Atal – Atal will benefit from better supply preparation
Very good 2019 offer preparation of the Company resulted in an increase in sales volumes by 18% within 4 months. As a result, the Management Board increased the sales target to 2.8 ths. (vs. 2.5 ths. Previously & 2.4 ths. in 2018). In our view, this is a realistic scenario taking into account the rebuilding of the offer (after its decline in 2018) on key markets and an expansion on growth markets (Katowice, PoznaÅ„). There is also space for Atal to increase market share in Tricity (2.4% in 2018). The Company should therefore benefit from better offer preparation – while the offer on the main markets at the end of 2018 was 5% higher y/y, Atal's offer increased by 77% at that time. We expect this to result in a 14% increase in volume of sales in 2019. Thus, the risk of a drop in results in 2021 seems to be limited. As a result, we are raising our forecast for 2021. We estimate closings @2.6 ths. in 2019 (-4% y/y) and its increase to 2.8 ths. in 2019 & near to 2.9 ths. in 2021, with a net profit of PLN 181m in 2019, PLN 172m in 2020 and PLN 192m in 2021. Stable profits, comfortable balance sheet conditions and limited acquisition needs of new lands should therefore support the level of dividend payouts in subsequent years. We are upgrading our rating to accumulate, setting a target price @PLN 43,16.
Atal SA is a Poland-based company engaged in the residential real estate development industry. The Company specializes in the construction and sale of apartments in multi-family buildings. It also builds single-family houses. The Company operates wholly owned subsidiaries such as ATAL Construction Sp z o o and Atal Wysoka Sp z o o , among others. Atal SA operates domestically.
Set up in 1986, mBank (originally BRE – Export Development Bank) is Poland’s 4th largest universal banking group in terms of total assets and 5th by net loans and deposits at the end of June 2019. mBank has one of the oldest brokerages in Poland – we have been providing brokerage services since 1991 - and the biggest, serving about 300 ths clients.
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Over the past decade, mBank's Equity Research Team has been consistently ranked among the top research teams in Parkiet's annual institutional investor surveys (Parkiet is Poland's leading daily business newspaper). mBank analysts provide coverage on an extensive list of companies, mainly in Poland but also elsewhere in the CEE region: Austria, Czechia, Portugal, Ukraine and Hungary.
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