EME Equity Market – February 2024 Market performance – a positive February, with the Polish WIG20 outperforming. The MSCI EM Europe Index added 4.2% mom in EUR terms and 3.7% mom in USD in February. The Polish WIG20 saw the strongest performance, adding 6.4% mom in EUR terms, followed by the Greek ASE (+4.2% mom), the Turkish ISE30 (+4.0% mom) and the Romanian BET (+2.6% mom) (all in EUR terms). There was a relatively muted performance in Hungary (+0.6% mom in EUR terms) and a decline in the Cze...
HEADLINES: • Graphisoft Park: 4Q23 – another year of growing earnings, FFO approaching EUR 15m in 2023 POSITIVE • NEPI Rockcastle: 2H23 – NOI grows by 13% yoy in 2023, on strong tenant sales POSITIVE • Bank of Cyprus: 4Q23 highlights and 2024E guidance POSITIVE • Coca-Cola Icecek: completes acquisition of Coca-Cola Bangladesh Beverages Ltd NEUTRAL • DIGI Communications: 4Q23E preview – 13% yoy EBITDA growth expected (due 28 February) • Sipchem: 4Q23E results preview (due on 28 February) NEUTRAL ...
Trading at 0.5-0.6x P/NAV, we continue to see Graphisoft Park as attractively valued in the context of listed European real estate – especially considering its unique portfolio of buildings, booked at around an 8% yield on the gross rental income. The proposed dividend translates into almost an 8% yield. With almost a 50% payout of the EPRA earnings, Graphisoft Park could either continue to deleverage, it could expand its portfolio via developments, or it could increase the payout, potentially p...
EME Equity Market – November 2023 Market performance – Greeks in the lead, in a month with only green across the region. The MSCI EM Europe Index added 5.6% mom in EUR terms and 8.7% mom in USD in November. The Greek ASE Index was the top performer in our region (+6.9% mom), followed by the Polish WIG20 (+5.5% mom) and the Hungarian BUX (+4.0% mom). The Czech PX Index saw the most muted performance, advancing 2.8% mom.
HEADLINES: • Aegean Airlines: en route to the best year on record, by far (stays HOLD) • Alro: deep net loss of RON 230m in 3Q23 NEGATIVE • Nuclearelectrica: 3Q23 reported net profit 4% lower yoy, fully in line with our estimate NEUTRAL • Banca Transilvania: solid 3Q23 results, but spoiled, once again, by the Volksbank saga • Graphisoft Park: 3Q23 - steady as she goes • OTE: key takeaways from the 3Q23 earnings call NEUTRAL • MedLife: targeting return to c.15% EBITDA margins NEUTRAL • ADNOC D...
The occupancy of Graphisoft Park’s offices has remained stable, so far, at a very high level of 97% throughout 9M23. The portfolio seems to be en route to generate FFO of around EUR 14m both this and likely also next year (even when factoring in some deterioration in the occupancy, going forward). This translates into an FFO yield of around 16-17% on the current share price (0.5x P/NAV). While the yield adjustment across European real estate may continue into 2024E, we maintain our view that Gra...
EME Equity Market – August 2023 Market performance – Turkey the top performer in August, once again. The MSCI EM Europe Index lost 0.7% mom in EUR terms and 2.2% mom in USD in August. Turkey, yet again, outperformed its peers, with the ISE30 gaining 9.4% mom in EUR terms. The Hungarian BUX index saw a solid performance in August, adding 6.1% mom in EUR terms, while the Romanian BET had a lacklustre month, barely making any gains (0.1% mom in EUR terms). Elsewhere, the index performances were neg...
HEADLINES: • OTP Bank: beats expectations with 2Q23 delivery, implies massive upside risk to FY23E expectations • CEZ: strong 2Q beat on trading, EBITDA and net guidance unchanged POSITIVE • Graphisoft Park: 2Q23 - occupancy stable, FFO yield at 17%, developments could push it up to 20+% POSITIVE • CTP: 2Q23 - recurring in line, FFO guidance reiterated, leasing backdrop supportive, LTV contained POSITIVE • Magyar Telekom: 2Q23 results review - adjusted EBITDA +19% yoy to HUF 83.4bn, 4% above ou...
Graphisoft Park has reported yet another set of good results. The annualised 2Q23 FFO translates into a 17% yield on the current share price. With its portfolio booked at around an 8% yield, the valuations offer a tangible buffer over the c.5.75-6.5% prime yield reported for Budapest offices by leading realtors. While we cannot rule out further yield expansion, the almost full occupancy of the Park seems a testament to tenants’ loyalty. This could mean that continued rental growth, driven by ind...
EME Equity Market – May 2023 Market performance – in its election month and with talks of a return to investment grade starting to materialise, Greece outperformed, posting a stellar performance. The MSCI EM Europe Index gained 2.3% mom in EUR terms, but lost 1.4% mom in USD in May. The Greek ASE Index saw the biggest gains (+12.3% mom in EUR terms), followed by the Hungarian BUX Index (+6.2% mom in EUR terms) and the Turkish ISE 30 Index (+3.4% mom in EUR terms). The remaining geographies finis...
