Report
Research Team

Focus:

HEADLINES:
• SOK: Leading the modern trade charge (BUY - initiation of coverage)
• Alior Bank: solid 4Q18 with core revenues and costs shining, clean-up of some legacy issues POSITIVE
• Jeronimo Martins: 4Q18 small miss, dividend payout of 50% only, smaller Biedronka stores coming NEGATIVE
• Eurocash: 4Q18 miss on provisions, decent lfl in cash & carry
• CCI: 4Q18 results - 23% miss on EBITDA due to gross margin contraction on all fronts NEUTRAL
• Erste Bank: solid guidance on 2019E earnings, but nothing surprising NEUTRAL
• Atrium: 4Q18 results - miss vs. our full-year forecast on higher overheads NEUTRAL
• NEPI Rockcastle: FY18 results - FFO 7% below our forecast NEUTRAL
• Kernel: solid 2Q19 results, well on track to meet the FY19E EBITDA guidance for farming segment POSITIVE
• PKP Cargo: CEO indicates favourable conditions for dividend payment POSITIVE
• Santander Bank Polska: key takeaways from the CFO's interview with PAP NEUTRAL
• O2 CR: cabinet approves draft amendment for switching mobile operators NEGATIVE
• EME strategy: FTSE index changes NEUTRAL
• Lukoil: 4Q18E results preview (due on 4 March)
• Short News (RTKM)
Underlyings
Alior Bank SA

Alior Bank is a universal lending and deposit-taking bank which renders services to individuals, legal persons and other entities which are Polish and foreign persons. Co.'s core activities include maintaining bank accounts, granting loans and advances, issuing banking securities and purchasing and selling foreign currency. Co. also conducts brokerage activities, consulting and financial agency services and renders other financial services.

Atrium European Real Estate Limited

Atrium European Real Estate is engaged in the ownership, management and operation of commercial real estate in the retail sector. Co. primarily operates in Poland, the Czech Republic, Slovakia, Russia, Hungary and Romania. Co. has two reportable segments: the standing investment segment includes all commercial real estate held to generate rental income for Co.; and the development segment includes all development activities and activities related to land plots. As of Dec 31 2016, the portfolio of standing investments consisted of 59 properties in Poland, the Czech Republic, Slovakia, Russia, Hungary, and Romania.

Coca-Cola Icecek A.S.

Coca-Cola Icecek is a bottler and distributor of alcohol-free beverages in Turkey, Pakistan, Central Asia and the Middle East. Co. focuses on the production, sales and distribution of sparkling and still beverages with The Coca-Cola Company (TCCC) trademarks. Co. has rights to produce, sell and distribute TCCC branded beverages including Coca-Cola, Coca-Cola Zero, Coca-Cola Light, Fanta, Sprite, Cappy, Sen Sun, Powerade and Fuse Tea in TCCC authorized packages throughout Turkey. Co. also has the right to produce, sell and distribute Burn and Gladiator branded energy drinks throughout Turkey, as well as bottling and distribution rights in Turkey for Schweppes branded beverages.

Erste Group Bank AG

Erste Group is a financial services provider based in Austria. As of Dec 31 2015, Co.'s total assets amounted to Euro199,743 million and the number of customers was approximately 16.5 million. Co.'s key business is the retail business, covering the entire spectrum from lending, deposit and investment products to current accounts and credit cards. In addition to providing financial services to private individuals, Co.'s core activities also include advisory services and support for corporate clients in financing, investment and access to international capital markets, public sector funding and interbank market operations.

Eurocash S.A.

Eurocash, through its subsidiaries, is engaged in the distribution of food products, household chemicals, alcohol, and tobacco products (fast moving consumer goods). Through a range of distribution formats, Co. and its subsidiaries focus its business activities on the wholesale distribution to customers across the wholesale market segments, in particular, to stores throughout Poland such as retail stores, convenience stores at petrol stations, restaurants, hotels and cafeterias. Co. and its subsidiaries operate a range of distribution formats focused on supplying independent stores in Poland, which primarily include: Cash and Carry, Franchise Systems, and Distribution.

Jeronimo Martins SGPS S.A.

Jeronimo Martins S.G.P.S. is a holding company. Through its subsidiaries, Co. is engaged as a food distribution company with operations in Poland and Portugal. Co. operates in four segments: Portugal Retail, which comprises the business unit of JMR - Gestao de Empresas de Retalho, SGPS, S.A. (Pingo Doce supermarkets); Portugal Cash & Carry, which includes the wholesale business unit Recheio; Poland Retail, which includes the business unit with the brand Biedronka; and Others, which includes marketing services and representations, restaurants in Portugal, health and beauty retail in Poland, and its retail business in Colombia.

Kernel Holding S.A.

Kernel Holding is a holding company. Co.'s is a diversified agribusiness engaged in the production and sale of bottled sunflower oil (sold under brand names Schedry Dar, Stozhar and Chumak Zolota), the production and subsequent export of bulk sunflower oil and meal, the wholesale trade of grain (mainly wheat, barley and corn), farming, and the provision of logistics and transshipment services n the ports of Ilyichevsk, Taman and Mykolaiv. The majority of Co.'s manufacturing facilities are primarily based in Ukraine and Russia. In addition, Co. is a private provider of inland silo services in Ukraine.

NEPI Rockcastle Plc

NEPI Rockcastle is engaged in developing, acquiring and holding commercial properties, either directly or indirectly through the acquisition of listed equities.

O2 Czech Republic a.s.

O2 Czech Republic is a provider of voice, data and other telecommunications services in the Czech Republic. Co. provides telephony services to business and residential customers, operates pay phones, provides cellular phone services, euroISDN, leased lines, Internet and data services (including internet online ISDN services which offer digital connection to the internet network), telephone equipment and other services. Co. comprises two main business segments: the Fixed segment which is telephone services using the fixed telephone network and the Mobile segment which is mobile telephone services provided by Telefonica O2 Slovakia.

Oil company LUKOIL PJSC Sponsored ADR

PKP Cargo

PKP Cargo SA is a Poland-based company active in the transportation sector. The Company's main activity is domestic and international transport of goods by rail and provision of logistic services in the field of railway cargo transport services. The Company divides its services into six divisions: Transport, offering rail transport carried out by PKP Cargo, road transport and ferry transport; Intermodal, providing intermodal rail transport; Forwarding, services carried out by Trade Trans, Cargosped and PKP Cargo International; Terminals, offering service of reloading terminals; Sidings, providing railway sidings; and Rolling Stock, which provides repairs of the rolling stock. It operates through Advanced World Transport BV (AWT).

Santander Bank Polska SA

Bank Zachodni is a bank seated in Poland. Co. and its subsidiaries provide a range of banking services for individual and business customers and operate in domestic and interbank foreign markets. Additionally, Co. provides also the following services, including intermediation in trading securities, leasing, factoring, asset/ fund management, insurance services, trading in stock and shares of commercial companies, and brokerage activity. Operational activity of Co. and its subsidiaries has been divided into five segments: Retail Banking, Business and Corporate Banking, Global Banking and Markets, ALM (Assets and Liabilities Management) and Centre, as well as Santander Consumer.

Sok Marketler Ticaret AS

Sok Marketler Ticaret AS. Sok Marketler Ticaret AS, located in Istanbul, Turkey, owns and operates grocery stores. It sells Amigo, Crown, Deren, Evin, Karmen, Lio, Peki, Piyale and Tempo brands. The Company was founded in 1995.

Provider
Wood and Company
Wood and Company

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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