Mo-BRUK: attractive play on a growing market (BUY - initiation of coverage)
We initiate coverage of Mo-BRUK (MBR) with a BUY recommendation and a 12M price target (PT) of PLN 409, offering 44% upside. As a leader in the processing of industrial waste in Poland, we believe MBR offers an attractive medium-term growth profile, and good resilience to macro-related risks. We see a 2022-25E EBITDA CAGR of 15%, driven mostly by the launch of coal sludge sales in 2023E and capacity expansion in the solidification and stabilisation segments in the medium term. Despite a substantial PLN 210m capex programme in 2023-24E, we expect MBR to remain a dividend play, offering reduced 5-6% dividend yields in the next two years, before returning to 12% in 2025E. MBR is trading at double-digit discounts to its global peers, which we do not see as justified, given its similar growth profile and more-attractive profitability outlook.Mo-Bruk SA is a Poland-based company involved in the production of concrete. It is also active in the area of hazardous and other than hazardous industrial waste management. Additionally, the Company operates a waste recovery plant, waste recycling plant, alternative fuel production plant and an industrial waste landfill. The Company produces alternative fuels from municipal and industrial wastes. The Company is also the owner of two open non-stop petrol stations for liquefied fuel, as well as a technical inspection station. Mo-Bruk SA is also engaged in the construction of concrete surfaces. As of December 31, 2011, the Company operated one wholly owned subsidiary, Raf-Ekologia Sp. z o.o.
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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