CEE Equity Monthly - wall- · PDF fileCEE Equity Monthly September 2011 More of the same?!...

CEE Equity MonthlySeptember 2011

More of the same?!

Growth outlook deteriorating

Recession largely priced in

�� but might deteriorate further

��

Summary

Erste Group Research - CEE Equity Monthly, September 2011 Page 1

Summary 2

Highest upside potential 3

Changes in Estimates 4

Changes in Ratings 4

Changes in Target Prices 5

One Month Performance 5

Top 20 Dividend Yield 6

Top 20 P/E 6

Top 20 by Turnover 7

Stock Market Performances 8 Sector Performance 9

2Q Reporting Summary 12

Macroeconomy 15

Real Economy 15 Interest Rates and Currencies 17 Special Events 18 Sector Insight 19

Automobile & Parts 19 Banks 23 Basic Resources 43 Chemicals 50 Construction 57 Food & Beverages 66 Healthcare 71 Industrial Goods & Services 79 Insurance 86 Media 92 Oil & Gas 99 Personal & Household Goods 109 Real Estate 114 Retail & Distribution 122 Romanian Funds & other Holdings 128 Technology 130 Telecom 136 Travel & Tourism 141 Utilities 146

Looking Ahead 152 Contacts 154 Disclosures 155

Share prices are as of September 1, 2011.All prices are those current at the end of the previous trading session unless otherwise indicated and are sourced from local exchanges via Reuters, Bloomberg and other vendors.

Source for all charts and tables is Erste Group, Bloomberg, Factset. Consensus data are taken from Factset- Excel-Connect. In the sector insights the companies’ relative valuation multiples are comparisons to those for their CEE sectors. All aggregate measures are calculated as a median.

Table of Contents

Summary


Growth is clearly on a decelerating path. Not only has Germany been posting weak 2Q numbers, but GDP in the region has also been slowing down, with the exception of Poland. The main question, however, is if this is just a cooling down (a pretty strong and immediate showing, admittedly) that was to be expected, since the strong upswing seen in rebounding economies could not last forever? Or is this a serious downswing that might lead at least some markets into temporary recession again? We tend to believe that equity markets have been pricing in the latter, turning sharply south in the recent past. In this case, we have a feeling that we are a bit in a situation like last time - there was a bit of an overreaction, which also becomes visible in the moderate rebound moves that we have seen already. Hungary might remain a bit vulnerable, since it carries the risk of its CHF exposure (along with being quite fragile in terms of growth otherwise), but measures announced by the government give a bit of a more positive outlook.

The positive spin is that inflation is no longer a hot issue and even in troubled Turkey things seems to be getting easier, with oil prices (as the main contributor) going down. Consequently, central banks turned much more dovish and monetary tightening should no longer be an issue for this year. Moreover, rate cuts should not be an immediate response, since all currencies in the region have become weaker. Turkey and Poland saw the bill for their C/A deficit and short-term financing. In contrast, the HUF and RON have held up quite well, also reflecting the fact that their position is not so weak anymore, when compared to where they were in the previous crisis.

In July, we witnessed a continuation of inflows for global emerging market funds and a deceleration of outflows for more regional funds, such as EMEA. However, with the developed markets having very little room to maneuver and emerging markets still posting growth, we might experience a stronger shift towards emerging markets again. Within CEE, we would still keep an eye on Turkey (as a short-term target), which seems to be getting its growth related troubles under control, but would still avoid banks. Poland still offers a growth story, but it remains to be seen if it will be able to hold up as strongly as in the previous crisis. Hungary could offer quite some potential, but remains in a very fragile situation in the short term, and we had to shave some of its GDP growth already.

Valuation-wise, the CEE region is in pretty attractive shape. Even markets that used to be traded rather close to their implied fair values, such as Hungary and Poland (let alone Turkey), now offer decent upside. Croatia is the only exception to the rule. When taking the reduced growth outlook into account, the picture becomes a bit more differentiated. We are still well below historical averages for the region when calculating a PEG ratio based on 12M forward consensus data. Croatia is an exception here as well, remaining a bit pricey relative to other markets, while Austria (in particular) offers decent upside on valuation, also relative to growth. Poland and Romania still offer upside, while Hungary appears to be fairly priced. The Czech Republic and Turkey offer less of an upside.

However, we would not bet too strongly on any valuation/growth theme and would certainly remain more on the defensive side in our stock selection right now. In particular, with major sentiment indicators running massively south, further negative earnings revision is in the cards, of course again with the risk that sentiment increasingly translates into the real economy, as we experienced last time. In terms of relative performance, defensives are doing clearly better right now, despite the fact that cyclicals have been trying to fight back, whenever there was a lack of negative news.

Still in the market’s focus, we tend to avoid banking stocks for the most part. Slowing economies, strong Swiss franc, euro debt crisis and capitalization concerns do not offer the best outlook. Asset quality should further improve in core CE, but might weaken further in SEE and Hungary. However, 2Q has been rather strong, in particular for Polish and Hungarian banks. After surprising nicely, RBI is our top pick for the sector, followed by OTP, PKO BP, BRD GSG.

