reports
- Janusz Pięta
- Paweł Szpigiel
Grupa Pracuj - Made to Monetize HR Market Growth
Grupa Pracuj ("Grupa Pracuj" or the "Company") is a leading online HR platform in Poland and Ukraine with a well-established market position. The Company has a large base of loyal customers from Poland and Ukraine. Grupa Pracuj operates in a rapidly-growing recruitment market (with 2019-30E CAGR at 11% in Poland and 18% in Ukraine). Its online employment marketplace, pracuj.pl, is the job platform of first choice for many and a widely recognized brand that, over the years, has gained the trust o...
- Michał Konarski
- Mikołaj Lemańczyk
Banks - Scaling New Peaks
We maintain a bullish view on our entire CEE banking universe though this time the line-up shows more variety in terms of expected returns. In our view, the tightening cycle rippling across the region is far from over, and the hikes still to come will trigger more revisions to analysts’ forecasts around mid-2022. The tightening has yet to be fully reflected in bank valuations and earnings expectations, but the adjustments this time are not likely to be as rapid as the 2021 rally, when the marke...
EBS ERSTE GROUP BANK AG
RBI RAIFFEISEN BANK INTERNATIONAL AG
PKO PKO BANK POLSKI S.A.
KOMB KOMERCNI BANKA A.S.
BHW BANK HANDLOWY W WARSZAWIE S.A.
SPL SANTANDER BANK POLSKA SA
MIL BANK MILLENNIUM SA
BSK ING BANK SLASKI S.A.
OTP OTP BANK NYRT
BNP BNP PARIBAS BANK POLSKA
ALR ALIOR BANK SA
MONET MONETA MONEY BANK AS
- Kamil Kliszcz
- Piotr Poniatowski
STS Holding - Bet on the Champion
STS Holding (“STS” or the “Company”) is Poland’s #1 sports betting company with a market share of 46% (28% #2 player). As an omni-channel sportsbook operator, STS generates 82% of its revenue from online channel, with 68% provided by its mobile app. The STS sportsbook offers a complete range of wagering from classic prematch and live odds to more innovative features (i.a. e-sport, virtual sports, and bets on live dealer games) that represent a fast-growing share of total sales (12% in 2020 vs. 6...
- Paweł Szpigiel
Allegro - Investors Grow Too Bearish
Orange Polska (“Orange”) has undergone a successful transformation that enables it to grow earnings (with 9M’21 eEBITDAaL up 5.3% y/y) and generate relatively high free cash flow yield (2021E/2022E FCFE Yield = 9.0%/8.1%) while maintaining low debt (1.5x EBITDA ex. IFRS 16 as of 30 Sep. ‘21). The fact that high-speed broadband represents 66% of all connections supplied by Orange (of this, close to 42% are fiber connections), combined with consistent pricing adjustments, represent another source ...
- Paweł Szpigiel
Orange Polska - More Upside After Business Rebirth, Mast Sale
Orange Polska (“Orange”) has undergone a successful transformation that enables it to grow earnings (with 9M’21 eEBITDAaL up 5.3% y/y) and generate relatively high free cash flow yield (2021E/2022E FCFE Yield = 9.0%/8.1%) while maintaining low debt (1.5x EBITDA ex. IFRS 16 as of 30 Sep. ‘21). The fact that high-speed broadband represents 66% of all connections supplied by Orange (of this, close to 42% are fiber connections), combined with consistent pricing adjustments, represent another source ...
- Paweł Szpigiel
Cyfrowy Polsat - Tender Offer a Fair Exit Option But Not Much More
Cyfrowy Polsat, along with its owner, Zygmunt Solorz-Żak, announced they were seeking to repurchase up to 263.8 million of the Company’s shares by way of a tender offer at PLN 35.00 per share, set to run from 18 October to 16 November, 2021. Mr. Solorz-Żak on 27 September issued a message to shareholders where he expressed encouragement for Cyfrowy to meet head on “new challenges” that lie ahead, but, unfortunately, he did not elaborate on what these challenges might be. Therefore, working with...
- Antoni Kania
KGHM - Dark clouds gathering over metal prices...
With slower manufacturing growth, reflected in a contraction in the Caixin PMI to 49.6 in September, China's copper imports have been on a decline (-16% in June, -21% in July), and with a high year-ago comparable base for the next three months, considering China’s +50% share in global use, if the downturn persists this is going to hurt sentiment in copper markets. The more bearish outlook is underpinned by the latest prediction of a small copper surplus in 2022 made by Chile’s Cochilco. Contrar...
- Paweł Szpigiel
Allegro - Bracing for Market Share Loss
Allegro stock has registered a decline of nearly 6% since our last update in November 2020, which means it underperformed the broad market by a staggering 32%. Nevertheless we stand by our contrarian bearish view on the e-Commerce marketplace, which in our view is poised to lose its dominant position in the Polish market. There is no question that Allegro will benefit from the rise in e-Commerce in the coming years, but its sales growth is not likely to top industry averages because of its struc...
Pozbud - Diversification as the Way Forward
After a fundamental ownership change in 2020, Pozbud at the moment is taking steps to transform into a diversified holding company. As part of its transformation, Pozbud is venturing out into development and operation of renewable energy systems with a portfolio of 460MW of photovoltaic (PV) and wind farm projects expected to bring in up to PLN 140 million in additional sales from 2024. Pozbud is in talks to onboard an international partner for the RES projects that can bring in the right creden...
