Duna House - DPS 130 Implying Another M&A On The Horizon

Duna House -  Instant Earnings Comment

Recommendation:  Accumulate

Target price (12M): Under revision

 

In short:

• Duna House Group met its FY profit guidance for 2019, clean profit (excluding developments) arrived to HUF 1.16 billion (EPS 326) to the lower end of the range – broadly in line with our FY assumptions for core operation. Reported figure came lower to HUF 1.02 billion because of one-offs at the development arm of the group.
• Management will propose HUF 130 per share (DY:3.4%) dividend for the AGM, which implies that there should be a larger transaction in the pipeline as mgmt communicated that larger dividend is subjected to corporate transactions.
• Management expects ca HUF 3.9 billion (1,070 per share) inflow from developments vs our conservative projection of HUF 3.3 billion (780 per share) + 37% - expected to realise in large part of it in
• Last but not least, management gave flattish guidance for core operation (HUF 1,250 million) and the total of HUF 2,550 million with developments. However the breakdown of the profit from core operation implies sluggish Hungarian (80%) and very strong Polish operation (20%).
• Cleaned Hungarian operation (excluding developments) reached an EPS of HUF 315, while Polish operation EPS could be around HUF 10 (should jump to EPS 70 in 2020).