WOOD Flash – Etalon: 2020 – strong results, pre-PPA EBITDA up nearly 50% yoy (21% margin)
Etalon has published a strong set of 2020 results, with strong pricing driving profitability improvement ahead of both our and the consensus expectations. Etalon reached a 33% pre-PPA gross profit margin, and a 21% pre-PPA EBITDA margin, up from 27% and 13%, respectively, in 2019. The company expects the environment to remain supportive for margins this year as well. The net debt to pre-PPA EBITDA declined to 1.2x, from 1.9x at the end of 2019, well below the internal target of 2-3x. Management plans to expand the land portfolio and potentially move into the regional cities at some point either this or next year. An EGM held on 22 March authorised a 30% capital increase (c.USD 150m) to finance land purchases. The EGM did not grant a waiver of the pre-emptive rights. We discuss the plan in more detail here. Trading at a 10% dividend yield, 3.4x EV/EBITDA, 0.72x P/B and 6.2x P/E on the pre-PPA 2020 figures, the stock is attractively valued, in our view, especially considering the further growth in earnings we forecast going forward. We reiterate our BUY rating. Our 12M price target (PT) implies c.90% upside.Etalon Group is a real estate development and construction company. Co.'s principal activity is residential development in Saint-Petersburg metropolitan area and Moscow metropolitan area, the Russian Federation. Co. has three reportable segments: Residential Development, which includes construction of residential real estate including flats, built-in premises and parking places; Constructions Services, which includes construction services for third parties and for internal purpose; and Other Operations, which include selling of construction materials, construction of stand-alone premises for commercial use and various services related to sale and servicing of premises.
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.