WOOD Flash – Public Power Corporation: takeaways from the CMD
Taking PPC’s numbers from the CMD, held on 23 January 2024, the stock would be trading on average 2024-25E EV/EBITDAs of c.6.1x, while on P/Es it would trade on c.13.6x and c.9x. Compared to the median of our EU integrated peers, PPC would trade fully in line, as the comparable peer median is c.6.2x. On P/E we see a c.20% premium on our 2024E numbers but a c.30% discount in 2025E. On the other hand PPC should be operating with a negative FCF yield of 30-35% for the next two years (-16% in 2026E), while its peers generate a median positive FCF yield of 5% and dividend yields of 5-6%.From our perspective, PPC looks fully valued on its own projections. We note that the stock is up c.30% since it announced the closing of the Romanian deal (+14% vs. the ASE Index). While the Greek market has positive momentum, and PPC can always trade on a premium, the expectations priced in at these level seem high. Therefore, depending on risk appetite, we see other stocks with better visibility on earnings and better yields, in our view.
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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