Since we mentioned dividend yields as a main theme these days, we would also pay attention to the sustainability of any payout. Apart from Austrian Post, we would feel comfortable in all cases where there is a majority owner who cares about decent cash being returned. Hence, telcos appear to be attractive, with the exception of Telekom Austria, which has its own problems. Other high dividend yields are mostly the result of strong declines in share prices. Among other defensives, we like Richter Gedeon. When searching for growth, coupled with reasonable valuation, we still like Kapsch TrafficCom, AMAG and Polytec in Austria. We appreciate Ukraine’s Astarta as exposure to something quite tangible. Sojaprotein, at current price levels, also appears attractive. In real estate, Immofinanz is still our favorite choice.

Summary


Highest upside potential / top picks Current price (LC) Target price (LC) Recommendation Upside

Polytec 6.6 13.5 Buy 104.5%Mostostal Warszawa 23.4 47.0 Buy 101.0%Kulczyk Oil Ventures 1.2 2.4 Buy 99.2%Vistula Group 1.0 2.0 Buy 98.0%ACE 6.4 12.2 Buy 91.6%BWT 15.0 28.2 Buy 88.0%AT&S 10.2 19.0 Buy 86.5%Raiffeisen Bank International 29.8 55.0 Buy 84.6%PannErgy 690.0 1,228.0 Buy 78.0%Park Elektrik 3.0 5.2 Buy 74.2%Albalact 0.2 0.3 Buy 72.6%Turcas Petrol AS 2.8 4.9 Buy 72.0%Astarta Holding NV 81.0 139.2 Buy 71.9%Asseco Poland 42.8 72.8 Buy 69.9%Gorenje 7.1 12.0 Buy 69.0%Sinpas REIT 1.6 2.6 Buy 66.7%Arcelik 6.0 9.9 Buy 65.0%S Immo 3.9 6.3 Buy 59.7%Immofinanz 2.5 4.0 Buy 59.5%Turkiye Sinai Kalkinma Bankas 1.8 2.9 Buy 59.3%RHI 17.5 27.5 Buy 56.7%Neuca 64.2 100.0 Buy 55.8%Krka 57.5 89.5 Buy 55.7%Aselsan 7.1 11.1 Buy 55.5%Action SA 15.4 24.0 Buy 55.4%voestalpine 26.4 41.0 Buy 55.3%Vienna Insurance Group 32.7 50.0 Buy 52.9%AMAG 15.9 24.0 Buy 50.9%Kapsch TrafficCom 55.7 84.0 Buy 50.8%Akcansa 6.5 9.7 Buy 50.2%Eurocash 24.7 37.0 Buy 49.8%Petrom 0.3 0.5 Buy 49.3%austriamicrosystems 38.2 56.8 Buy 48.9%Aksa Enerji Uretim AS 2.6 3.8 Buy 47.9%Apator 16.7 24.7 Buy 47.6%TVN 14.7 21.0 Buy 43.3%Gubre Fabrikalari 11.4 16.3 Buy 43.0%DO & CO 28.0 40.0 Buy 42.9%Emlak Konut REIT 2.2 3.2 Buy 42.9%Halkbank 10.8 14.7 Buy 36.7%Allami Nyomda 753.0 1,010.0 Buy 34.1%CNG 2.3 3.0 Buy 31.7%Richter Gedeon 34,790.0 45,500.0 Buy 30.8%Turk Telekomunikasyon AS 7.8 10.2 Buy 30.1%Lenzing 82.3 104.9 Buy 27.5%OMV 27.3 34.0 Buy 24.6%E-Star 7,995.0 9,920.0 Buy 24.1%Transelectrica 19.4 24.0 Buy 23.7%Wolford 24.6 30.0 Buy 22.1%KGHM 168.5 202.0 Buy 19.9%Austrian Post 22.2 26.0 Buy 17.0%Colian (Jutrzenka) 2.4 2.7 Buy 14.9%STRABAG 24.0 24.0 Buy 0.1%

Summary


Changes in estimates Changes inforecasts

2011e 2012e 2013e 2011e 2012e 2013eAndritz 3.788 4.250 4.613 3.850 3.703 4.175Atlantic Grupa 34.908 42.779 54.059 19.521 29.817 41.699Austrian Post 1.797 1.884 1.892 1.833 1.901 1.929Biofarm 0.017 0.017 0.022 0.020 0.022CAToil 0.441 0.673 0.774 0.371 0.604 0.671CEZ 76.864 81.407 91.232 76.810 81.323 82.543Colian (Jutrzenka) 0.272 0.307 0.319 0.183 0.211 0.213FHB 82.656 108.887 111.308 45.680 50.650 68.047Gorenje 1.232 1.569 1.947 0.909 1.266 1.604Lenzing 8.943 9.392 10.790 9.430 7.846 9.927Mayr-Melnhof 6.335 6.520 6.686 5.919 5.964 6.197OMV 5.129 5.235 5.456 3.725 3.932 4.296PGF 6.142 5.523 5.673 4.449 3.978 4.663Polytec 1.466 1.226 1.281 1.418 1.261 1.314SBO 3.703 4.624 4.868 3.240 3.285 3.666Telekom Austria 0.374 0.792 0.869 0.037 0.461 0.560Vienna Int. Airport 3.917 2.830 3.376 3.946 2.381 2.175

