HEXPOL AB (publ) (HPOL-B.ST) fair value

ACCE thesis

HEXPOL makes polymer compounds, most notably TPE (thermoplastic elastomer) and nitrile-based rubber compounds for seals, hoses, gaskets and footwear, sold to OEMs across automotive, consumer and industrial end markets. Its moat is less about chemistry than about qualification: once a compound is specified into a customer's part and approved, switching means re-testing and re-certifying, which keeps volumes sticky and lets the company pass through raw material swings. Revenue is growing at 5.7% and operating margin sits at 14.6%, with a 21.0% gross margin, a combination that points to pricing discipline rather than commodity volume. At a forward P/E of 12.9 against a trailing 18.0, the market is pricing in a meaningful earnings recovery, which makes the next few reporting periods on margin recovery the thing to check before anything else.