Fintel Energija: Small, but powerful (BUY - initiation of coverage)
We initiate coverage of Fintel Energija with a BUY recommendation and a 12M price target (PT) of RSD 824/share, implying 33% upside. Fintel, an onshore wind power producer, is the first company to build and operate a wind farm in Serbia. The company operates 86MW of capacity and plans to reach 1GW of wind capacity in the coming years. Currently, the company is awaiting a new support scheme for renewables, which is being prepared now. Thanks to a generous feed-in tariff (FiT), Fintel’s current portfolio generates solid profitability, which should be boosted this and next year, when its third (69MW Kosava 1) plant unlocks its full potential. While, on our P/E and EV/EBITDA multiples, Fintel seems fairly valued, our DCF implies 38% upside, based on the projects ahead. Moreover, through its 633MW Maestrale project, the company is aiming to become reliant on merchant pricing only in the future, independent of any support scheme. Fintel’s plans are bullish and there are certainly still many obstacles ahead, but we view Fintel as one of the best bets on the slow, but inevitable power transformation in the overlooked, western Balkans region.
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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