PreviousEPS (local currency)

CurrentEPS (local currency)

Changes in Ratings Changes in Previous Current Date of recommendation change

Akenerji Elektrik Init iated with Accumulate 26-Aug-11Aksa Enerji Uretim AS Init iated with Buy 26-Aug-11Andritz Accumulate Hold 03-Aug-11Bagfas Init iated with Accumulate 02-Aug-11Biofarm Hold Accumulate 03-Aug-11Colian (Jutrzenka) Hold Buy 25-Aug-11Ege Gubre Init iated with Accumulate 02-Aug-11Emlak Konut REIT Init iated with Buy 04-Aug-11Gorenje Accumulate Buy 22-Aug-11Gubre Fabrikalari Init iated with Buy 02-Aug-11PGF Reduce Sell 01-Sep-11Sinpas REIT Init iated with Buy 04-Aug-11Telekom Austria Hold Sell 23-Aug-11Vienna Int. Airport Hold Reduce 30-Aug-11Zorlu Enerji Init iated with Accumulate 26-Aug-11

Summary


Changes in Target Prices Changes in Previous Current Date of target price (local currency) (local currency) change

Akenerji Elektrik Initiated with 3.60 26-Aug-11Aksa Enerji Uretim AS Initiated with 3.80 26-Aug-11Andritz 81.50 72.40 03-Aug-11Atlantic Grupa 925.00 720.00 24-Aug-11Austrian Post 27.10 26.00 25-Aug-11Bagfas Initiated with 178.50 02-Aug-11Biofarm 0.23 0.25 03-Aug-11CAToil 9.40 6.40 31-Aug-11CEZ 970.00 902.00 31-Aug-11Colian (Jutrzenka) 3.80 2.70 25-Aug-11Ege Gubre Initiated with 107.00 02-Aug-11Emlak Konut REIT Initiated with 3.20 04-Aug-11FHB 1,080.00 700.00 29-Aug-11Gorenje 16.00 12.00 22-Aug-11Gubre Fabrikalari Initiated with 16.30 02-Aug-11Lenzing 116.50 104.90 26-Aug-11Mayr-Melnhof 90.00 82.00 18-Aug-11OMV 40.00 34.00 16-Aug-11PGF 48.00 30.00 01-Sep-11Polytec 13.10 13.50 04-Aug-11SBO 71.40 58.10 17-Aug-11Sinpas REIT Initiated with 2.60 04-Aug-11Telekom Austria 11.00 5.50 23-Aug-11Vienna Int. Airport 43.00 32.00 30-Aug-11Zorlu Enerji Initiated with 2.00 26-Aug-11

One Month Performance (in EUR terms) Outperformer 1M YTD Underperformer 1M YTD

STRABAG 18.7% 16.9% FX Energy -40.2% -6.2%ZCh Police S.A. 12.8% 77.3% Empik -39.2% -54.7%Austrian Post 7.7% -10.1% Polimex -35.9% -54.3%Philip Morris CR 5.8% 4.4% CME -34.5% -39.1%Unipetrol 5.5% -7.6% Aksa Enerji Uretim AS -34.3% -49.2%Turk Telekomunikasyon AS 5.4% 20.6% Kulczyk Oil Ventures -33.6% -25.3%Agrana 0.1% 7.9% Vistula Group -33.4% -52.1%Pegas NW -0.6% -1.9% PBG S.A. -32.5% -55.9%INA -0.7% 31.7% Ciech S.A. -32.2% -35.9%T-Hrvatski Telekom -0.9% -12.7% Trakcja Polska -30.4% -53.4%

Summary


Top 20 Dividend Yield 2010 2011e 2012e

New World Resources 11.4% 10.1%Bagfas 13.6% 11.1% 10.5%Ford Otosan 11.1% 10.9% 10.8%Cimsa 6.3% 10.8% 9.0%Aygaz 5.2% 10.7% 6.7%Vestel 5.6% 10.0% 12.8%Magyar Telekom 9.8% 10.0% 9.8%Telekom Austria 7.1% 9.8% 9.8%Tupras 7.5% 9.7% 9.2%Atlantska plovidba 9.7% 9.6% 9.5%Turk Telekomunikasyon AS 10.2% 9.6% 9.8%Gubre Fabrikalari 0.0% 9.6% 7.9%Petrom 5.3% 9.5% 8.8%TPSA 9.1% 9.2% 8.8%T-Hrvatski Telekom 8.0% 8.8% 9.1%Philip Morris CR 8.0% 8.6% 7.4%Turkcell Iletisim Hizmetleri A 5.9% 8.6% 8.6%Telefónica CR 10.4% 8.2% 8.2%

