Komercijalna Banka: performing well, but remains expensive (stays SELL)
Komercijalna Banka continues to outperform the MBI Index, and is up 37.2% in the LTM, vs. 14.4% growth in the benchmark. This is attributable partially to the solid ROEs reported over the past couple of periods, backed by the bank’s very conservative balance sheet structure. Looking at our forward-looking multiple of 1.7x P/BVs for 2022-23E, the valuation seems relatively stretched. At such premia (108-115%), the stock screens as too expensive vs. the other banks under our coverage, in our view. On our new price target (PT) of MKD 9,119/share, which implies downside of c.24%, the P/BV multiples are 1.3x for the same period, which we consider more reasonable. We continue to rate the shares as a SELL, despite our positive views on the business: sound asset quality; high ROEs, despite the conservative structure of the balance sheet and liquidity; solid dividend payments; and the growth potential of the local banking sector and economy.
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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