Paragon Shipping Inc (O:PRGN) shares have performed strongly since our September 2015 initiation, supported by recent newsflow from CES 2016, Chinese smog concerns and electromobility. These all demonstrate that paragon is focused on current trends with further embedded growth potential, as highlighted by its December guidance for FY16 following recent strong Q3 figures across all divisions. The combination of substantial contract wins for the group’s Voltabox division and the ramp-up of the new US and Chinese production facilities provides further growth catalysts, while the group is becoming increasingly decoupled from pure automotive volumes.
Q3 results demonstrated growth potential
paragon’s November 2015 Q3 results demonstrated the growth potential in the group, with nine-month revenue up 20.4% and the EBIT margin almost doubling to 6.8% despite heavy investment in new product development, internationalisation and expansion capex. This growth was achieved across all divisions, with particular strength in the cockpit business, up 18%. Management confirmed that it expects full year revenues to be up to €100m, while post-investment EBIT margins are guided to be in line with the previous year following the opening in China.
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