Top 20 P/E 2010 2011e 2012e

Orco 0.4 3.5 3.1Aik Banka AD 5.5 3.6 2.8Sinpas REIT 16.5 3.7 3.5Lotos Group 7.0 4.2 3.7New World Resources 4.4 5.9GTC 32.3 4.6 4.4Polytec 4.1 4.7 5.2Aygaz 10.1 4.7 7.5Turkiye Sinai Kalkinma Ban 6.4 4.9 4.8Park Elektrik 15.2 4.9 6.1Trakcja Polska 9.1 5.0 4.8Sojaprotein AD 9.7 5.0 4.8Raiffeisen Bank Internationa 9.0 5.1 4.2Sekerbank 7.5 5.2 5.3Petrom 6.9 5.3 5.7KGHM 7.2 5.3 6.1Turkish Airlines 9.9 5.5 3.9Vakifbank 8.2 5.9 5.9Aselsan 7.8 6.0 5.7

Summary


Top 20 by Turnover Average turnover (EUR)* Average volume (pieces)

Garanti Bank 175,530,623 62,111,011Isbank 70,798,924 36,844,906KGHM 39,235,380 902,240OTP 36,359,217 1,911,718Emlak Konut REIT 31,516,040 30,574,736Halkbank 29,749,233 6,523,074PZU 26,920,917 304,774Yapi Kredi Bank 26,839,413 17,427,206PKO BP 26,255,169 2,730,192Akbank 26,041,140 9,134,604CEZ 22,817,512 657,139Bank Pekao 19,519,193 520,383Vakifbank 18,571,184 13,273,987voestalpine 17,797,988 536,559Turkish Airlines 17,324,004 13,702,968OMV 16,641,621 605,058PKN Orlen 16,370,339 1,474,754Tupras 14,330,620 917,851Komercni banka 13,909,852 88,799TPSA 13,620,043 3,364,551

* Average turnover is based on 3M daily average volume multipled with 3M average share price in EUR Source: for all charts& tables above Factset, Erste Group Research

Summary


Stock market Performances – CEE in Comparison (EUR terms) 1M 3M 6M 12M YTDNew Europe Blue Chip Index -12.6% -18.7% -15.9% -6.7% -15.1%ATX (Austria) -11.5% -18.0% -21.2% -7.5% -21.6%BELEX 15 (Serbia) -9.7% -23.9% -13.2% 7.1% 3.1%BET (Romania) -11.2% -15.4% -17.2% -3.3% -8.9%BUX (Hungary) -15.0% -23.9% -20.0% -17.6% -12.9%CROBEX (Croatia) -6.9% -11.4% -10.1% 5.8% -5.2%PX (Czech Republic) -11.8% -15.3% -14.9% -8.1% -11.9%SBI TOP (Slovenia) -8.5% -13.1% -18.0% -18.5% -21.4%PFTS (Ukraine) 0.0% 0.0% -17.8% 7.9% -7.2%WIG (Poland) -14.6% -20.7% -15.7% -6.6% -16.5%WIG 20 (Poland) -14.0% -20.7% -14.3% -6.0% -16.1%ISE 100 (Turkey) -15.2% -20.5% -16.9% -30.0% -31.4%

IRTS (Russia) -14.5% -8.1% -15.8% 5.7% -9.4%

MSCI Emerging Asia -11.8% -11.5% -8.7% -4.7% -14.9%MSCI Emerging Europe -14.6% -13.8% -16.0% -5.2% -14.5%MSCI Emerging Latin America -4.9% -6.2% -10.2% -10.2% -16.3%MSCI Emerging World -9.9% -9.9% -9.4% -5.7% -15.1%MSCI World Index -7.6% -10.1% -12.9% -2.6% -11.5%DJ EURO STOXX Automobiles & Parts -20.2% -19.1% -18.8% 6.9% -18.0%DJ EURO STOXX 50 -11.1% -18.5% -22.7% -15.1% -17.4%DJ EURO STOXX Banks -16.0% -29.5% -38.0% -39.0% -28.7%DJ EURO STOXX Basic Resources -22.1% -30.5% -36.2% -23.1% -36.9%DJ EURO STOXX Chemicals -15.1% -18.6% -14.2% 5.1% -14.4%DJ EURO STOXX Construction & Material -8.1% -21.7% -21.9% -4.3% -17.2%DJ EURO STOXX Food & Beverage -2.8% -6.2% -1.0% 2.2% -3.8%DJ EURO STOXX Health Care -3.7% -4.9% 2.7% 12.1% 9.6%DJ EURO STOXX Industrial Goods & Services -10.8% -19.3% -19.9% -2.1% -17.4%DJ EURO STOXX Insurance -13.2% -22.1% -28.0% -14.4% -15.9%DJ EURO STOXX Media -2.8% -12.0% -17.8% -11.4% -15.2%DJ EURO STOXX Oil & Gas -7.5% -13.8% -19.3% -5.3% -12.6%DJ EURO STOXX Personal & Household Goods -7.9% -9.1% -9.0% 0.4% -11.0%DJ EURO STOXX Retail -7.3% -17.4% -17.7% -16.8% -17.0%DJ EURO STOXX Technology -5.3% -15.5% -21.7% -2.9% -16.6%DJ EURO STOXX Telecommunications -5.3% -11.9% -17.2% -17.0% -12.4%DJ EURO STOXX Travel & Leisure -9.3% -17.2% -17.1% -9.1% -20.7%DJ EURO STOXX Utilities -11.9% -21.9% -27.0% -21.5% -23.2%

