Waberer's - Not much room left to manoeuvre

 We cut our recommendation on Waberer’s to Neutral from BUY, but raise our TP to 2,170
HUF/sh from 1,910 HUF/sh, implying a 14% upside. Waberer’s is fairly priced, in our view,
which prompted us to step aside. The asymmetric risk/reward disappeared, but risks are
still looming. After new strategic investors appeared in Waberer’s, our stance is no longer
valid to value separately the two transportation business segments as we don’t see any
intention on the part of the Company to discontinue the ITS operation or sell one of its
business units. Insurance arm of the Group continues to look like a treasure.
 Waberer’s has to comply with strict covenants during the next years to meet requirements
posed by its lending banks. We see elevated risk as we are not convinced that Waberer’s
will have been able to deliver enough efficiency gain by mid-2022. Given that all the
valuable assets are mortgaged in accordance with the new agreement signed in March
2021 between the creditors, the Company and the majority owner i.e. Trevelin, the
likelihood of a capital increase is relatively high, in our view.