Daldrup & Söhne Aktiengesellschaft (4DS.DE) fair value

ACCE thesis

Daldrup & Söhne builds and services the drilling rigs used for horizontal directional drilling and water well work, along with the drill pipe and tooling that go with them, and it sells that equipment into a niche most large oilfield suppliers ignore. Its edge is an engineering and service footprint small enough to be responsive yet specialised enough that few competitors match it on equipment quality and aftermarket support. The main driver is the infrastructure cycle: revenue growth of 121.1% over the period in the data signals a sharp upswing in orders, though that rate is unlikely to persist and should be checked against backlog and order intake. At 16.8 times trailing earnings and 15.4 times forward, with a return on equity of 28.9% and an operating margin of 14.3% on a 56.4% gross margin, the valuation is not stretched for the profitability on offer. The 143 million euro market cap and absence from any index mean liquidity and coverage are thin, which is both a source of mispricing and a practical constraint on position size.