S&P 500 -6.7% -7.3% -10.5% 0.3% -9.8%DAX -17.6% -20.6% -20.7% -5.8% -17.1%

1M 3M 6M 12M YTDCurrenciesRSD 1.6% -2.7% 3.0% 4.8% -RON 0.0% -2.6% -0.7% 1.1% -HUF -1.3% -3.4% -1.0% 3.9% -HRK -0.7% -0.4% -0.9% -2.6% -CZK 0.2% 0.7% 0.3% 2.2% -UAH -0.3% 1.9% -2.7% -11.8% -PLN -3.3% -5.0% -4.3% -5.6% -TRY -1.5% -7.2% -9.8% -27.2% -

Indices in local currencyBELEX 15 (Serbia) -11.1% -21.3% -16.4% 2.1% -2.3%BET (Romania) -10.9% -14.0% -17.2% -5.2% -8.9%BUX (Hungary) -13.6% -21.6% -19.7% -20.6% -14.4%CROBEX (Croatia) -6.2% -10.7% -9.3% 8.8% -3.9%PX (Czech Republic) -11.8% -16.5% -15.5% -10.1% -15.1%SBI TOP (Slovenia) 0.0% 0.0% 0.0% 0.2% 0.0%PFTS (Ukraine) 0.0% 0.0% -14.6% 21.7% -0.9%WIG (Poland) -11.3% -16.8% -11.9% -2.2% -12.5%WIG 20 (Poland) -10.6% -16.8% -10.3% -1.6% -12.0%ISE 100 (Turkey) -12.9% -14.7% -8.1% -11.1% -18.3%Source: Factset

Summary


Sector Performance (EUR terms)Sector* 1M 3M 6M 12M

Telecom -1.3% -3.7% -3.3% -4.2%Food & Beverage -7.1% -5.4% -6.7% 8.3%Retail & Distribution -9.4% -6.2% -6.9% 13.4%Personal & Household Goods -5.4% -8.0% -5.9% -4.5%Healthcare -6.3% -9.9% -14.6% -27.8%Insurance -9.2% -13.2% -9.8% -8.4%Construct ion & Materials -3.6% -14.5% -19.8% -11.7%Erste Universe -9.9% -14.9% -11.2% -6.2%Media -9.5% -15.7% -14.0% -14.0%Banks -12.3% -15.9% -13.0% -14.8%Oil & Gas -9.7% -16.3% -13.0% 5.6%Chemicals -9.1% -16.9% -6.6% 42.4%Utilities -9.5% -17.2% -6.3% -6.7%Industrial Goods & Services -10.4% -18.7% -9.7% 17.1%Basic Resources -16.4% -19.3% -16.8% 10.5%Technology -11.1% -19.7% -20.4% 1.1%Travel & Tourism -14.3% -22.2% -23.4% -26.2%Automobiles & Parts -16.3% -22.3% -15.6% -3.2%Real Estate -12.3% -22.6% -18.6% -4.6%*based on Erste Group Research Coverage

