Netia confirmed at HOLD, TP PLN 4.70 - Still in high capex mode
Investors who expected a tender offer by Cyfrowy Polsat for 100% and a delisting may be disappointed by the share price performance of Netia. More than one year has passed since the latest transaction by Cyfrowy Polsat to buy Netia shares and the recent acquisition of a stake in Asseco Poland by Cyfrowy Polsat limits chances of a quick tender offer for Netia, in our view. While there are cost synergies with the parent company visible on the cost side, the revenue outlook is not encouraging. Netia faces increased competition on its key B2C markets and the B2B segment is not enough to offset falling profits generated on retail clients. Nevertheless, a tender offer for 100% and a delisting and is still an option in the upcoming years. We confirm our HOLD recommendation and slightly trim our target price from PLN 4.8 to PLN4.7 owing to a lower than expected impact of the recent capex programme on new client acquisitions.Netia Holdings is a fixed-line telecommunication operator based in Poland. Co. provides voice telephony and data transmission services. These services include switched, fixed-line voice telephone services (long-distance and fixed-to-mobile services), Integrated Services Digital Network, Voice over Internet Protocol, voice mail, dial-up and fixed-access Internet, leased lines and frame relay and MPLS services. Co. also offers wholesale services (including wholesale termination of inbound traffic, ducts, dark fiber and co-location), services based upon intelligent networks (free phone, split charge and premium rate services) and provides broadband Internet access with ADSL technology.
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