EUR 150.00 For Business Accounts Only

BSC Drukarnia Opakowań – 3Q19 results

Following the recent Company’s guidance regarding the production capacity expansion we add two printing machines starting 2022. Having done that, we fully utilize the newly finished production and storage facilities. We forecast the 2018-2022 revenue to grow by CAGR of 16%.

From the macro perspective, we believe that a cross-country comparison of paper packaging consumption per capita highlights the considerable gap between Poland and more developed EU economies. The differential of GDP growth rates should lead to narrowing of this gap. Increasing affluence and awareness of consumers should also drive the domestic consumption of cosmetics in the long term. Furthermore, Poland is becoming an increasingly important exporter of cosmetics and chocolate products – BSC is well positioned to benefit from those trends.

We believe that A&R Carton Holding will have to announce a tender till 66% of the votes and share capital. The only question is for how many shares the tender will be announced, because the shareholders of rlc have a binding shareholder agreement with Mr. Schwark and Mr. Czysz. Hence the question is whether the tender will be announced counting from 60.83% till 66% or from 36.7% till 66%. It cannot be precluded that A&R Carton Holding will strive to delist BSC Drukarnia allowing the financial investors to cash in the control premium.

We maintain our LT fundamental Buy rating and ST market relative Overweight bias and advise to purchase the stock prior to the capacity expansion, financial results improvement and possible tender announced by A&R carton Holding.