Public Power Corporation: managing the margins (upgraded to BUY)
We have upgraded our rating on PPC from Hold to BUY, with an updated price target (PT) of EUR 10.20, or upside of 29%. We note that our forecasts do not include the acquisition of Enel’s Romanian assets as, pending the strategy update later this year, we still lack the details to credibly estimate the near-term earnings or a mid-term investment plan. Faced with last year’s volatile market, the company demonstrated that it can pass on higher power costs, while navigating the potential political pitfalls created by the energy crisis. As such, we are more confident in PPC reaching its mid-term EBITDA guidance, despite the demand destruction (still clearly visible in 1Q23) caused by higher prices. The investment case remains predicated on the rollout of c.5GW of new RES capacity, where we remain realistic about how quickly it can move, given the regulatory and EU funding approval process. Our assumption for capex and new capacity launches are backloaded, in contrast to the current official guidance, and we expect the programme to end in 2027E, one year later than guided.Public Power Corp. is a vertically intergrated electric utility engaged in electricity generation, transmission and distribution throughout Greece. At Dec 31 2014, Co. and its subsidiaries generated electricity in its own 62 power generating stations of Co. and from the additional stations which belong to its wholly owned subsidiary PPC Renewables S.A, facilitated the transmission of electricity through its own power lines of approximately 12,273 km and distributed electricity to consumers through its own distribution lines for Medium and Low voltage of 235,100 km which are managed by its wholly owned subsidiary Hellenic Distribution Network Operator (HEDNO S.A.) (Medium and Low voltage).
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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