Zagreb Stock Exchange: remains BUY, following the share price dip (stays BUY)
In this report, we have updated our estimates for Zagreb Stock Exchange (ZSE) to reflect the numbers reported for 2Q22, while maintaining our BUY recommendation on the company’s shares. Our new price target (PT) now lands at HRK 22.6/share, offering upside of c.33.1% (down from HRK 27.9/share; we note that our previous PT of HRK 14.0/share had to be adjusted for the capital reduction and the effective 2:1 reverse split of the company’s shares, on 5 July 2022), following the recent share price dip. This exercise helped the company to offset its accumulated losses and will result in the ability to pay dividends in the near future, in our view. While our dividend yield estimate is below that of its peers, it is clearly a supportive move by the company. We also continue to argue that, due to the small scale of the ZSE’s operations, even a small increase in the company’s top line would be likely to result in quite a large improvement of its margins.
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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