of 100,000 units). This partner is currently a joint-venture partner of Mitsubishi. The second 50/50 joint-venture is with ‘AVTEC’ and this will produce powertrains. CK Birla was known as Hindustan Motors which went bankrupt in 2013.
Falling deliveries in a booming market
11 Jan 17
Thanks to the inclusion of 233,000 vehicles produced by a joint-venture in Iran, PSA shows delivery growth of 5.8% to 3.15m vehicles for 2016. Excluding this number, deliveries were down by 2% to 2.91m. With the exception of Europe (+3.6% to 1.93m) and LatAm (+17% to 183,907), the regional picture shows falling numbers everywhere else when Iran is excluded. In fact, with a delivery fall of 16% to 618,352 in China & Southeast Asia, the group’s foothold seems to be coming under intensifying pressure there. We had expressed our doubts whether Dongfeng is the right partner to bring PSA’s Chinese position forward. This performance is the more disappointing when looking at the Chinese market growth rate of more than 15% in 2016. Unfortunately, the group is not giving any explanation for the European discrepancy between registrations and deliveries. Through to November 2016, registrations were up by only 0.8% to 1.37m vehicles in the EU and EFTA countries and the performance was not much different in Europe’s largest markets in December (full-year European numbers will be out on 17 January). As a result, we believe that PSA’s inventory has increased considerably at the dealer network.
PSA signs €8bn, 5-year logistics contract with Gefco
03 Nov 16
Starting on 1 January 2017, Gefco (25% controlled by PSA with the remainder owned by the Russian Railway) will exclusively provide PSA with the global manufacturing supply chain. Gefco will not only source the components and deliver them to the production plants, it will also deliver final cars to clients around the world. In addition, it will distribute spare parts. According to PSA, this contract is worth €8bn or €1.6bn annually. We regard this contract as being excessively expensive. PSA produces around 3m cars annually. Dividing the above amount (€1.6bn annually) by the number of vehicles translates into costs of more than €500 per vehicle. As PSA’s ex-factory sales price is extremely low (a good €12,000), logistic costs will consume around 4.5% of a vehicle’s sales price.
Volume and revenue fall accelerated in Q3
26 Oct 16
PSA now includes the vehicles produced by a joint-venture in Iran in its published volume numbers. Including these, shipments were up by 11% to 0.68m in Q3 and 2.9% to 2.23m ytd. Simultaneously, revenue fell by 8% to €11.4bn in the last quarter and by 5.1% to €39.2bn ytd.
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
Small Cap Breakfast
16 Feb 17
Saffron Energy—Schedule One update. Raising £2.5m, expected Mkt Cap £7.7m. Admission due 24 Feb. Italian Oil & Gas Play Guinness Oil & Gas Exploration—Publication of prospectus. Seeking to raise £50m and invest in 15 exploration companies at launch, with plans to grow the portfolio to 30 positions during its lifetime. Issue closing 23 Feb. Arix Bioscience — Intention to float on the main market from the global healthcare and life science Company supporting medical innovation. Raised £52m in Feb 16 with investors including Woodford Investment Management
13 Feb 17
Surface Transforms* (SCE): H1 results confirm operational progress (CORP) | Premaitha Health* (NIPT): European diagnostics partnership (CORP) | Lok'nStore* (LOK): Filling existing stores, developing new ones (CORP) | Victoria* (VCP): Entry into the European flooring market (CORP) | eg solutions* (EGS): Exceptional H2 performance (CORP)
Share & share alike
14 Feb 17
The rally in the last fortnight, highlighted in the table, reflects a continued flow of positive updates and economic news. The FTSE 250, Small cap and Fledgling indices have reached record highs. We are in the lull ahead of results for those companies with a December year end, a welter of economic data regarding the UK economy, the State of the Union address in the US on 28 February and the UK Budget on Wednesday 8 March. We will learn at that stage the latest forecasts from the Office of Budget Responsibility. As highlighted previously, the reaction to corporate updates will continue to set the tone.