Morning Comments. Equity Market. Company & Sector Information. Bank Securities

Transcription

1 30 January 2013 Equity Market Poland Morning Comments Morning Comments BRE Bank Securities Institutional Sales and Research: M. Marczak ( ) I. Rokicka ( ) K. Kliszcz ( ) M. Stokłosa ( ) J. Szkopek ( ) P. Zybała ( ) Index Close Change Index Close Change Index Close Change DJIA % FTSE % Copper (LME) % S&P % WIG % Crude Oil (Brent) % NASDAQ % BUX % USD/PLN % DAX % PX % EUR/PLN % CAC % PLBonds % EUR/USD % Company & Sector Information Getin Noble Bank Accumulate 10/12/12 Target price: PLN 1.90 Financial Supervision authority agrees for the acquisition of DnB Nord Financial Supervision Authority (KNF) agreed on a session held on 29 January 2013 for an acquisition of banking operations of DnB Nord bank by Getin Noble Bank. Getin Noble Bank informed it had signed a preliminary conditional agreement for the purchase of the banking operations of DnB Nord bank. including 39 branches with their banking operations and their 260 employees, loans issued to housing cooperatives (PLN 700m), SMEs (ca. PLN 200m), retail customers (non-mortgage loans totaling PLN 13m), as well as deposits (which may have a higher value than loans) and bank accounts (ca. 35,000).. As of the end of May 2012 the collective value of the liabilities form gross loans reached PLN m (less than 10% of all DnB Nord loans at the end of 2011). Assuming Getin will accept 100% of the above mentioned assets and liabilities (less relevant premiums and discounts) the purchase price should equal ca. PLN 5 m. (I. Rokicka) KNF approves the CEO of Getin Noble Bank On a session held on 29 January 2013 KNF agreed to appoint Krzysztof Rosiński for the position of the CEO of Getin Noble Bank. (I. Rokicka) ING BSK Hold 10/12/12 Target price: PLN 93.0 Pekao Hold 10/12/12 Target price: PLN Construction Fitch affirms ING BSK ratings Fitch has reaffirmed ING BSK s long-term Issuer Default Rating (IDR) at A with a stable outlook, short-term IDR at 1, viability rating at BBB+, and support rating at 1. The rating actions reflect Fitch s belief that there is good probability that ING BSK will receive support from its main shareholder, the Dutch ING Bank NV, if necessary. (I. Rokicka) UniCredit sells 9.1% stake in Pekao According to Bloomberg, Unicredit has put up for sale 23.9 million shares in Pekao, representing a 9.1% equity interest. The sale is to be effected through an accelerated book-building process. It will reduce UniCredit s holdings in Pekao to 50.1%. UniCredit has undertaken not to sell Pekao shares for a period of one year after the transaction. The Italian bank intends to use the proceeds from the sale toward organic growth in the CEE region. It has reassured investors that it continues to consider Pekao a strategic investment. The sale and its timing comes as a surprise to us and the market (on January 23rd, the Polish State Treasury and its agent, Bank BGK, sold 12.25% of their shares in PKO BP for PLN 5.2bn). At yesterday s closing prices, the UniCredit transaction is worth PLN 4bn. We are concerned that it may give rise to uncertainty about UniCredit s financial health Pekao is the Italian bank s largest and most profitable CEE investment. Consequently, in the end, the discount to yesterday s closing price may prove higher than it was in the case of PKO BP, especially considering that an equity supply had not been priced in Pekao s share price until yesterday, and that Pekao is trading at 2013E of 17.0, showing an 18% premium relative to PKO BP. (I. Rokicka) EU stops funding for three Polish roads The European Commission has cut PLN 3.5bn funding for three road infrastructure projects pending an investigation into possible price fixing practices by the contractors. If these accusations are confirmed, Poland will be forced to withdraw the funding applications concerning the affected projects. In the long term, EU probes into unfair market practices can prompt favorable changes in the Polish procurement laws. (M. Stokłosa) BRE 30 January Bank Securities 2013 does not rule out offering brokerage services to an issuer of securities being the subject of a recommendation. Information concerning a conflict of interest arising in connection with issuing a recommendation (should such a conflict exist) is located on the final page of this report.

