Polish Retail: Insight into the FMCG market
We think the Polish FMCG market is currently being driven by two main factors. First, we see the ongoing structural trend with increasing popularity of convenience/proximity formats over the traditional and supermarkets/hypermarkets. Second, supportive macro, growing salaries, low unemployment, 500+ program and inflation materially support FMCG LfL. In addition, there are other topics like the retail tax and the Sunday trade ban. We initiate on the key Polish FMCG players Dino and Eurocash. Despite a superior growth profile and efficiency, we rate Dino a SELL (FV PLN 70.0) as we see all the positives as already more than priced in, making Dino currently the world’s most expensive FMCG stock with an 18E EV/EBITDA of 17.7x. For Eurocash, structural FMCG trends are putting pressure on the underlying EUR wholesale segment while the newly adopted strategy of switching from wholesaler to retailer is an inevitably painful process which in our view is currently over-discounted by the market. Despite a weaker P&L, EUR cash generation remains decent and we see further M&A potential and likely P&L and B&S optimization. As a result, we rate Eurocash a BUY (FV PLN 31.6) on the current share price weakness and attractive 18E EV/EBITDA at 9.3x.Dino Polska is engaged in the business of retail sale in non-specialized stores with food, beverages and tobacco. In addition, Co. conducts processing of meats and the resulting products are dedicated, in the form of culinary meat, to external recipients within Co.'s retail chain. As of December 31, 2016, Co. operated a network of 628 Dino stores.
Eurocash, through its subsidiaries, is engaged in the distribution of food products, household chemicals, alcohol, and tobacco products (fast moving consumer goods). Through a range of distribution formats, Co. and its subsidiaries focus its business activities on the wholesale distribution to customers across the wholesale market segments, in particular, to stores throughout Poland such as retail stores, convenience stores at petrol stations, restaurants, hotels and cafeterias. Co. and its subsidiaries operate a range of distribution formats focused on supplying independent stores in Poland, which primarily include: Cash and Carry, Franchise Systems, and Distribution.
Haitong is the first international Chinese investment bank and our goal is to be the primary channel for capital flows into and out of China. During 2015 the Senior Management Team in London was expanded significantly to focus on this objective and to provide a full-service cross-asset markets business coupled with sector-focused investment banking. We work closely with our world-wide network of offices to bring a true depth of understanding to all client situations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.