Dino confirmed at HOLD, TP PLN 400 - Operating profitability seems capped for the moment
We confirm our HOLD recommendation for Poland's fastest growing proximity supermarket chain while increasing our 12m TP to PLN 400 from PLN 330Q2 22 impressed with a top line growth of ca. 50% propelled by LFL sales growth of 29.8% but the EBITDA margin contracted by a noticeable 31 bps yoy
Dino follows the pricing of discounters on a core basket of products, limiting manoeuvring space with regard to the gross margin and putting more emphasis on the ability to deliver opex savings which should be challenging amid an inflationary environment
The company still targets a flat FY 22 EBITDA margin of 9.5% while our estimates point to a modest contraction to 9.4%
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.
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
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