BVB - Strong Q3 Results On Financial Income And Trading Volumes

BVB - Earnings Comment

Recommendation:  Buy (unch.)

Target price (12M): RON 34.0 (unch.)

• BVB reported good results in the third quarter, up by 145% y-o-y and q-o-q. Better results stemmed mainly from significantly higher financial income. The remarkable growth in financial income was attributed to exchange rates impact of the EURRON (unrealized).
• Trading revenues were down by 0.7% q-o-q but up y-o-y by 21.0%. Despite q-o-q weaker revenues, margins actually improved by 1bps. Y-o-y development was mainly attributed to larger trading value of equities (+22.7% y-o-y).
• The Company’s net income now stands at RON 6.7 mln, in line with our annual forecast of RON 8.6 mln and if trends continue, net profit could exceed. Nevertheless, this is mainly due to the higher net financial results (above-mentioned) as traded values miss our forecast.
• Opinion: BVB posted good results on financial income and y-o-y higher traded revenues. Nevertheless the investment case still hinges on market upgrades, FTSE flow is coming next year with an estimated USD 100-200 mln boost to local equities. We have to adjust for this and for weaker average traded values from this year but all in all, MSCI Emerging will be the larger step. We maintain our Buy rating on the stock.

 

 

 

Hai Thanh Le Phuong, CFA
Head of Research

CONCORDE SECURITIES LTD.

Hillside
55-61 Alkotás street, H-1123 Budapest.
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MEMBER OF THE CONCORDE GROUP

 

 

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