Halma: Short-Term Prospects Boosted by Large Photonics Project; Raising Our Valuation by 7%

Halma’s industry-leading profitability is underpinned by acquiring small to medium-size businesses in niche markets with relatively small total addressable markets. Consequently, Halma enjoys a leading market share in many of the group’s product categories and may only have a handful of competitors in other areas. The group’s strong emphasis on research and development, which accounts for 5% of sales, will allow Halma to maintain its market position through a combination of new product releases and product differentiation.