IBD看好Polypore Intl

IBD报导，Polypore Intl(代號:PPO) 是一家拥有微孔膜技术的全球领先企业，专门生产用于分隔和过滤的各种薄膜和光纤，包括分隔离子电池、血液、水或是任何其它用途。虽然混合动力汽车尚未开始使用锂电池，但这却是汽车未来的发展趋势。随着主要汽车生产商着力于混合动力汽车的生产，他们急需更多的分离锂离子而非铅蓄电池，因此这方面的市场需求是巨大。除此以外，锂电池在便携式电动工具、电子自行车以及用以发电的蓄水池方面也有广泛使用。因此为Polypore拥有极大的业务空间，William Blair分析师Jeff Germanotta表示：“随着锂电池打入了众多市场领域，我们认为公司业绩将有良好增长。”

Robert W. Baird分析师Richard Eastman表示：“这是一个人人关注的领域，电池行业即将迎来一次行业变革。” Polypore正是使用锂离子制造分离器的三大企业之一，拥有巨大的市场空间。由于还为其它产品诸如汽车电池等提供零件，公司必须保证业务朝着正确方向发展。但是终端产品的销售状况不佳，公司的CFO Lynn Amos认为这是公司面临的最大挑战，他表示：“在某种程度上，公司能够成功与否取决于合作伙伴的成功，因此你得选对人。”

Lithium Ion Batteries Should Give Its Filtering Products A Charge
Tuesday June 24, 5:57 pm ET
Steve Watkins

You don't see much of what Polypore International makes.

It makes thin films or fibers that are used to separate and filter a lot of things, whether it's ions in batteries, parts of blood, water or any of a host of other uses. But the results of its work aren't often visible to the naked eye.

"The things we filter, if you could see it, it would be a boulder by our standards," said Polypore (NYSE:PPO - News) Chief Financial Officer Lynn Amos.

It focuses on two areas: energy storage, mainly in batteries, and what it calls separation media. The latter involves filtering anything that requires an increased level of purity, such as water.

Energy storage makes up about 70% of sales. Polypore is the world's leader in making separators used for lead-acid batteries, such as those in your car. It has about 60% of the market in that field.

But it's also a major supplier for lithium ion batteries. That high-growth area features batteries used for laptops, cell phones and other electronic devices. It's also where the greatest growth opportunity lies.

Hybrid vehicles haven't started using lithium ion batteries, yet, but they will. With every major car maker working on hybrid cars, and each one needing more separators for lithium ion than they do for lead-acid batteries, the opportunity is enormous.

Beyond that, lithium batteries are gaining use in portable power tools, electronic bikes and in power storage for utility companies. It all spells opportunity for Polypore.

"As lithium penetrates a number of markets, we think they have a lot of runway for growth ahead," said Jeff Germanotta, analyst at William Blair.

And hybrid vehicles haven't even been made yet with lithium ion batteries. The first, by Mercedes, is expected to be launched late this year. So that hasn't even been a source of Polypore's growth yet. But all car makers are moving to lithium batteries.

"That's the transition everybody is looking at," said Richard Eastman, analyst at Robert W. Baird. "It's somewhat of a revolution in the battery industry."

Polypore is one of just three companies that make the separator material used in lithium ion batteries, so the opportunity is huge.

It's among the leaders in its other areas, too. Those include making membranes used to filter blood for kidney dialysis. In fact, its niche areas have grown at a 20% clip over the past six quarters.

Its diversity and high-tech expertise set it apart from rivals, Amos says. It's a technical business, and Polypore has a lot of patents.

"We believe we have the broadest portfolio of products, breadth of product and technology know-how," Amos said.

Also, its specialization in thin films or fibers gives it an edge, analysts say.

"They have industry-leading technology in every market they play in," said Brian Drab, another analyst at William Blair. "This management team has its finger on the pulse of technology advancements."

The high-tech nature of its business and management expertise boosts its margins, Germanotta says. Those combine to give it cash-flow margins that are nearly double its peer groups.

"We think they're well-positioned for superior long-term growth," he said.

Polypore is already showing growth in the short term. First quarter sales rose 13% to $145.3 million. Profits more than tripled to 26 cents per share from 8 cents a year ago. Analysts polled by Thomson Reuters expect earnings to soar 116% this year to 95 cents per share. They see 21% profit growth next year to $1.15.

It's grown through small, selective acquisitions, too. In January it bought a distributor in India.

"We think India will be the next China," Amos said.

It also bought another company in March and a South Korean firm in May that will add to earnings next year.

The overseas moves are not surprising. About two-thirds of Polypore's sales come from outside the Americas, Amos says.

It's typically got more that it can do than it should do.

"Our challenge is not finding growth opportunities, but finding the right ones," Amos said. "We can guarantee technical success, but not commercial success."

Because it supplies parts used in other products, such as car batteries, it has to bet on the right horse. Some end products might not sell. Amos calls that the company's biggest challenge.

Eastman also cited that as a risk.

"To some degree, your success is tied to your partners' success," he said. "You have to pick the right partner."

Customer concentration is another factor. When it picks the right partner, it gets a boatload of sales from that partner. Its top five customers make up one-third of sales.

"If a big customer departs, you'll feel it," Eastman said.

Polypore also has a relatively high debt load with $833 million in long-term debt. But analysts and Amos downplay that. The firm throws off enough cash flow to offset that. And it used money from its initial public offering last year and a later stock offering to pay down debt.

"Our debt is very manageable for us," Amos said.

The slow U.S. economy is less of a concern. Recurring revenue such as from replacement car batteries makes up 75% of its sales. And people still do kidney dialysis, regardless of the economy.

And then there are the broader trends, such as lithium ion batteries.

"It's our belief the secular drivers trump the cyclical drivers," Germanotta said.