Kety: Top dividend payer, with all-time high EBITDA (stays BUY)
We reiterate our BUY on Kety, and raise our 12M price target (PT) from PLN 794/share to PLN 803/share (28% upside potential). Kety delivered a stellar set of preliminary 2021 results (when the forecasts were raised three times and the expected EBITDA increased by 38% in total). We are also positive on 2022E, and assume Kety’s EBITDA to rise 6% yoy, to an all-time high of PLN 949m (17% above the consensus; 15% above Kety’s figure), which should result in an increase in the company’s forecast for 2022E. Moreover, given the low gearing (2021-22E end ND/EBITDA at 1.0-1.4x), we believe the shareholders may request a 100%dividend payout, implying a DPS of PLN 60 (a 9%+ yield). This would make Kety the only stock offering a near double-digit yield, among the Polish large- and mid-caps, and triple the average for the WIG index. Finally, Kety trades at our 2022E EV/EBITDA of 7.5x (a 14% discount to its long-term level).Grupa Kety is an aluminum industry company based in Poland. Co.'s operations are organized in three business segments: Aluminum Extrusions, Aluminum Architectural Systems and Flexible Packaging. Co. offers aluminum extrusions in different shapes, bars, tubes and wires of aluminum and its alloys, which are used in the construction & building, advertising, indoor fittings, transportation, automotive industry, white goods, machinery engineering and electrical engineering. Co.'s Aluminum Architectural Systems produces aluminum joinery, realizing investment projects and selling systems. Co.'s flexible packaging segment offers packaging made of aluminum foil, films and paper.
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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