Dino raised to BUY, TP PLN 420 - Growth model proves its resilience
We raise our recommendation to BUY from HOLD for Poland's fastest growing proximity supermarket chain while lifting our 12m TP to PLN 420 from PLN 400Q3 22 impressed with a top line growth of 54% propelled by LFL sales growth of 33%
We reckon with only a modest EBITDA margin contraction by 25 bps in FY 22e and expect the EBITDA margin to return to a growth trajectory in FY 23-24e
Dynamic revenue expansion, increasing negotiation power vs. suppliers, operating efficiency improvement and deleveraging should underpin earnings expansion (RBIe EPS 22-24e CAGR of 35.1%).
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.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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