“Many companies are candidates for their IPO”


How is the mid cap sector doing?

The trend is quite similar to that of large caps, as during the Covid period, when in the past the dropouts were more severe. The Cac Mid & Small index has fallen by 12.7% since the start of the year, with no major difference with the Cac 40 (-14.5%). The decline is clearer for the Cac Small (-16.9%) than for the Cac Mid 60 (-11.8%). In the mid-cap segment, there has been no net inflow for two years on the secondary market. This is necessarily a brake on the progress of the courses. The other driver is earnings growth. It is still expected to reach double digits, both for 2022 and 2023.

But we will have to be vigilant during the publication of the half-year results, which begins in a month and will end in September. We have to reckon with the slowdown in global growth, wage inflation and that of raw materials. At the end of the Portzamparc Conference, we will publish a summary document, to outline a trend. Even if we do not yet properly measure the ability of listed companies to maintain their margin levels, I think that current prices already partly integrate the downward revisions to come. Indeed, the valuation of average stocks is rather lower than the historical average, at 13 times the estimated 2022 earnings and 10 times those expected for 2023. We have found a discount compared to the large stocks of the Cac 40, valued at 15 and 13 times respectively. This gap is due to higher risk, lower liquidity in the event of a crash.

Are you well placed in terms of IPOs?

We focus on IPOs where the amount raised is between 15 and 150 million euros. In a less dynamic market, we are continuing at the same pace as in 2021, when we introduced 8 stocks. Our fourth IPO is underway, that of OKWind, after Haffner Energy, Lhyfe and BroadPeak. This represents one in two IPOs, whereas our natural market share is more like one in four or five. We also have two other mandates before the end of the year. And we are already preparing for 2023, with companies in the energy transition sector, bioplastics, waste reprocessing, CO2 capture. There are always as many candidates on the company side.

Advisors from issuers such as Lazard, Allegra, Sponsor Finance, Alcé Equity or Namsen approach us on behalf of their clients. Our historical reputation is an asset. In fact, over the past eight years, we have accompanied the company which received the Euronext prize for the best IPO of the year on six occasions. 70% of our transactions are detected by the BNP Paribas network and its business bank for SMEs and ETIs, which includes corporate finance businesses. Thanks to a fine network of the territory, this network identifies opportunities, companies with which there is a long-standing traditional banking relationship.

As for investors, the pool has shrunk since the beginning of the year given the high volatility. But we still have “long hands”, or ” corner stone », ready to commit in advance to subscribe between 25% and 50% of the share issue to ensure its success. This is the case of management companies such as CDC, Arbevel, Vatel, Sycomore, Eiffel, Mirova, Admiral, or even Amundsen or Handelsbanken. For several years, we have been developing our investment strength with European management companies interested in entering the capital of innovative French ETI SMEs. In addition, the launch of Euronext Tech Leaders will lead to the creation of new funds dedicated to tech, in particular by Caisse des dépôts, for 300 million euros from 2022, and again by Amiral Gestion.

What is your research device? And your favorite values?

We have a team of ten financial analysts sell side, which track 135 SME and ETI stocks, one of the largest coverages on the market in France. The office of financial analysts publishes a monthly High Five list, where we currently find companies such as Spie, Entech and Quadient. And, every six months, we update our Convictions list, which currently includes Fountaine Pajot, SII, Dontnod, Metabolic Explorer and Lisi.




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