2 Major power plant contract to be awarded in Q1 Polenergia Holdings, the energy arm of Kulczyk Investments, is negotiating the terms of a potential contract for construction of two power-generating plants with a combined capacity of ca MW with four bidders: Alstom, Siemens, Shanghai Electric Group, and Polimex. Alstom and Shanghai Electric are willing to co-finance the project. Polenergia is expected to announce the winner by the end of March Selection of the general contractor will open up a range of opportunities for power engineering contractors. (M. Stokłosa) P.A. Nova Buy 11/09/12 Target price: PLN PA Nova sells property P.A. Nova sold a retail establishment and infrastructure developed by it to the Kaufland retail chain for a net price of PLN 23.0m. The sale is factored into our financial forecasts for P.A. Nova. We had thought the profits (ca. PLN 2m) would be recognized in Q4 2012, but they will probably be postponed to Q (P. Zybała) More News Azoty Tarnów The Treasury is concluding negotiations on the sale of Siarkopol and Azoty Tarnów. The State Treasury is planning that the preliminary agreement on selling the shares of KiZCHS Siarkopol and Azoty Tarnów will be signed in Q and finalized in Q2 the deputy minister. Developers The construction of Warsaw Spire complex with 100 thousand square meters leasable office space will cost 1 billion zlotych. Ghelamco Poland is the developer and general contractor. In 2013 the average price of flat will drop by 1.5% y/y Home Broker, Lion s House. Getin Noble Bank Ipopema KGHM PCC Exol Sygnity Telecommunication Ukraine, Russia, Gas & Oil Getin Noble Bank is planning to announce its new strategy for within 2 months Krzysztof Rosinski, the CEO. It will focus on improving customer service and gaining regular clients. The strategy will go under the name of Getin Up. The Bank does not rule out further acquisitions. Ipopema will buy German company - Impress, the transaction will finalize in Q1. Ipopema 76 FIZAN fund has signed an agreement with Constantia Industries to purchase German group Impress a producer of decorating surface for furniture and floors. The transaction will finalize in Q1. The value of transaction was not quoted. Impress owns eight plants located in several countries where it employs almost 800 workers. The annual revenues amount to EUR 255m with the major part generated on emerging markets. Rzeczpospolita daily newspaper reports that Chilean Sierra Gorda deposit owned by KGHM has a potential to launch one more mine in future. The current project has ca. USD 3bn CAPEX, but it may be revised upward.. The budget will be adjusted in February. PCC Exol bought PCC Chemax operating on the US market from its parent company. It paid PLN 39.4m for 100% of shares. The acquisition will expand product portfolio of the Company and allow it to enter the US market. Based on preliminary data PCC Chemax generated USD 26.1m sales revenue, USD 2.1m EBITDA and USD 1.1m net profit. MINISTRY OF FINANCE: Sygnity will sign an agreement on e-taxes this Thursday. As of the end of December 2012 the number of subscribers and users of mobile telecommunication network (prepaid service) amounted to 54.3m marking 7% increase relative to the end of December GUS informed that in 2012 the number of subscribers and users expanded by over 3m, similarly to Ukraine is negotiating 15bn aid from IMF. Ukrainian authorities hope to resume cooperation with IMF suspended in 2010 when Kiev did not deliver on the promises paid to the fund. The loan would support Ukrainian budget that was seriously undermined by high prices of Russian gas. Insider Trading and Fund Activity Orbis Aviva OFE decreased equity interests to 9.94% from 10.00%. Pelion The Company bought 8683 treasury shares at PLN per share on 29 January. Pozbud PKO BP Bankowy OFE reduced voting interests to 4,8641% from 5,1117%. 30 January

