Enea – The strongest performance momentum in the industry
Enea represents, in theory, the best exposure to the widening coal-based generation margin in Poland. However, it has been one of the worst investments in the industry YTD. Enea’s EV/EBITDA’19-20 is now at a 20% discount to its close peers, which hardly finds a rational explanation, especially given the momentum of Enea’s results (which conforms that the profitability issue in 2018 was temporary), FCF outlook (FCFE yield >9% in the next three years) and relatively low-carbon generation fleet (0.8t/MWh). The strength of its balance sheet would put Enea back on track of dividend payouts, especially that the subsidiary LWB has recently decided to share its profits with shareholders. However, we maintain the Buy recommendation at a slightly lower target price of PLN 12.41 (due to conservative inclusion of perpetual usufruct in Net Debt under IFRS 16).
ENEA is engaged in production of electricity and heat; trade in electricity; and distribution of electricity.
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.
We provide all brokerage services available in the Polish capital market (i.e. Warsaw Stock Exchange, non-public markets and forex) in a way that meets the expectations of all groups of investors, both individual and institutional. Participating in the dynamic growth of the Polish capital market since its inception, we have acquired competences and experience needed to provide the highest quality of service and we have won the trust and satisfaction of our Clients.
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.
Clients get access to a comprehensive selection of research products including daily market insights, monthly roundups, macroeconomic views, industry- and company- specific analyses, investing strategies, earnings comments, etc.
We give our institutional clients numerous opportunities to connect with industry professionals, top executives, and leading analysts:
- Get direct access to senior management teams at listed companies (over 30 meetings in 2018),
- Engage in our many industry events, featuring listed Polish and global firms (in 2018, we hosted sector-themed conferences around industrials, chemical companies, telecoms, retail, and financials, and co-hosted a Best of Poland investors' with Commerzbank and the Warsaw Stock Exchange),
- Stay informed through an array of enlightening discussion panels, workshops, and briefing sessions with regulatory officials.
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