Ross Turner Long Infineon Technologies: Sohn London Conference

We're posting up notes from the Sohn London conference 2017.  Next up is Ross Turner of Pelham Capital who pitched a long of Infineon Technologies (ETR:IFX).


Ross Turner's Sohn London Presentation

Infineon is a global market leader in power semiconductors, it is listed in Germany with a market cap of 25bn euros. It’s main end markets are the 1. automotive sector 2. industrial sector 3. security sector.

Over the last 20 years the company has grown organically on average 9% per year which compares to the overall semi market which has grown at 6% Its main end markets are fast growing. Automotive and industrial are growing at 7% to 8% per year. Two-thirds of Infineon’s business is in the power segment where it has twice the market share of its next competitor. It also has an interesting business in sensors where it is a strong No.2.

One of the exciting things about the company is that its exposed to the electrification of the power train. There are two reasons why we are going to see more electric vehicles. Firstly, the OEMs are having to meet stricter targets. Secondly, the manufacturing cost of EVs is coming down dramatically. By 2020 or 2021 electric vehicles will become a serious consumer proposition in terms of total cost.

By 2020/21 expect EV’s to have more than 500KM of range and to have a rapid charge facility that could be as low as 10 mins. At that point everyone is going to want an electric car. There are supply concerns and materials concerns but nothing that can’t be overcome with a bit of time and investment.

As the power train is electrified more power semiconductors will be needed. EVs need four to five times more power semiconductors than cars with internal combustion engines. Fully autonomous cars and the stages toward them will require even more semiconductors.

Infineon can achieve more than double digit organic revenue growth for the next decade. It trades on 22x forward earnings. It has net cash on its balance sheet.


Be sure to check out the rest of the presentations from Sohn London 2017.

Ross Turner's Pelham Capital Buys Vesuvius Stake

Ross Turner’s hedge fund, Pelham Capital, has disclosed a new position in London listed Vesuvius (LON: VSVS). Turner, previously the youngest partner at London hedge fund Lansdowne Partners, established his long/short fund in 2007, raising $500m. 

Due to trading on December 19th, Pelham now holds 5.9% of VSVS’s voting rights.  Vesuvius and Alent , both FTSE 250 midcap companies, were formed by a de-merger of Cookson Group in December last year. 

Per FT.com – “Vesuvius PLC is engaged in metal flow engineering, developing, manufacturing and marketing ceramic consumable products and systems to the global steel and foundry industries and in industries that require refractory materials for high temperature, abrasion resistant and corrosion resistant applications such as the aluminium, cement, glass and solar industries. It has three business segments: the Steel and Foundry businesses, both of which are providers of engineered ceramics, and Precious Metals Processing business. Its products are specialised ceramics, including shrouds, stoppers, nozzles, slide gates, lining refractories and fluxes for the steel production industry and filters, feeding systems, coatings and binders for the foundry industry. On May 1, 2012, the Company disposed the United States business of the Precious Metals Processing business to Richline Group Inc. In November 2011, SERT was acquired by the Company. On March 29, 2012, it acquired Metallurgica.”