AB Dynamics Shares ‘Offer Compelling Value’ Says Analyst

AB Dynamics (LON: ADBP) delivered a mixed first-half performance, but Zeus Capital is standing firmly behind the automotive testing specialist, arguing its shares “offer compelling value” after a period of underperformance driven largely by temporary headwinds in China.

The company reported H1 revenue of £48.8 million and adjusted operating profit of £9.1 million, both down 16% year-on-year, reflecting delayed order intake and weaker-than-anticipated volumes at its VadoTech Testing Services business in China.

The Group also booked exceptional items of £16.8 million related to VadoTech, the majority a non-cash impairment charge. On the positive side, operating margins held steady at 18.6%, net cash strengthened to £39.3 million, and the interim dividend was raised 10% to 3.08p.

Empfohlener Broker Multi Asset Platform

Social-Trading-Pionier mit Aktien, ETFs, Krypto und CFDs, Copy Trading inklusive. eToro

5.0

Weitere Informationen 50% of retail investor accounts lose money when trading CFDs with this provider.

Zeus Capital left its forecasts unchanged following the results, maintaining a 1,800p price target and continuing to forecast “c.25% growth in adjusted PBT over FY26E–FY28E.”

The broker notes that on a cash-adjusted basis, AB Dynamics trades on roughly 13x CY26 earnings versus around 16x for the Zeus UK Industrial Sensors & Measurement sector.

Zeus Capital sees structural tailwinds firmly intact, noting that OEMs are shifting towards “more capital-efficient development models” favouring suppliers with scalable digital platforms.

The broker also flags the company’s ambition to double revenues to around £200 million and triple operating profit to around £60 million over the medium term, with around £100 million of potential acquisition funding capacity and four active targets currently under review.

At current levels, Zeus Capital adds that AB Dynamics “could itself represent an acquisition target.”