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Sun Hydraulics NASD: SNHY Industrials Group July 26, 2009 Matt Veryser
Business Description SHNY is a engineer and manufacturer of screw in hydraulic cartridge valves and manifolds. They have operations in the United States, the United Kingdom, Germany, France, Korea, China and India. SNHY sells its products through wholly-owned subsidiaries in a network of independent fluid-power distributors for various applications including construction, agriculture, and utility equipment. As of 2008, foreign sales accounts for approximately 58% of SNHYs total sales. SNHY, headquartered in Sarasota, FL, was founded in 1970 and had its IPO in 1997. Stock Price: 17.86 MKT Cap: 301.37M Business Description
YTD Price Chart Business Description
Key Ratios Revenue Breakdown Q1 (Mar 09) 2008 Net Profit Margin 2.19%  14.44% Operating Margin 3.19% 20.40% EBITD Margin - 24.38% ROA 1.82% 22.07% ROE 2.11% 25.94%
Competitive Advantages Efficient Global Delivery System  SNHY has added machinery to enhance reliability and delivery capacity. SNHY emphasizes the importance of timely and efficient delivery by challenging the suppliers to make similar investments and keep up the pace by with technological advancement. Superior Diverse Product Line  Through internal development and external expansion, SNHY has expanded the product line to provide hydraulic solutions with 100% SNHY products. This was made possible by the advent of electric-hydraulic cartridges and the packages to assemble cartridges with manifolds, rather than having to purchase each part from separate companies and assemble them. Unique Investment Decision Making  SNHY does not employ the traditional capital returns model or ROI analysis for managerial decisions concerning capital projects. Rather, SNHY employs a checklist reviewed by all tiers of employment to verify that capital projects meet worker-friendly and image-building criteria aimed.
Strengths   Focus on hydraulics for concentration of resources and higher quality products  Experienced Management team   Able to provide total hydraulic solutions with 100% SNHY products   First in industry to innovate products by uniting digital technology and CNC manufacturing capabilities
Weaknesses   Relatively smaller company in the industry (industry average market cap: $1.07 billion)   Highly subject of metal and gas prices from the distribution end of the business
Opportunities   Global growth potential as SNHY penetrates new markets   In the ongoing shift to alternative means of energy, hydraulic products may increase in demand
Threats   The industry is well developed with over 60 competitors   Other competitors have yet to, but will eventually also offer hydraulic products with digital support

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  • 1. Sun Hydraulics NASD: SNHY Industrials Group July 26, 2009 Matt Veryser
  • 2. Business Description SHNY is a engineer and manufacturer of screw in hydraulic cartridge valves and manifolds. They have operations in the United States, the United Kingdom, Germany, France, Korea, China and India. SNHY sells its products through wholly-owned subsidiaries in a network of independent fluid-power distributors for various applications including construction, agriculture, and utility equipment. As of 2008, foreign sales accounts for approximately 58% of SNHYs total sales. SNHY, headquartered in Sarasota, FL, was founded in 1970 and had its IPO in 1997. Stock Price: 17.86 MKT Cap: 301.37M Business Description
  • 3. YTD Price Chart Business Description
  • 4. Key Ratios Revenue Breakdown Q1 (Mar 09) 2008 Net Profit Margin 2.19% 14.44% Operating Margin 3.19% 20.40% EBITD Margin - 24.38% ROA 1.82% 22.07% ROE 2.11% 25.94%
  • 5. Competitive Advantages Efficient Global Delivery System SNHY has added machinery to enhance reliability and delivery capacity. SNHY emphasizes the importance of timely and efficient delivery by challenging the suppliers to make similar investments and keep up the pace by with technological advancement. Superior Diverse Product Line Through internal development and external expansion, SNHY has expanded the product line to provide hydraulic solutions with 100% SNHY products. This was made possible by the advent of electric-hydraulic cartridges and the packages to assemble cartridges with manifolds, rather than having to purchase each part from separate companies and assemble them. Unique Investment Decision Making SNHY does not employ the traditional capital returns model or ROI analysis for managerial decisions concerning capital projects. Rather, SNHY employs a checklist reviewed by all tiers of employment to verify that capital projects meet worker-friendly and image-building criteria aimed.
  • 6. Strengths Focus on hydraulics for concentration of resources and higher quality products Experienced Management team Able to provide total hydraulic solutions with 100% SNHY products First in industry to innovate products by uniting digital technology and CNC manufacturing capabilities
  • 7. Weaknesses Relatively smaller company in the industry (industry average market cap: $1.07 billion) Highly subject of metal and gas prices from the distribution end of the business
  • 8. Opportunities Global growth potential as SNHY penetrates new markets In the ongoing shift to alternative means of energy, hydraulic products may increase in demand
  • 9. Threats The industry is well developed with over 60 competitors Other competitors have yet to, but will eventually also offer hydraulic products with digital support