KNYJY - KONE: Structural Compounder Down 32% From Peak After Inflation China Fears

• KONE stock has fallen 32% below its 52-week high to a level last seen in March 2020; the P/E is 26.2x and the Dividend Yield is 3.5%.
• Elevators are a structurally-growing sector backed by trends like urbanization. KONE's Maintenance base grew another 4.9% in 2021.
• Sales grew 5.8% and EPS grew 7.9% in 2021, but 2022 outlook implies a profit decline due to rising input costs and a slowdown in China.
• We expect the Chinese economy to be stable, with growth and margin to both recover after 2022, driving a high-single-digit EPS CAGR.
• With KONE stock at €50.10, even on reduced forecasts, we expect a total return of 61% (14.1% annualized) by 2025 year-end. Buy.

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