Emerging Europe Refining: Refining’s ship is coming in, IM(H)O (Hellenic Petroleum, Lotos, MOL, Motor Oil Hellas, NIS, OMV, OMV Petrom, PKN Orlen, Tupras)
In this report, we update our view on the refining sector, ahead of the IMO 2020 regulations that will be implemented at the beginning of next year, which will reduce the demand for high sulphur fuel oil (HSFO) and increase the consumption of diesel. The change is also likely to have a dramatic impact on the need for, and the price of, different grades of crude oil. This is all overlaid on a refining market where supply is growing more rapidly than demand, and yet may force restructuring in the sector, as low complexity refineries are made to close. Although not all refiners are created equal, we view the IMO regulations as broadly positive for all the companies in this report, albeit to varying degrees. Our preferred names are Tupras (BUY, 12M price target (PT) TRY 164.9, 43% upside), OMV (BUY, 12M PT EUR 57.5, 30.6% upside), Lotos (BUY, 12M PT PLN 100.1, 35.3% upside), MOL (BUY, 12M PT HUF 3,879, 24.6% upside), PKN Orlen (BUY, 12M PT PLN 106.0, 20.8% upside) and NIS (BUY, 12M PT RSD 940, 29% upside). We see limited upside at the remaining companies, OMV Petrom (HOLD, 12M PT RON 0.42, 8% upside), Hellenic Petroleum (HOLD, 12M PT EUR 8.79, 11% upside), and Motor Oil Hellas (HOLD, 12M PT EUR 22.8, 12% upside).Autohellas is a Hertz national franchisee. Co. is engaged in the rent-a-car segment, comprising of renting (short-term lease) and fleet management (long-term lease and fleet management) in Greece, Bulgaria, Cyprus, Romania, Serbia and Montenegro. Renting covers the needs of both individuals and companies for occasional, small duration rentals up to 1 year long.
Grupa Lotos is an oil concern which deals with oil extraction and processing and trading of high quality oil products. Co. supplies the market with, unleaded petrol, diesel oil, fuel oil, aviation fuel, industrial oil, asphalt and paraffin, among other things. Co. is engaged in the production and sales of engine oils and bitumen in Poland. Co. maintains oil exploration and production activities in the Baltic, North Sea and Norwegian Sea and operates three refineries in Gdansk, Jaslo and Czechowice, Poland. Co. markets its products in wholesale markets, as well as in retail markets through a network of petrol stations.
OMV is an international energy company with activities in Exploration and Production (E&P), Refining and Marketing including petrochemicals (R&M), and Gas and Power (G&P). Co. explores and develops oil and gas resources and supply energy to over 100 million people. OMV has three operating segments: Exploration and Production (E&P), Refining and Marketing, including petrochemicals (R&M), and Gas and Power (G&P), as well as the segment Corporate and Other (Co&O).
Polski Koncern Naftowy Orlen's activities are divided into three main business segments: the Refining Segment that comprises crude oil processing as well as wholesale and retail trade in refinery products. The Petrochemical Segment that encompasses production and sale of petrochemicals and chemicals. The Retail Segment that comprises of sales at petrol stations. Co.'s basic products include gasolines, diesel oils, light heating oil, Jet fuel, liquid gas, polyetylene, polypropylene, benzene, butadiene, acetone, phenol, glycols, toluen, ortoxylene.
Turkiye Petrol Rafinerileri is an energy and refining company based in Turkey. Co. is engaged in providing and refining crude oil, the importing and exporting of oil products, and establishing and operating refineries in Turkey and foreign countries. Also, Co. is establishing and operating factories and facilities in the petrochemical industry. Co. is engaged in purchasing, selling, importing, exporting, storing, marketing and distributing (wholesale, retail, foreign and domestic) all kinds of petroleum products, LPG and natural gas. Co. runs its business through the refineries in Izmit, Izmir, Kirikkale and Batman.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.