Zagreb Stock Exchange: Waiting for the triggers (stays HOLD)
We upgraded Zagreb Stock Exchange (ZSE) to HOLD earlier this year and, in this report, we reiterate our recommendation. However, we have reduced our 12-month price target (PT) by 6%, to HRK 14.1/share, from HRK 15.1/share (upside potential at c.14%). We also reiterate our investment thesis, arguing that an acquisition, preferably in the region, in line with the company’s strategy, could create upside for our estimates and the continued effort to diversify the company’s revenue lines should support not only their growth, but their stability as well. We consider the recent acquisition of another small stake in the Macedonian Stock Exchange (MSE) as supportive of our investment case, but too small to move the needle. On the other hand, we highlight the risks associated with ZSE’s stock, such as the very low liquidity of the shares, the ownership limit, as well as the low scale of its operations. Furthermore, the company trades currently at 15.9-23.1x 2021-22E EV/EBITDAs, on our numbers, premiums of c.23-60% vs. its peers. Its 2023E EV/EBITDA lands at 11.6x, on our numbers, a discount of c.9% vs. its peers. The market is pricing in the company’s growth potential, in our view, but we have decided to wait on the sidelines for now, as the triggers do not seem to be imminent currently.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.