Aixtron on good dynamics

High-tech equipment manufacturer Aixtron is currently on the rise. Risk-averse investors can take full advantage of this success with the leveraged securities offered by Swiss DOTS.

“Happiness never comes alone” – this may be the new saying of Aixtron. Not only are the numbers released a few days ago for the first quarter impressive, but the stock price, according to a technical indicator, will benefit from a strong buy signal. The 100-day moving average is indeed on its way to cross the 200-day moving average – this is called the “golden cross”, one of the most famous high momentum signals. So now is the perfect time to get up close and personal with the high-tech German equipment manufacturer.

Strong demand fuels double-digit growth

Many car manufacturers are currently suffering from falling demand. Thus, due to the war in Ukraine, new orders in March were below the level of last year in Germany, for the first time since the beginning of 2021. However, the situation is quite different at Aixtron: driven by the energy-efficient GaN power electronics sector, new orders rose by 5% between January and March. Thus, the total order book increased by 16% and reached 260.4 million euros. Other activities – SiC power electronics and optoelectronics for lasers – also contributed. “As expected, the demand for our technology remains as strong as ever,” says CEO Felix Gravert. According to Berenberg analysts, Aixtron is likely to maintain double-digit order growth over the medium term.

This influx of orders bodes well for Aixtron’s continued success. The company started 2022 with a bang: in the first quarter, turnover increased by 79% to 88.6 million euros. As such, the company accelerated its growth rate even further as it posted growth of “only” 44% in the fourth quarter of 2021. This strong momentum allowed the operating result (Ebit) to turn positive again. The Board of Directors confirmed its targets for the year: a turnover of 450 to 500 million euros and an Ebit margin of 21% to 23%. To give an idea, Aixtron surprised last year by hitting a margin of 22.6%, which could very well be repeated in 2022.

Technical excellence as the key to success

If the near future seems to be smiling at the chip and LED maker, its medium to long term prospects don’t seem to be beaten as the German company now seems imminent. The latest study by consulting firm Gartner shows that in 2021, Aixtron’s share of the semiconductor industry’s sputtering equipment market increased for the sixth year in a row and now stands at 75%. “This trend should continue in the coming years and thus put Aixtron in an increasingly monopoly position, resulting in a significant revaluation of the title. That’s what we’re seeing with chip supplier ASML in the lithography market,” explains Olivia Honeyhurch, analyst at Jefferies. This type of deposit equipment is essential for both servers and smartphone batteries or even for a 5G network.

The company’s technical superiority is not the result of chance, as it invests heavily in the future. Last year, at least 13.2% of turnover was dedicated to research and development (R&D). Thus, Aixtron is an exception in the mechanical engineering sector, where the average R&D level is around 4%. Companies even have nothing to envy in the IT sector. According to Ernst & Young, in 2018 the average level of R&D of large European groups in this industry reached 12.6%.

A wise investment

All Aixtron signals are green, both fundamental and technical indicators. The company reaches new heights. Those looking to take advantage of this strong momentum should look into the Société Générale Factor Certificate (value 112199076), a product that offers a permanent leverage effect of 4.

While factor certificates are particularly suitable for short-term speculation, unlimited turbo warrants are the best product for medium-term trend betting. More cautious investors may opt for a lower leverage level for added security. Long turbo (value 118008348) offers a multiplier of 3.0 and a difference of 27% over the stop threshold (€19,695). The SocGen derivative (value 118846605) is a bit more offensive, with a leverage of 5.1. The knockout is 23,685 euros, so the difference with the underlying asset is only 12%.

Aixtron chart (over 1 year)

2022.06.20.Aixtron Chart

06/20/2022 Turnover and Ebit dynamics
Source: Extron

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