Cicor is an electronics manufacturing services (EMS) company with ~60 years of history, and we view it as a highly competitive player within complex manufacturing processes that require niche expertise. We argue that Cicor's structural growth outlook and margin expansion warrant a pricing closer to peers, especially given its exposure to the rapidly growing defence industry, a key driver of margin expansion. We see M&A as likely in the very near term. With non-organic growth on management's agenda, we model self-funded M&A scenarios offering up to ~20% additional upside potential, although we do not include this in our valuation range. We initiate commissioned coverage of Cicor with a fair value range of CHF 160-200, based on different DCF scenarios, triangulated with peer multiples.
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