- Paweł Szpigiel
Sygnity - Attractive Valuation as Revenue Decline Stemmed
Sygnity stock fell more than 16% over the last five months on weaker-than-expected financial results; in the third quarter of FY2020/21 (“FY’21”), ended 30 June 2021, LTM revenue registered a 10% drop from the corresponding year-ago period, prompting downward revisions of 5-6% to our sales forecasts for FY21-FY23. However there is cause for hope ahead judging by a more upbeat revenue outlook outlined recently by Sygnity's Management Board based on successful contract acquisition which has brough...
- Michał Konarski
- Mikołaj Lemańczyk
Banks - Back to the Past
We continue to overweight the Polish banking sector and we see the current valuations as a springboard for further price rises. In our opinion, the prospects of Polish lenders have not been this good in a long time, and the only thing that can get in their way are unfavourable decisions regarding Swiss franc loans. We estimate the cap-weighted average growth potential of the sector at 16.2%, which could seem surprisingly high given that the WIG-Banks index has gained 78% in the last 12 months. ...
Cognor - Rebar Sector Keeps Up Momentum
Made-in-Poland reinforcing bars so far have been spared from the price downturn observed in recent weeks in the domestic steel market, and with rebar trading at PLN 4,200 a tonne while the cost to purchase a tonne of scrap feedstock hovers around PLN 1,800 this brings margins to a record PLN 2,200/t. After pushing maintenance downtime for its steel billet unit back to January 2022, Cognor is able to capitalize on the high prices of reinforcement steel to deliver another big quarter in Q3 2021 w...
- Paweł Szpigiel
Wirtualna Polska - Major Rebound in Tourism, Large Hikes in Advertisem...
Since the issue of our recommendation in December 2020, Wirtualna Polska’s share price increased by >58%, significantly outperforming the broad-based index (+35 p.p. vs WIG). Just like we assumed, during this time, the company took advantage of two distinct trends: (1) a significant rebound of the international tourism market, which had been hit hard by the Covid-19 restrictions, and (2) a strong demand for electronic media resulting from advertisers’ lower interest in traditional advertisement ...
- Paweł Szpigiel
Shoper - Made to Monetize e-Commerce Growth
Shoper S.A. ("Shoper," the "Company") is a leading Polish provider of SaaS e-commerce software for small and mid-sized digital retailers. Shoper offers an ecosystem of easy-to-use tools that can help to build and maintain an e-commerce Website. By investing in Shoper investors can gain exposure to the fastest-growing segment of the Polish e-commerce market, small and mid-sized retailers, who can tailor-fit their digital sales models with Shoper solutions by adopting omnichannel strategies and in...
- Paweł Szpigiel
Vercom - Earnings and Cash Flow on a Cloud Platform
Grupa Vercom is a leading Polish and Czech provider of cloud-based multi-channel communications powered by CPaaS (Communications Platform as a Service), including SMS, e-mail, as well as push notifications and selected OTT services. To investors, Vercom offers positive exposure to the fast-growing e-Commerce sector via key customers, including names like Allegro, Poland’s top online marketplace, InPost, owner of e-Commerce delivery parcel lockers, and DHL. Vercom is also building capabilities in...
Cognor - Rebar Margins Reach Record Highs
According to the Polish Union of Steel Distributors, in June prices of steel rebar in the domestic market have spiked to a record level of PLN 4,000/t. Thanks to a much slower rise in the costs of secondary steel inputs, in the last few days the margins for rebar producers have skyrocketed toPLN 2,000/t as compared with a 2020 average of PLN 900/t. This implies record profits for Cognor’s subsidiary rebar producer Ferrostal , indicating potential for record earnings in the full FY2021 (at a proj...
- Michał Konarski
- Mikołaj Lemańczyk
Kruk - Borrowers show resilience amid pandemic
We upgrade Kruk to accumulate and we raise our target price to PLN 295.77 per share despite the recent rally. Kruk beat analysts’ estimates with its quarterly results for the last two quarters thanks to the enduring capacity of borrowers to meet their payments, which has resulted in record-high recoveries and gains on fair value adjustments. Contrary to what we had predicted last September, the coronavirus crisis did not trigger a surge in bad debt; in fact, between March 2020 and March 2021, in...
- Paweł Szpigiel
Wirtualna Polska - Record Results Ahead
Shares in Wirtualna Polska have rallied more than 34% over the last six months, but we still see more upside ahead, driven by expectations of record 2021 profits. We believe Wirtualna will achieve EBITDA of PLN 283m for the year, an increase of an estimated 34% from 2020, fueled by two core trends: (1) rising expenses on digital advertising, and (2) a big improvement in the e-Commerce business, where EBITDA is likely to grow the most this year off of a very low year-ago base, when vacation booki...
- Piotr Poniatowski
Mo-Bruk - It’s All Good News In the Month of May
Mo-BRUK’s 2020 fourth-quarter results came 10% ahead of expectations across all key metrics, and with year-end net cash of PLN 14 per share there is reason to be optimistic about the next dividend payout. When it comes to the current situation in waste management, FY2021 prospects are upbeat with increased demand for treatment capacity allowing Mo-BRUK to raise its gate fees by 18% compared to the same period a year earlier in the first quarter. As a result, we see potential for the quarterly EB...
- Michał Konarski
- Mikołaj Lemańczyk
PKO BP - PKO Gets Ball Rolling On Swiss Franc Deals
PKO BP shareholders at an EGM today voted to create a dedicated fund to cover expected losses and costs of reaching voluntary settlements with holders of mortgage loans denominated in foreign currencies. This is tantamount to PKO’s Management Board getting a green light to offer deals to clients to convert their Swiss franc loans to zloty on terms proposed earlier by the Polish Financial Supervision Authority (KNF). The resulting losses, estimated at PLN 6.7bn, in the end will most likely be rec...
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