Graphisoft Park has delivered a strong set of 1Q23 results, with earnings translating into an annualised FFO yield of 17%. The rents increased with indexation successfully, occupancy remained high (at 97%), and interest on loans remains fixed. With a 33% LTV, even a further 20% drop in valuations would not erase a substantial portion of equity. In such a case, the portfolio would be booked at a 10% yield (up from 8% currently), and the LTV would increase to 41%, while the current share price wou...
HEADLINES: • Turkey strategy: Turkish gambit - May 2023 elections • OTP Bank: books very strong start to 2023E, with 1Q23E implying 20%+ ROE POSITIVE • Graphisoft Park: 1Q23 - good quarter, FFO yield in high teens POSITIVE • Dogus Otomotiv: 1Q23 results - strong beat POSITIVE • Logo Yazilim: 1Q23 results - in line, except for one-off quake tax hit on NI NEUTRAL • SOK Marketler Ticaret: higher-than-expected bottom line in 1Q23 POSITIVE • Isbank: 1Q23 highlights - showing similar trends, but go...
EME Equity Market – February 2023 Market performance – Greece and Czechia continue with good momentum; Turkey resumes rally. The MSCI EM Europe Index gained 4.9% mom in EUR terms and 2.4% mom in USD in February. The Greek ASE and the Czech PX were, again, the best performers, adding 10.4% mom and 7.6% mom in EUR terms, respectively; while the rally resumed in Turkey, with the ISE 30 index gaining 7.3% mom in EUR terms. There was a somewhat muted performance in Hungary and Romania, with the BUX a...
HEADLINES: • Verbund: no reason for premium vs. peers (HOLD - initiation of coverage) • Graphisoft Park: 4Q22 - 0.5x P/NAV, 15% FFO yield, 6% dividend yield, stays BUY (PT changed to EUR 10.5) POSITIVE • NEPI Rockcastle: 2H22 - tenants' sales up mid-teens vs. 1H19, small revaluation gain on portfolio POSITIVE • Georgia Capital: takeaways from the 4Q earnings call NEUTRAL • Romgaz: statements from the CEO • HELLENIQ Energy: 4Q22E preview (due on 24 February) • Purcari Wineries: 4Q22E results -...
Trading at 0.5x P/NAV and a 15% FFO yield, and offering a 6% dividend yield, Graphisoft Park remains one of the most attractively valued names in the CEE real estate universe, in our view – albeit relevant for only a limited number of institutional investors, due to its small size and low liquidity. While we expect to see further market-wide upward pressure on yields, with an LTV of 36%, the risk for Graphisoft Park’s balance sheet is low. Going forward, Graphisoft Park may continue to de-risk v...
EME Equity Market – November 2022 Market performance – Turkey does it again, breezing past everyone else, once more, in November. The MSCI EM Europe Index advanced 11.6% mom in EUR terms and 16.7% mom in USD. The ISE30 index, again, boasted the best performance among our coverage, adding 18.6% mom in EUR terms and 23.9% mom in local currency (lcl) terms. Positive performances were also recorded in the WIG (+14.0% EU /13.0% lcl mom), the BUX (+12.6% EUR/12.0% lcl mom), the BET (+8.4% EUR/8.6% lcl...
HEADLINES: • Turkish Airlines: can it get any better? (stays HOLD) • InPost: 3Q22 beat; no new FY22E guidance, but slowdown in Poland becoming visible POSITIVE • Alpha Bank: strong numbers in 3Q22, reassuring outlook • Logo Yazilim: 3Q22 results - 6% EBITDA beat, accelerated growth POSITIVE • Turk Telekom: 3Q22 results - low-quality NI beat, driven by deferred tax NEGATIVE • BIM: 3Q22 results miss expectations NEGATIVE • Kruk: posts upbeat 3Q22, in line with earlier profit warning POSITIVE • ...
Graphisoft Park’s 3Q22 earnings did not bring any major surprises. We believe that we need to wait until next year to get more clarity on the extent of the yield shift, and on the prospective impact this may have on the values of the portfolio. At 0.5x P/NAV, Graphisoft Park is not screaming cheap in the context of the currently depressed valuations of the European listed real estate universe, but its earnings yield (FFO yield in the mid-teens) still stands out. Management’s guidance implies a s...
HEADLINES: • Graphisoft Park: take me to the river (stays BUY) • Jumbo: solid 1H22 numbers, in line, plus extraordinary DPS announcement • Halyk Savings Bank: to distribute USD 1.07 per GDR dividend POSITIVE • Georgia Capital: GHG secures USD 35m EBRD loan NEUTRAL • Alro: postcard from our Frontier Days conference POSITIVE • Electrica: postcard from our Frontier Days conference POSITIVE • Transelectrica: postcard from our Frontier Days conference POSITIVE • Allegro: 2Q22E preview - 11% yoy EBI...
Graphisoft Park (GSPARK) is facing the same set of challenges as its peers: yield expansion putting valuations under pressure; and the weaker macro making passing on inflation fully difficult, as contracts are rolled over, especially in light of the coming step-up increase in service charges. In a downturn, some tenants may cut back on office space, especially given the high costs and flexible working-from-home (WFH) arrangements (although many bosses see the Zoom “talking heads” as detrimental ...
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