Erste Coverage Universe Sector Automobiles & Parts

Sector Banks Sector Basic Resources

1,3001,3501,4001,4501,5001,5501,6001,6501,7001,7501,800

Sep-

10

Oct

-10

Nov

-10

Dec

-10

Jan-

11

Feb-

11

Mar

-11

Apr-1

1

May

-11

Jun-

11

Jul-1

1

Aug

-11

Sep-

11

1,1001,2001,3001,4001,5001,6001,7001,8001,9002,0002,100

Sep-10

Oct-10

Nov-10

Dec-10

Jan-1

1

Feb-11

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-11

Sep-11

1,6001,8002,0002,2002,4002,6002,8003,0003,2003,4003,600

Sep-10

Oct-10

Nov-10

Dec-10

Jan-1

1

Feb-11

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-11

Sep-11

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

Sep-

10

Oct

-10

Nov

-10

Dec

-10

Jan-

11

Feb-

11

Mar

-11

Apr-1

1

May

-11

Jun-

11

Jul-1

1

Aug-

11

Sep-

11

Summary


Sector Chemicals Sector Construction & Materials

Sector Food & Beverages Sector Health Care

Sector Industrial Goods & Services Sector Insurance

Sector Media Sector Oil & Gas

200250300350400450500550600

Sep-10

Oct-10

Nov-10

Dec-10

Jan-1

1

Feb-11

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-11

Sep-11

300

350

400

450

500

550

600

Sep-10

Oct-10

Nov-10

Dec-10

Jan-1

1

Feb-11

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-11

Sep-11

1,250

1,300

1,350

1,400

1,450

1,500

1,550

1,600

Sep-10

Oct-10

Nov-1

0

Dec-1

0

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-1

1

Sep-1

1900950

1,0001,0501,1001,1501,2001,2501,3001,3501,400

Sep-10

Oct-10

Nov-10

Dec-10

Jan-1

1

Feb-11

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-11

Sep-11

1,4001,6001,8002,0002,2002,4002,6002,8003,0003,2003,400

Sep-10

Oct-10

Nov-10

Dec-10

Jan-1

1

Feb-11

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-11

Sep-11

1,500

1,700

1,900

2,100

2,300

2,500

2,700

Sep-10

Oct-10

Nov-10

Dec-1

0

Jan-1

1

Feb-11

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-11

Sep-11

800850900950

1,0001,0501,1001,1501,2001,250

Sep-10

Oct-10

Nov-10

Dec-1

0

Jan-1

1

Feb-1

1

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-11

Sep-11

1,3001,4001,5001,6001,7001,8001,9002,0002,1002,200

Sep-10

Oct-10

Nov-10

Dec-10

Jan-1

1

Feb-11

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-11

Sep-11

Summary


Sector Personal & Household Goods Sector Real Estate

Sector Retail & Distribution Sector Technology

Sector Telecom Sector Travel & Tourism

Sector Utilities

700

800

900

1,000

1,100

1,200

Sep-10

Oct-10

Nov-10

Dec-10

Jan-1

1

Feb-1

1

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-11

Sep-11

600650700750800850900950

1,0001,050

Sep-10

Oct-10

Nov-10

Dec-10

Jan-1

1

Feb-11

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-11

Sep-11

7,000

8,000

9,000

10,000

11,000

12,000

Sep-

10

Oct

-10

Nov

-10

Dec

-10

Jan-

11

Feb-

11

Mar

-11

Apr

-11

May

-11

Jun-

11

Jul-1

1

Aug-

11

Sep-

11

1,2001,3001,4001,5001,6001,7001,8001,9002,0002,100

Sep-10

Oct-10

Nov-10

Dec-10

Jan-1

1

Feb-11

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-11

Sep-11

1,150

1,250

1,350

1,450

1,550

1,650

1,750

1,850

Sep-10

Oct-10

Nov-10

Dec-10

Jan-1

1

Feb-1

1

Mar-11

Apr-11

May-11

Jun-1

1Ju

l-11

Aug-11

Sep-11

350400450500550600650700750800850

Sep-10

Oct-10

Nov-10

Dec-1

0

Jan-1

1

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-1

1

Aug-11

Sep-11

7,0007,5008,0008,5009,0009,500

10,00010,50011,000

Sep

-10

Oct

-10

Nov

-10

Dec

-10

Jan-

11

Feb-

11

Mar

-11

Apr

-11

May

-11

Jun-

11

Jul-1

1

Aug

-11

Sep

-11

Source: Factset, Erste Group Research Based on Erste Group Research Sector Aggregates. Prices for aggregates are based on d/d performance for each individual stock within the respective aggregate, which are then weighted by market capitalization to form a weighted average. For composition of aggregate see sector part of this report.

Summary


2Q Reporting Summary Country Company Sector 2Q 2011* Outlook

Austria Agrana FOOD & BEVERAGEAMAG BASIC RESOURCESAndritz INDUSTRIAL GOODS & SERVICES + confirmedAT&S TECHNOLOGYaustriamicrosystems TECHNOLOGYAustrian Post MEDIA + improvedBW T PERSONAL & HOUSEHOLD GOODS = confirmedCA IMMO FINANCIAL SERVICESCAToil OIL & GAS = weakerconwert FINANCIAL SERVICES = confirmedDO & CO TRAVEL & LEISUREImmofinanz FINANCIAL SERVICESIntercell HEALTH CARE + confirmedKapsch TrafficCom TECHNOLOGYLenzing CHEMICALS + improvedMayr-Melnhof BASIC RESOURCESOMV OIL & GAS - weakerPalfinger INDUSTRIAL GOODS & SERVICES + confirmedPolytec AUTOMOBILES & PARTS + confirmedRaiffeisen Bank International BANKS + confirmedRHI BASIC RESOURCESS Immo FINANCIAL SERVICES = confirmedSBO OIL & GAS = confirmedSemperit CHEMICALS + confirmedSTRABAG CONSTRUCTION & MATERIALTelekom Austria TELECOMMUNICATIONS + weakerUniqa INSURANCE - weakerVerbund UTILITIES - confirmedVienna Insurance Group INSURANCE = confirmedVienna Int. Airport TRAVEL & LEISUREvoestalpine BASIC RESOURCESWienerberger CONSTRUCTION & MATERIALWolford PERSONAL & HOUSEHOLD GOODS - confirmedZumtobel INDUSTRIAL GOODS & SERVICES

Croatia Atlantic Grupa FOOD & BEVERAGE = confirmedAtlantska plovidba INDUSTRIAL GOODS & SERVICES + confirmedEricsson Nikola Tesla TECHNOLOGYINA OIL & GASInstitut IGH CONSTRUCTION & MATERIAL = confirmedPodravka FOOD & BEVERAGE = n.a.T-Hrvatski Telekom TELECOMMUNICATIONS + weaker