3 Macroeconomics GDP rises by 2% in FY 2012, consumption falls sharply. In FY 2012 Poland s GDP rose by 2.0% y/y after rising 4.3% in Private consumption grew by just 0.5% compared to 2.5% growth in Investments increased by 0.6% y/y. FY data allow to estimate approximate growth figures in Q We are estimating that the GDP growth could get close to 0.9% y/y, so the quarterly growth will be close to 0%. Q4 GDP growth has a surprising structure. Consumption fell by more than 1% y/y after it had shown a meager 0.1% growth in Q3. This is the first decline in the history of the research. Therefore, a conviction that consumption is unable to fall is pure fiction the decline reflects the uselessness of forecasts based on historical comparisons in this period of the slowdown (which may even be considered a recession, in our view). Only a slight 1% y/y decline of investments was a source of positive surprise, Q3 saw a plunge of investments by 1.5%. Note that the data on investments are in a stark contrast to the steep plunge of investment loans trajectory and the data on the production of durable goods (investment goods) and construction. On the supply side, declining added value in trade (by above 2% y/y, a historical record) should be particularly stressed. We are not modifying our forecast for GDP fall in H after the publication of today s data. They imply a deteriorating consumer situation who will be hit by downsizing and falling wages. Therefore it is rather unreasonable to expect a sudden acceleration of consumption. Q1 will also see an inflated base on investment and construction from 2012, which will lead to private investments falling by ca. 5% y/y. In Q1 positive contribution of net exports will also fall and there will be a negative base on inventories. Summing up, it will be a challenge to achieve a positive GDP growth, even if calculated purely arithmetically. These data, and especially declining consumer demand (historically record fall) imply further plunge of demand and a perspective of a much lower inflation (including core inflation). In our view this is also a clear signal to continue monetary easing (Poland s Central Bank core rate will fall to 3.25%). Following the publication of the data, Polish zloty appreciated slightly and rates grew at the short end of the profitability curve. The market paid more attention to FY data than to particular publications. BRE Bank S.A. (Ernest Pytlarczyk, Marcin Mazurek) research@brebank.com.pl 30 January

4 Corporate Action Calendar Thursday / / Grupa Lotos Friday / / Millennium Economic Calendar Preliminary Q and FY2012 operating and financial results. Preliminary FY2013 earnings announcement Wednesday / / Time Region Report Period Forecast Previous 00:15 Japan PMI Manufacturing January :50 Japan Retail Trade December 1.30% y/y 10:30 UK M4 Money Supply M/M December 0.20% m/m; -1.30% y/y -0.20% m/m; -2.80% y/y 10:30 UK Mortgage Approvals December 55,000 54,040 11:00 EU Business Climate Indicator January :00 EU Consumer Confidence Index January :00 EU Economic Confidence Index January :00 EU Industrial Confidence Index January :00 EU Services Confidence Index January :00 USA Mortgage Applications 18 January 7.00% 14:15 USA ADP Employment Change January 135, ,000 14:30 USA GDP Deflator Q4 2.70% q/q 14:30 USA GDP Q4 1.08% q/q 3.10% q/q; 2.60% y/y 14:30 USA PCE Q4 1.60% q/q; 1.90% y/y 14:30 USA Core PCE Q4 1.60% y/y 16:30 USA Crude Oil Inventory 25 January m 20:15 USA Interest Rate 0.25% 0.00% Thursday / / Time Region Report Period Forecast Previous 00:50 Japan Foreigners Buying Japan Bonds 26 January bn 00:50 Japan Foreigners Buying Japan Stocks 26 January bn 00:50 Japan Industrial Production M/M (P) December 4.10% m/m; -5.80% y/y -1.40% m/m; -5.50% y/y 00:50 Japan Japan Buying Foreign Bonds 26 January bn 00:50 Japan Japan Buying Foreign Stocks 26 January bn 08:00 Germany Retail Sales December 0.50% m/m; -1.50% y/y 1.20% m/m; -0.90% y/y 08:00 Germany Unemployment Rate December 5.40% 08:45 France Consumer Spending December 0.05% m/m; 0.10% y/y 0.20% m/m; -0.20% y/y 