Mainly because of political reasons at WSE we have a group of companies which current market valuation does not completely reflect their fundamental potential. So who is currently being „underestimated” and may soon move towards the north of graphs? There are ten favourites.
There is high hope in...
Two of analysts named Inter Cars. – From operational point of view the company will have a year of intense work, in result of which the company shall move to the new warehouse. This in turn should improve its further dynamic growth. Moreover the company seems to be quite resistant to macroeconomic environment. Demand for spare parts is still growing, and additionally Inter Cars develops its product range with new categories of products, combining it with geographical expansion. All these factors form an encouraging image - said Sylwia Jaśkiewicz, analyst of BOŚ BH.
Also Jerzy Nikorowski pointed out the assets of the company, investment adviser of BM BGŻ BNP Paribas: - The beginning of the year brought depreciation of Polish zloty in comparison to currencies of the region of Central and Eastern Europe (HUF, RON, CZK), what influenced higher margins.
Among other companies named by Jerzy Nikorowski was Synthos. – In our opinion the prices of crude oil (much correlated with prices of butadiene) are currently on their historical lows. We are forecasting price recovery what can influence butadiene price increase in following months of the year. Basic advantage of the company is its defensive character and expected high dividend yield for 2015 - he argued.
The last „underestimated company”, which the advisor of BM GBŻ BNP Paribas named is GTC. – After the IPO in September, financial situation of the company improved a lot. Additional positive factor is growing activity of M&A in the area of commercial real estate, which supports listing of companies from this industry sector – he said.
Building profits
Another expert, Sebastian Trojanowski from TMS Brokers, advices to pay attention to construction sector, particularly Erbud Company. – Lately the company did not resist price decrease, and expected results are on a low level regarding 2016 (revenue – 6 percent yoy, net profit -8 percent.), mainly because of shrinking backlog. However it is worth to notice the fact that the company is priced quite low (PPS for 2016 – approx. 10.7) and has a strong balance (low debt rate, ND/EBITDA 0.8) – says the specialist for investment strategy in TMS Brokres.
Whilst Krzysztof Pado, analyst of BDM BH, named as an „underestimated company” from sub-index WIG-construction industry, Instal Kraków. – Balance sheet net value of the assets of the company goes high above its capitalization. Additionally the results for Q3 2015 turned out to be much better than estimated - he said.
And added: - We assume, that Q4 2015 will bring results around zero, but in 2016 the results shall be based on profitable areas of business: property developer segment (settlement of accounts of Sołtysowska investment), Frapol (air-conditioning systems) and subcontracting operations on German market. In view of current orders portfolio, we assume that low-margin construction activity on Polish market shall be substantially limited. We expect the consolidated net profit of the company to come back to the level of around PLN 10m.
Important takeovers
Madicalgoritmics also appeared on the list. – The market did not fully discount the acquisition of the partner in USA. We are awaiting more details regarding cooperation solutions with the second partner. After potential merger, which can be expected in the second part of the year, the profit of the company should go up substantially. We need to remember that EBITDA of acquired company is much higher than EBITDA of Mdicalgorithmics. I suppose that at the beginning of the following year the company will have a totally different form - regarding its operations as well as results. We should also observe development of company’s portfolio and its progress in offering cardiological physiotherapy – says Sylwia Jaśkiewicz.
- Another, so called pick is Zetkama, where one can expect substantial growth of results because of takeovers in previous year (Masterform and Kuźnia Polska), which allowed the company to strengthen its position in fast growing automotive market, and gives the potential for positive surprises because of company consolidation and possible synergy – said Sebastian Trojanowski.
Expert of TMS Brokers added: - Moreover, substantial part of sales goes to foreign markets, what is not meaningless in case of economic growth in EURO zone. The company does not plan any further takeovers in 2016, and this can result in dividend payment for 2015, which has not been done since 2012.
Strong trio
Whilst Konrad Księzpolski, stock market analysis department director of Haitong Bank, focussed on large and popular companies, i.e. Cyfrowy Polsat, CCC and Comarch.
In case of Cyfrowy Polsat, Konrad Księżopolski emphasises the fact that current share price is under the general negative trend on WSE - long not explained situation of LTE auctions, and particularly the question if Net-Net shall finally buy the frequency. But the purchase of expensive frequency will not be realized, so the company will be strengthened.
- Currently the second factor influencing the price is the question of probable merger with Midas and its form, will that be a call or a share-swap. We assume that the company that will be taking over will approach the question in a professional way and it shall be based on valuation of market assets. Such a merger shall bring advantages in the form of simplified flows and capital structure – he added.
CCC and Comarch
In case of CCC there are many risks, including the weather which influences the results of the company. Additionally, according to Konrad Księżopolski, weak PLN will cause pressure on margins and cost of lease. – But positive perspectives caused by development on foreign markets make the discount scale already including those risk factors. I also think that the price estimation of the company still includes the purchase of eObuwie.pl Company, which develops the product portfolio and opens a very important e-commerce sales channel - he argues.
- In the next 12 months Comarch can also surprise, and this should be mostly connected with first tenders from EU, which are currently not there, causing no growth in sales results, which last year recorded its historical high – said the director of Haigtong Bank stock market analysis department.
- The results are also under pressure of remuneration costs, which at current level of revenue are not allocated too effectively. But with the increase of backlog, this effect should be less and less visible. Besides „public” segment, Comarch is developing interesting areas, i.e. Further foreign expansion in loyalty systems, which have a very big potential - he added.
Source: Parkiet
2016-02-08