Czech Republic CEZ UTILITIESCME MEDIA = confirmedFortuna Entertainment TRAVEL & LEISURE - confirmedKomercni banka BANKS - weakerNew World Resources BASIC RESOURCES = weakerOrco FINANCIAL SERVICES = confirmedPegas NW CHEMICALS - confirmedPhilip Morris CR PERSONAL & HOUSEHOLD GOODSTelefónica O2 CR TELECOMMUNICATIONS = confirmedUnipetrol OIL & GAS

Hungary Allami Nyomda MEDIA + ConfirmedDanubius Hotels TRAVEL & LEISURE - ConfirmedE-Star INDUSTRIAL GOODS & SERVICES - ConfirmedEgis HEALTH CARE = confirmedFHB BANKS + WeakerMagyar Telekom TELECOMMUNICATIONS + confirmedMOL OIL & GAS = ConfirmedOTP BANKS + ConfirmedPannErgy CHEMICALS = ConfirmedRichter Gedeon HEALTH CARE = confirmed

Summary


2Q Reporting Summary Poland ACE AUTOMOBILES & PARTS

Action SA RETAIL + confirmedAgora MEDIA + confirmedAmRest TRAVEL & LEISUREApator UTILITIES = confirmedAsseco Poland TECHNOLOGYBank Pekao BANKS + confirmedBerling CONSTRUCTION & MATERIAL + confirmedBioton HEALTH CARE - n.a.BRE Bank BANKS = confirmedBZ WBK BANKS + confirmedCersanit CONSTRUCTION & MATERIALCiech S.A. CHEMICALSCinema City MEDIACNG CONSTRUCTION & MATERIALColian (Jutrzenka) FOOD & BEVERAGE - weakerComArch TECHNOLOGY - weakerCyfrowy Polsat MEDIA + confirmedEmperia Holding RETAILEmpik RETAILEurocash RETAIL - confirmedFarmacol HEALTH CARE - weakerFX Energy OIL & GASGTC FINANCIAL SERVICES - weakerInter Cars AUTOMOBILES & PARTSKGHM BASIC RESOURCES = weakerKulczyk Oil Ventures OIL & GAS = confirmedLotos Group OIL & GASLPP RETAILMostostal Warszawa CONSTRUCTION & MATERIAL + confirmedMultimedia Polska MEDIANeuca HEALTH CARE + confirmedNG2 RETAIL + confirmedPBG S.A. CONSTRUCTION & MATERIAL = weakerPGE UTILITIES + confirmedPGF HEALTH CARE - weakerPKN Orlen OIL & GAS - weakerPKO BP BANKS = confirmedPolimex CONSTRUCTION & MATERIAL = weakerPZU INSURANCE + confirmedRafako INDUSTRIAL GOODS & SERVICES = confirmedSygnity TECHNOLOGYSynthos CHEMICALSTauron Polska Energia UTILITIES = confirmedTPSA TELECOMMUNICATIONS - confirmedTrakcja Polska CONSTRUCTION & MATERIAL = weakerTVN MEDIA - confirmedVistula Group RETAILZA Pulawy S.A. CHEMICALSZCh Police S.A. CHEMICALS

Romania Albalact FOOD & BEVERAGE - weakerAntibiot ice HEALTH CARE - confirmedBanca Transilvania BANKS - confirmedBiofarm HEALTH CARE = confirmedBRD-Group SG BANKS + improvedPetrom OIL & GAS + confirmedTeraplast CONSTRUCTION & MATERIAL - weakerTranselectrica UTILITIES = confirmedTransgaz UTILITIES = improved

Summary


2Q Reporting Summary Serbia Aik Banka AD BANKS - weaker

Komercijalna Banka BANKS + improvedSojaprotein AD FOOD & BEVERAGE = confirmedUTILITIES

Slovenia Gorenje PERSONAL & HOUSEHOLD GOODS = confirmedKrka HEALTH CARE = confirmedTelekom Slovenije TELECOMMUNICATIONS + confirmed

Turkey Akbank BANKSAkcansa CONSTRUCTION & MATERIAL = confirmedAksigorta INSURANCEAlbaraka Turk BANKSAnadolu Hayat INSURANCEAnadolu Sigorta INSURANCEArcelik PERSONAL & HOUSEHOLD GOODSAselsan INDUSTRIAL GOODS & SERVICESAygaz OIL & GAS - weakerBagfas CHEMICALS + improvedBank Asya BANKSBIM RETAILCimsa CONSTRUCTION & MATERIAL + confirmedEge Gubre CHEMICALS - confirmedEmlak Konut REIT FINANCIAL SERVICESFord Otosan AUTOMOBILES & PARTSGaranti Bank BANKSGubre Fabrikalari CHEMICALSGunes Sigorta INSURANCEHalkbank BANKSIsbank BANKSPark Elektrik BASIC RESOURCESPetkim CHEMICALS - weakerSekerbank BANKSSinpas REIT FINANCIAL SERVICESTofas AUTOMOBILES & PARTSTupras OIL & GAS + confirmedTurcas Petrol AS OIL & GAS - weakerTurk Ekonomi Bank BANKSTurk Telekomunikasyon AS TELECOMMUNICATIONS - improvedTurkcell Iletisim Hizmetleri AS TELECOMMUNICATIONS - confirmedTurkish Airlines TRAVEL & LEISURETurkiye Sinai Kalkinma Bankasi BANKSVakifbank BANKSVestel PERSONAL & HOUSEHOLD GOODSYapi Kredi Bank BANKSYapi Kredi Sigorta INSURANCE