08:45 France PPI December -0.50% m/m; 1.90% y/y 09:55 Germany Unemployment rate January 6.90% 14:00 Germany CPI Harmonized (P) January 2.00% y/y 0.90% m/m; 2.00% y/y 14:00 Germany CPI (P) January -0.40% m/m; 2.20% y/y 0.90% m/m; 2.10% y/y 14:30 USA Continuing Claims 19 January 3,157,000 14:30 USA Initial Jobless Claims 26 January 345, ,000 14:30 USA Core PCE Deflator December 0.05% m/m; 1.40% y/y 0.00% m/m; 1.50% y/y 14:30 USA PCE Deflator December 0.00% m/m; 1.40% y/y -0.20% m/m; 1.40% y/y 14:30 USA Personal Income December 0.64% m/m 0.60% m/m 14:30 USA Personal Spending December 0.30% m/m 0.40% m/m 15:45 USA Chicago PMI January :30 USA Natural Gas Inventory 25 January 2996bn Japan Construction Orders November % y/y Japan Housing Starts November 25.2% y/y Friday / / Time Region Report Period Forecast Previous 00:30 Japan Household Spending December 0.40% y/y 0.20% y/y 00:30 Japan Unemployment Rate December 4.10% 4.10% 02:45 China PMI Manufacturing (F) January :00 Poland PMI Manufacturing January :50 France PMI Manufacturing January :00 EU PMI Manufacturing January :30 UK PMI Manufacturing January :00 EU Unemployment Rate December 11.80% 14:30 USA Average Hourly Earnings January :30 USA Average Workweek Hours January :30 USA Manufacturing Payrolls Change January 25,000 m/m 14:30 USA Nonfarm Payrolls Change January 155,000 m/m 14:30 USA Unemployment Rate January 7.80% 16:00 USA Construction Spending December -0.26% 16:00 USA ISM Manufacturing January 50.7 Monday / / Time Region Report Period Forecast Previous 10:30 EU Sentix Index February :00 EU PPI December -0.20% m/m; 2.10% y/y Tuesday / / Time Region Report Period Forecast Previous 00:15 Japan PMI Services January :45 China PMI Services January :30 UK Foreign Reserves January 48.11bn 10:30 UK PMI Services January :00 EU Retail Sales December 0.1% m/m; -2.6% y/y 16:00 USA ISM Non-Manufacturing January January

5 Current recommendations of BRE Bank Securities S.A. Company Recommendation Date issued Price on report date Target price Current price Upside / Downside Banks BZ WBK Accumulate % GETIN NOBLE BANK Accumulate % HANDLOWY Hold % ING BSK Hold % MILLENNIUM Accumulate % PEKAO Hold % PKO BP Accumulate % Insurance PZU Hold % Financial services KRUK Buy % Fuels, chemicals CIECH Buy % LOTOS Reduce % MOL Hold % PGNiG Hold % PKN ORLEN Hold % POLICE Reduce % ZA PUŁAWY Hold % Power Utilities CEZ Hold % ENEA Accumulate % PGE Hold % TAURON Buy % Telecommunications NETIA Accumulate % TPSA Accumulate % Media AGORA Hold % CINEMA CITY Accumulate % CYFROWY POLSAT Hold % TVN Accumulate % IT AB Accumulate % ACTION Accumulate % ASBIS Hold % ASSECO POLAND Hold % COMARCH Reduce % SYGNITY Accumulate % Mining & Metals JSW Accumulate % KGHM Accumulate % LW BOGDANKA Accumulate % Manufacturers ALCHEMIA Hold % ASTARTA Buy % BORY SZEW Hold % FAMUR Reduce % IMPEXMETAL Buy % KERNEL Accumulate % KĘTY Reduce % KOPEX Reduce % ROVESE Hold % Construction BUDIMEX Hold % ELEKTROBUDOWA Hold % ERBUD Buy % MOSTOSTAL WAR. Hold % PBG Suspended POLIMEX MOSTOSTAL Suspended RAFAKO Hold % TRAKCJA TILTRA Suspended ULMA CP Buy % UNIBEP Buy % ZUE Hold % Property Developers BBI DEVELOPMENT Accumulate % DOM DEVELOPMENT Sell % ECHO Accumulate % GTC Hold % J.W.C. Reduce % PA NOVA Buy % POLNORD Hold % ROBY G Hold % January

6 CEE bank valuations / / ROE P/BV Price POLISH BANKS BZ WBK % 15% 12% % 2.4% 2.8% Getin Noble Bank % 9% 7% % 0.0% 0.0% Handlowy % 14% 11% % 2.8% 5.7% ING BSK % 12% 10% % 0.0% 0.0% Millenium % 10% 7% % 0.0% 0.0% Pekao % 13% 11% % 3.2% 5.0% PKO BP % 16% 12% % 3.6% 4.3% Median % 13% 11% % 2.4% 2.8% INVESTORS IN POLISH BANKS BCP % -24% -10% % 0.0% 0.0% Citigroup % 6% 7% % 0.1% 1.1% Commerzbank % 2% 3% % 0.0% 0.4% ING % 7% 8% % 0.1% 1.5% KBC % 8% 11% % 0.4% 1.0% Santander % 5% 8% % 8.2% 8.3% UCI % 2% 3% % 1.2% 2.1% Median % 5% 8% % 0.3% 1.3% FOREIGN BANKS Banco Popular Espanol % -28% 3% % 0.0% 1.7% Deutsche Bank % 6% 7% % 2.0% 2.1% Erste Bank % 6% 7% % 1.5% 2.1% Raif feisen International % 10% 9% % 2.8% 3.0% Komercni % 16% 14% % 6.0% 6.1% OTP % 8% 9% % 2.9% 3.8% Sbierbank % 24% 21% % 2.5% 3.0% VTB Bank % 13% 14% % 1.3% 1.7% Turkiy e Garanti Bank % 17% 17% % 1.7% 2.0% Turkiy e Halk Bank % 24% 21% % 2.0% 2.7% Median % 11% 12% % 2.0% 2.4% Insurance company valuations / / ROE P/BV Price PZU % 27% 19% % 8.2% 7.6% FOREIGN COMPANIES Vienna Insurance G % 9% 9% % 3.1% 3.5% Uniqa % 10% 11% % 2.4% 2.6% Aegon % 6% 5% % 4.1% 4.6% Allianz % 11% 11% % 4.4% 4.6% Av iv a % 4% 12% % 6.9% 6.8% AXA % 9% 9% % 5.3% 5.6% Baloise % 10% 10% % 5.4% 5.5% Generali % % 6.0% 6.0% Helv etia % 10% 10% % 4.5% 4.6% Mapf re % 13% 13% % 5.4% 6.0% RSA Insurance % 11% 13% % 6.8% 6.9% Zurich Financial % 11% 12% % 6.9% 7.0% Median % 10% 11% % 5.3% 5.6% Fuel producer valuations / / OIL COMPANIES Lotos % 3% 5% 0.0% 0.0% 0.0% PKN Orlen % 4% 4% 0.0% 0.0% 7.4% MOL % 11% 12% 3.4% 3.5% 4.3% OMV % 13% 14% 3.3% 3.7% 3.9% Hellenic Petroleum % 5% 6% 5.1% 5.2% 5.4% Tupras % 4% 4% 7.0% 6.9% 7.2% Unipetrol % 4% 4% 0.0% 1.5% 1.5% Median % 4% 5% 3.3% 3.5% 4.3% GAS COMAPNIES Gazprom % 37% 35% 4.7% 5.8% 5.8% GDF Suez % 18% 18% 9.9% 9.8% 9.8% Gas Natural SDG % 22% 21% 5.4% 5.9% 6.2% Median % 22% 21% 5.4% 5.9% 6.2% Source: BRE Bank Securities for Polish companies, IBES/Bloomberg for foreign companies 30 January

7 Power utilities valuations / / ENERGY COMPANIES CEZ % 42% 44% 8.0% 7.3% 7.3% ENEA % 17% 15% 2.8% 3.1% 3.3% PGE % 28% 23% 4.3% 10.3% 6.7% TAURON % 15% 14% 3.2% 6.6% 6.4% E.ON % 10% 10% 7.5% 8.3% 8.3% EDF % 23% 23% 8.0% 8.1% 8.3% Endesa % 21% 21% 5.9% 4.1% 4.2% ENEL SpA % 22% 22% 8.1% 4.5% 4.5% Fortum % 40% 39% 7.5% 7.4% 7.3% Iberdrola % 24% 24% 8.0% 7.6% 6.8% RWE AG % 17% 17% 7.2% 7.2% 7.3% Median % 22% 22% 7.5% 7.3% 6.8% Fertilizer producer and chemical company valuations / / FERTILIZER PRODUCERS POLICE % 8% 6% 0.0% 0.0% 0.0% ZA Puławy % 12% 9% 2.8% 9.0% 5.4% Acron % 27% 25% 7.5% 5.7% 4.1% Agrium % 17% 15% 0.2% 0.9% 1.1% DSM % 37% 37% 1.8% 0.8% 0.8% K+S % 27% 28% 3.8% 4.0% 4.2% Uralkali % 59% 62% 4.7% 5.0% 6.4% Yara % 20% 18% 2.3% 2.7% 2.9% Median % 23% 22% 2.6% 3.4% 3.5% CHEMICAL COMPANIES Ciech % 1% 12% 0.0% 0.0% 0.0% Akzo Nobel % 12% 13% 2.8% 2.9% 3.1% BASF % 16% 16% 3.1% 3.4% 3.5% Croda % 27% 28% 2.2% 2.5% 2.7% Dow Chemical % 13% 14% 2.6% 3.5% 3.6% Sisecam % 22% 22% 1.2% 1.0% 1.5% Soda Sanay ii % 20% 19% 5.3% 2.4% 4.5% Solv ay % 15% 16% 2.5% 2.6% 2.8% Tata Chemicals % 17% 17% 2.5% 2.8% 3.0% Tessenderlo Chemie % 8% 9% 5.2% 5.2% 5.2% Wacker Chemie % 17% 18% 4.6% 1.8% 2.2% Median % 16% 16% 2.6% 2.6% 3.0% European national telecom operator valuations / / Netia % 26% 28% 0.0% 0.0% 8.7% TPSA % 35% 36% 12.5% 12.6% 8.3% Median % 30% 32% 6.3% 6.3% 8.5% MID CAPS Belgacom % 28% 28% 9.7% 9.7% 9.6% Cesky Telecom % 40% 40% 12.1% 12.2% 11.6% Hellenic Telekom % 35% 35% 1.9% 0.4% 0.7% Matav % 33% 35% 12.5% 12.3% 13.2% Portugal Telecom % 34% 34% 20.4% 9.6% 8.9% Telecom Austria % 33% 33% 6.9% 5.0% 5.5% Median % 34% 34% 11% 10% 9% BIG CAPS BT % 31% 33% 3.0% 3.4% 3.9% DT % 31% 31% 7.8% 7.8% 7.5% FT % 32% 31% 16.3% 13.6% 12.3% KPN % 37% 37% 19.6% 8.1% 9.0% Swisscom % 39% 39% 5.5% 5.5% 5.7% TELEFONICA % 34% 34% 14.1% 0.0% 6.9% TeliaSonera % 35% 35% 6.1% 7.3% 7.5% TI % 40% 40% 6.3% 5.9% 6.3% Median % 34% 35% 7.1% 6.6% 7.2% Source: BRE Bank Securities for Polish companies, IBES/Bloomberg for foreign companies 30 January

8 IT company valuations / / AB % 2% 2% 1.2% 1.1% 1.2% ACTION % 2% 2% 1.4% 2.6% 2.8% ASBIS % 1% 1% 2.0% 3.0% 2.8% ASSECO POLAND % 17% 17% 3.9% 4.8% 5.2% COMARCH % 10% 9% 0.0% 1.8% 1.8% KOMPUTRONIK % 2% 2% 0.0% 0.0% 2.5% SYGNITY % 3% 6% 0.0% 0.0% 0.0% Median % 2% 2% 1.2% 1.8% 2.5% FOREIGN COMPANIES Accenture % 16% 16% 1.3% 1.8% 2.2% Atos Origin % 10% 11% 1.0% 1.2% 1.3% CapGemini % 9% 10% 2.8% 2.9% 2.9% IBM % 26% 27% 1.4% 1.6% 1.7% Indra Sistemas % 10% 10% 6.7% 4.6% 4.7% LogicaCMG % 8% 8% 4.1% 4.2% 4.4% Microsof t % 42% 43% 2.0% 2.8% 3.0% Oracle % 50% 51% 0.5% 0.7% 0.7% SAP % 35% 36% 1.2% 1.4% 1.6% TietoEnator % 11% 12% 4.0% 4.4% 5.2% Median % 13% 14% 1.7% 2.3% 2.5% Media company valuations / / AGORA % 8% 7% 5.6% 11.3% 5.6% CYFROWY POLSAT % 36% 33% 0.0% 0.0% 0.0% TVN % 30% 29% 0.4% 1.0% 1.0% Median DAILY Arnolgo Mondadori % 6% 7% 11.4% 2.4% 4.9% Axel Springer % 19% 19% 4.9% 5.2% 5.4% Daily Mail % 19% 19% 2.9% 3.1% 3.3% Gruppo Editorial % 14% 15% 7.0% 4.6% 4.7% Mcclatchy % % 0.0% 0.0% Naspers % 18% 15% 0.5% 0.6% 0.7% New York Times % 15% 16% 0.0% 0.0% 0.0% Promotora de Inf orm % 19% 20% 0.0% 0.0% 0.0% SPIR Comm % 6% 7% 0.0% 0.0% 0.0% Trinity Mirror % 19% 19% 0.9% 0.3% 1.0% Median % 18% 16% 0.7% 0.4% 0.8% TV Antena 3 Telev is % 8% 9% 7.4% 3.3% 3.4% CETV % 0.0% 0.0% Gestev ision Telecinco % 7% 11% 6.0% 2.0% 3.0% ITV PLC % 24% 24% 1.2% 2.0% 2.6% M6-Metropole Tel % 20% 20% 7.9% 7.7% 7.7% Mediaset SPA % 25% 28% 8.3% 3.7% 4.0% RTL Group % 22% 22% 6.7% 6.8% 6.9% TF1-TV Francaise % 13% 13% 6.9% 6.1% 6.4% Median % 20% 20% 6.8% 3.5% 3.7% PAY TV BSkyB PLC % 23% 23% 2.7% 3.1% 3.5% VIVENDI % 28% 27% 8.8% 6.3% 6.4% Cogeco % 46% 45% 1.5% 2.3% 2.5% Comcast % 32% 33% 1.2% 1.6% 1.8% Liberty Global % 47% 48% 0.0% 0.0% 0.0% Shaw Communications % 42% 42% 3.8% 4.0% 4.1% Median % 37% 37% 2.1% 2.7% 3.0% Mining company valuations / / KGHM % 32% 32% 8.0% 15.3% 5.4% FOREIGN COMPANIES Anglo Amer % 30% 32% 3.8% 3.9% 4.2% BHP Billiton % 47% 45% 4.5% 5.3% 5.6% Freeport-MCMOR % 39% 45% 4.2% 3.5% 3.8% Rio Tinto % 37% 40% 3.5% 4.4% 4.7% Southern Peru % 57% 56% 5.9% 4.1% 3.5% Median % 39% 45% 4.2% 4.1% 4.2% Source: BRE Bank Securities for Polish companies, IBES/Bloomberg for foreign companies 30 January

9 Construction company valuations / / Budimex % 3% 5% 14.0% 16.9% 0.0% Elektrobudowa % 5% 5% 4.3% 2.9% 1.8% Erbud % 3% 0.2% 0.0% 2.0% Mostostal Warszawa % 3.8% 0.0% 0.0% Polimex Mostostal % 6% 6% 6.7% 0.0% 0.0% Raf ako % 5% 7% 6.4% 0.0% 0.0% Ulma Construccion % 45% 34% 3.0% 5.0% 2.2% Unibep % 3% 3% 2.0% 0.0% 0.0% ZUE % 4% 5% 0.0% 0.0% 0.0% Median % 5% 5% 3.8% 0.0% 0.0% FOREIGN COMPANIES AMEC % 9% 9% 2.7% 3.0% 3.5% BILFINGER % 7% 7% 4.1% 3.9% 3.9% EIFFAGE % 15% 15% 3.5% 3.6% 3.8% HOCHTIEF % 6% 6% 2.3% 2.6% 4.2% NCC % 5% 5% 6.9% 7.1% 7.3% SKANSKA % 4% 5% 6.0% 5.5% 5.8% STRABAG % 5% 5% 3.1% 2.3% 2.6% Median % 6% 6% 3.5% 3.6% 3.9% Property developer valuations / / P/BV BBI Dev elopment % 13% 12% 0.0% 0.0% 0.0% Dom Dev elopment % 14% 13% 2.6% 4.4% 5.5% Echo Inv estment % 36% 49% 0.0% 0.0% 0.0% GTC % 48% 0.0% 0.0% 0.0% J.W. Construction % 25% 18% 0.0% 0.0% 0.0% PA Nov a % 14% 21% 0.0% 2.6% 0.0% Polnord % 48% 20% 3.0% 0.0% 0.0% Roby g % 17% 15% 4.6% 7.9% 6.6% Median % 20% 19% 0% 0% 0% FOREIGN COMPANIES CA IMMO INTERNATIONAL % 48% - 1.8% 3.8% - CITYCON % 56% 56% 5.7% 6.1% 6.1% CORIO % 83% 83% 7.6% 7.6% 7.6% DEUTSCHE EUROSHOP % 89% 88% 3.6% 3.6% 3.8% HAMMERSON % 79% 79% 3.4% 3.6% 3.7% KLEPIERRE % 86% 86% 4.7% 5.0% 5.1% SPARKASSEN IMMO % 52% 51% 2.1% 2.2% 2.2% UNIBAIL-RODAMCO % 88% 88% 4.6% 4.8% 5.0% Median % 81% 83% 4.1% 4.3% 5.0% Machinery manufacturer valuations / / ALCHEMIA % 10% 12% 0.0% 0.0% 0.0% FAMUR % 33% 28% 3.5% 0.0% 5.2% KOPEX % 14% 14% 0.0% 0.0% 3.6% Median % 14% 14% 0.0% 0.0% 3.6% FOREIGN COMPANIES Atlas Copco % 24% 24% 2.5% 3.0% 3.1% Caterpillar % 17% 18% 1.9% 2.1% 2.2% Emeco % 45% 47% 11.0% 8.7% 9.9% Industrea % 33% 34% 2.8% 2.7% 3.2% Joy Global % 24% 24% 1.1% 1.1% 1.1% Median % 24% 24% 2.5% 2.7% 3.1% Source: BRE Bank Securities for Polish companies, IBES/Bloomberg for foreign companies 30 January

10 WIG Banks index vs. WIG 20 index (EUR) 650 OTP and Komercni s relative performance vs. WIG Banks index (EUR) WIG 20 WIG Banks relative 680 WIG Banks OTP relative Komercni relative BRENT (USD/bbl) BRENT BRENT (USD/bbl) 1 0 BRENT (USD/bbl) MARGIN BRENT/NWE 3:2: URALS/BRENT PRICE DIFFERENTIAL TPSA vs. BETELES - Bloomberg Europe 500 Telecom Services Index (EUR) National operator quotations: TPSA, Hungarian Magyar Telecom and Czech SPT (EUR) TPSA relative BETELES TPSA Matav relative SPT relative Source: Bloomberg 30 January

