AUGA Group: invest to pay for your food, and much more (stays BUY)
We keep our BUY rating on AUGA, with a new 12M price target (PT) of EUR 0.66/share (from EUR 0.61), implying 36% upside. The hike in our PT reflects AUGA’s improving prospects this year, driven by higher soft commodity prices, but also the current good conditions for crops and the improving dairy results. AUGA is facing strong inflation pressure, especially in its mushroom segment; however, with the situation in Ukraine and globally, we believe it is a good proxy for food inflation overall, with its crops segment being well-positioned for the global supply shortages and also given its zero exposure to industrial-made fertilisers. Thanks to the strong performance that we expect both this and next year, coupled with its attractive ESG profile and the exciting developments in the company’s R&D arm, focused on green and sustainable projects, with their value yet to be unlocked, in our view, we are big fans of the company. AUGA is trading currently at our 2022-24E EV/EBITDAs of 6.7-10.7x, well below its historical averages.Auga Group AB. Auga Group AB, formerly Agrowill Group AB, is a Lithuania-based company engaged in the agriculture sector. The Company's activities are structured mainly into three divisions, namely Mushroom-growing, Plant production and Livestock production. The Company offers white, brown, portabella, eryngii, pleurotus and shiitake mushrooms. It specializes in organic wheat and other crops, including organic vegetables and organic feed for livestock in its farms. The Company supplies potatoes, beetroots, onions, carrots, marinated champignons, marinated beetroots, among others. The Company operates own trademark AUGA. In addition, the Company is involved in own farms management. The Company has numerous subsidiaries, including UAB Arginta Engineering, UAB AVG Investment and UAB Agro GIS, among others. It operates domestically on the Lithuania territory.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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