Update - Dazzling plans with high execution risk
The aim of this equity note is to present a bull case scenario if the Management’s guidance materializes in the future. Taking into consideration the recently announced investment projects and portfolio diversification, we put our target price under revision, but keep our recommendation unchanged on Accumulate.
However, our calculation suggests that Masterplast is worth at least HUF 2,695 a share in a bull case scenario by using a very conservative 25% DLOM. This implies a 25% upside potential (incl. dividend) over the next 12 months. However, in case of applying a lower DLOM, which might be justified given the current 3M ADTV of the stock, our valuation points to a higher 12M TP and greater upside potential.
Masterplast Nyrt is a Hungary-based company active in construction sector. The company is a producer and distributor of construction industry products. Its product portfolio includes facade insulation systems and components, roofing underlay and roofing accessories, bituminous corrugated sheets and shingles, thermal-sound and water insulation materials, dry construction elements, as well as plaster profiles and accessories, polypropylene foils and bags and foam tapes. It has two production plants, based in Kal, Hungary and Subotica, Serbia.The Company sells its products domesticaly and exports it to Estonia, France, Greece, the Netherlands, Italy, Latvia, Lithuania, the Russian Federation, Sloveania and Turkey.
Concorde Securities Ltd. is Hungary’s leading independent company engaged in investment banking activities. It provides its clients with integrated financial services, including securities trading, research, corporate financing advisory, capital market transactions, wealth management and investment advisory. The operational management of the company is the responsibility of the CEO, while the owners/managers (who control one-third of the company through their shares and options) are in charge of its strategic governance. Concorde Securities Ltd. is a member of the Budapest, Frankfurt, Warsaw and Bucharest stock exchanges, as well as of the Hungarian Association of Investment Service Providers.
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