Titan Cement: Hidden value (stays BUY)
We believe Titan Cement is at the start of a new growth cycle, driven by Greece and the US. Although the shares have rerated ytd in line with its European cement peers, we see further upside, in view of: 1) the hidden value from the US operations, which account for c.60% of the group’s operating profitability (local peers up 150% in the past 12M, trading at a c.15x EV/EBITDA); 2) a strong recovery in the Greek market, with the EBITDA exceeding EUR 50m in 2023E, from EUR 17m in 2020 (and still well below the mid-cycle levels); and 3) the steady growth and margins from the SEE operations. Any potential improvement in Egypt could present further upside optionality. We retain our BUY rating on the stock and increase our price target (PT) to EUR 22.0/share.Titan Cement Co. and, its subsidiaries (collectively, the Group) are engaged in the production, trade and distribution of a range of construction materials, including cement, concrete, aggregates, cement blocks, dry mortars and fly ash. The Group operates primarily in Greece, the Balkans, Egypt, Turkey and the U.S. The Group operates in 14 countries in Europe, North America and the Eastern Mediterranean and is organized in the following four operating (geographic) segments: Greece and Western Europe, North America, South East Europe, and Eastern Mediterranean.
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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