11 WIG Media index vs. WIG 20 index (EUR) WIG IT index vs. MSCI WIG 20 WIG Media relative WIG IT MSCI relative WIG Construction index vs. WIG 20 index (EUR) 720 WIG Developers index vs. WIG 20 index (EUR) , ,5 524 WIG 20 WIG Construction relative WIG 20 WIG Developers relative Copper price on LME 8800 USD/t 8360 KGHM vs. mining&metal sector index (USD) 452,2 411, , , M 290,44 mining&metal KGHM relative Source: Bloomberg 30 January

12 Michał Marczak tel. (+48 22) Managing Director Head of Research Strategy, Telco, Mining, Metals Research Department: Kamil Kliszcz tel. (+48 22) Deputy Director Fuels, Chemicals, Energy Iza Rokicka tel. (+48 22) Banks Maciej Stokłosa tel. (+48 22) Construction Jakub Szkopek tel. (+48 22) Manufacturers Piotr Zybała tel. (+48 22) Real-Estate Developers Sales and Trading: Piotr Dudziński tel. (+48 22) Director Marzena Łempicka-Wilim tel. (+48 22) Deputy Director Head of Foreign Institutional Sales: Matthias Falkiewicz tel. (+48 22) Traders: Michał Jakubowski tel. (+48 22) Tomasz Jakubiec tel. (+48 22) Szymon Kubka tel. (+48 22) Anna Łagowska tel. (+48 22) Paweł Majewski tel. (+48 22) Adam Prokop tel. (+48 22) Michał Rożmiej tel. (+48 22) Jakub Słotkowicz tel. (+48 22) "Private Broker" Jarosław Banasiak tel. (+48 22) Director, Active Sales Dom Inwestycyjny BRE Banku S.A. ul. Wspólna 47/ Warszawa 30 January

13 List of abbreviations and ratios contained in the report. EV net debt + market value (EV economic value) EBIT Earnings Before Interest and Taxes EBITDA EBIT + Depreciation and Amortisation PBA Profit on Banking Activity P/CE price to earnings with amortisation MC/S market capitalisation to sales EBIT/EV operating profit to economic value (Price/Earnings) price divided by annual net profit per share ROE (Return on Equity) annual net profit divided by average equity P/BV (Price/Book Value) price divided by book value per share Net debt credits + debt papers + interest bearing loans cash and cash equivalents EBITDA/Sales Recommendations of BRE Bank Securities S.A. A recommendation is valid for a period of 6-9 months, unless a subsequent recommendation is issued within this period. Expected returns from individual recommendations are as follows: BUY we expect that the rate of return from an investment will be at least 15% ACCUMULATE we expect that the rate of return from an investment will range from 5% to 15% HOLD we expect that the rate of return from an investment will range from 5% to +5% REDUCE we expect that the rate of return from an investment will range from -5% to -15% SELL we expect that an investment will bear a loss greater than 15% Recommendations are updated at least once every nine months. The present report expresses the knowledge as well as opinions of the authors on day the report was prepared. The opinions and estimates contained herein constitute our best judgement at this date and time, and are subject to change without notice. The present report was prepared with due care and attention, observing principles of methodological correctness and objectivity, on the basis of sources available to the public, which BRE Bank Securities S.A. considers reliable, including information published by issuers, shares of which are subject to recommendations. However, BRE Bank Securities S.A., in no case, guarantees the accuracy and completeness of the report, in particular should sources on the basis of which the report was prepared prove to be inaccurate, incomplete or not fully consistent with the facts. This document does not constitute an offer or invitation to subscribe for or purchase any financial instruments and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. It is being furnished to you solely for your information and may not be reproduced or redistributed to any other person. This document nor any copy hereof is not to be distributed directly or indirectly in the United States, Australia, Canada or Japan. Recommendations are based on essential data from the entire history of a company being the subject of a