Hidroelectrica: green yields (BUY - initiation of coverage)
Hidroelectrica is the largest power producer in Romania and one of the largest hydro producers in Europe, with 6.4 GW of installed hydro capacity, generating net annual production of 15.6 TWh, based on the long-term average observed by the company. In addition to hydro capacities, the company owns a 108 MW onshore wind plant, generating an additional 0.3 TWh, on average, per year. Thanks to its green portfolio, Hidroelectrica has a close to zero CO2 footprint and is not planning any thermal energy projects in the future. It is the sixth-largest producer of power from hydro sources in Europe, if we consider the average production over 2018-22, and the only listed European utility with a portfolio consisting solely of renewable production assets, mainly hydro. We value Hidroelectrica using a mix of DCF, DDM and peer valuations. We initiate coverage with a BUY rating and a 12M price target (PT) of RON 144.9, implying 30% upside to the current price.
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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