recommendation, with particular emphasis on the period since the previous recommendation. Investing in shares is connected with a number of risks including, but not limited to, the macroeconomic situation of the country, changes in legal regulations as well as changes on commodity markets. Full elimination of these risks is virtually impossible. BRE Bank Securities S.A. bears no responsibility for investment decisions taken on the basis of the present report or for any damages incurred as a result of investment decisions taken on the basis of the present report. It is possible that BRE Bank Securities S.A. renders, will render or in the past has rendered services for companies and other entities mentioned in the present report. BRE Bank Securities S.A., its shareholders and employees may hold long or short positions in the issuers shares or other financial instruments related to the issuers shares. BRE Bank Securities S.A., its affiliates and/or clients may conduct or may have conducted transactions for their own account or for account of another with respect to the financial instruments mentioned in this report or related investments before the recipient has received this report. Copying or publishing the present report, in full or in part, or disseminating in any way information contained in the present report requires the prior written agreement of BRE Bank Securities S.A. Recommendations are addressed to all Clients of BRE Bank Securities S.A. The activity of BRE Bank Securities S.A. is subject to the supervision of the Polish Financial Supervision Commission. BRE Bank Securities S.A. serves as underwriter for the following issuers: Asseco BS, Bakalland, BOŚ, Erbud, Es-System, Kruk, Macrologic, Magellan, Mieszko, Neuca, Pemug, Polimex Mostostal, Solar, ZUE. BRE Bank Securities S.A. serves as market maker for the following issuers: Alchemia, Asseco BS, Bakalland, BOŚ, Erbud, Es-System, KGHM, Kruk, LW Bogdanka, Macrologic, Magellan, Marka, Mieszko, Neuca, Pekao, PKN Orlen, PKO BP, Solar, ZUE. BRE Bank Securities S.A. receives remuneration from issuers for services rendered to the following companies: AB, Agora, Ambra, Bakalland, BNP Paribas, Boryszew, BPH, BRE Bank, BZ WBK, Deutsche Bank, Echo Investment, Elzab, Enea, Energoaparatura, Energomontaż Północ, Erbud, Es-System, Farmacol, Ferrum, Getin Holding, GTC, Handlowy, Impexmetal, ING BSK, Intergroclin Auto, Ipopema, Koelner, Kredyt Bank, Kruk, Magellan, Mennica, Mercor, Mieszko, Millennium, Mostostal Warszawa, Netia, Neuca, Odratrans, Orbis, Paged, PA Nova, Pekao, Pemug, PGE, PGNiG, PKO BP, Polimex-Mostostal, Polnord, Prochem, Prokom Software, PZU, Robyg, Rubikon Partners NFI, Seco Warwick, Solar, Sygnity, Techmex, Unibep, ZUE. In the last 12 months BRE Bank Securities S.A. has been an offering agent of the issuer s shares in a public offering for the following companies: BRE Bank Hipoteczny, Grupa o2, Solar. Asseco Poland provides IT services to BRE Bank Securities. Individuals who did not participate in the preparation of recommendations, but had or could have had access to recommendations prior to their publication, are employees of BRE Bank Securities S.A. authorised to access the premises in which recommendations are prepared, other than the analysts mentioned as the authors of the present recommendations. Strong and weak points of valuation methods used in recommendations: DCF acknowledged as the most methodologically correct method of valuation; it consists in discounting financial flows generated by a company; its weak point is the significant susceptibility to a change of forecast assumptions in the model. Comparative based on a comparison of valuation multipliers of companies from a given sector; simple in construction, reflects the current state of the market better than DCF; weak points include substantial variability (fluctuations together with market indices) as well as difficulty in the selection of the group of comparable companies. 30 January