Ukraine Astarta Holding NV FOOD & BEVERAGE

*signs indicate below/in-line/above expectationsSource: Company data, Erste Group Research

Macroeconomy


Real EconomyGDP growth (%) 2009 2010f 2011f 2012f Ind. production growth (%) 2009 2010f 2011f 2012fAustria -3.9 2.1 3.0 1.8 Austria -14.0 6.9 8.5 4.5Croatia -6.0 -1.2 1.0 2.2 Croatia -9.2 -1.5 2.0 4.0Czech Republic -4.0 2.2 2.3 2.5 Czech Republic -14.7 10.1 8.6 5.8Hungary -6.7 1.2 2.0 2.2 Hungary -17.7 10.5 6.0 6.4Poland 1.7 3.8 4.2 3.9 Poland -3.6 6.1 6.8 7.2Romania -7.1 -1.3 2.0 3.9 Romania -5.5 5.5 4.5 3.8Turkey -4.8 8.9 6.5 4.5 Turkey -9.9 13.1 8.0 6.5Serbia -3.5 1.0 3.0 3.6 Serbia -12.1 2.9 4.8 6.0Ukraine -14.8 4.2 4.5 6.0 Ukraine -21.9 11.0 9.0 11.0

C/A (% of GDP) 2009 2010f 2011f 2012f CPI (%) 2009 2010f 2011f 2012fAustria 3.1 2.7 3.2 3.5 Austria 0.5 1.9 3.2 2.6Croatia -5.5 -1.1 -2.5 -3.3 Croatia 2.4 1.1 2.8 3.2Czech Republic -3.2 -3.8 -3.7 -3.4 Czech Republic 1.1 1.5 2.1 3.0Hungary 0.4 2.0 2.1 1.6 Hungary 4.2 4.9 3.8 3.0Poland -2.1 -3.4 -4.4 -4.8 Poland 3.5 2.6 4.3 2.7Romania -4.2 -4.1 -4.3 -4.4 Romania 5.6 6.1 6.3 4.0Serbia -7.2 -7.2 -7.7 -8.1 Serbia 8.4 6.1 11.4 5.7Turkey -2.3 -6.6 -9.5 -8.0 Turkey 6.3 8.6 5.6 7.8Ukraine -1.7 -1.9 -2.2 -3.0 Ukraine 16.2 9.4 10.4 9.5

Given the downward revision of US GDP growth and the disappointing 2Q GDP data for large European economies (the French economy stagnated and the German economy decelerated sharply in 2Q), sentiment is very bearish and some doomsayers are starting to forecast recession. The flash estimates of 2Q GDP growth surprised on the downside in Hungary, Romania and Croatia, while staying more neutral for the Czech Republic and Slovakia. We have already incorporated bearish flash estimates into our forecasts and revised the GDP growth for the Euro Area down to 1.4% (from 1.8%) for 2012, and for some CEE countries lowering about 0.3pp-1.0pp, resulting in average growth of 3.3% for CEE8 next year. The last country in the region to release its 2Q GDP data was Poland. Polish 2Q GDP growth surprised on the upper side (4.3%). The slowdown of industrial output and a strong deterioration of the economic sentiment during the recent turmoil point to further downward risks for our forecasts. However, we are still far away from projecting a global recession, unless market uncertainty feeds into another global financial crisis.

The summer months brought a reversal of inflation development in many CEE countries. We had expected that inflation would start to moderate (due to a base effect) in the second half. However, given the recent fall of commodity prices and increased concerns about the economic prospects, the dampened consumer confidence should send inflation even further south. That is why some central banks have completely changed their wording from hawkish to dovish and markets discarded their forecasts, which counted with several rate hikes in the near future (especially in Poland and the Czech Republic). Currently, we do not expect any change in rates in CEE this year, while the Czech National Bank should be the first one to start to hike (‘normalize’) rates in the region next year. However, this is conditional on the ECB monetary policy and the level of the Czech koruna. The too-strong koruna should take any discussion of rate hikes off the table for now. Despite the very solid performance of the Polish economy, we see limited room for monetary tightening this year. Monetary tightening should be substituted with tightening on the fiscal side, which would become more likely only after the general elections scheduled for October 9.

Macroeconomy


Real GDP growth (y/y) CPI (y/y)

Sources: Central statistical offices. Ifo’s business sentiment index (right scale).

Retail sales (y/y) Industrial production (y/y)

The summer months brought a reversal of inflation development in many CEE countries. We had expected that inflation would start to moderate (due to a base effect) in the second half. However, given the recent fall of commodity prices and increased concerns about the economic prospects, the dampened consumer confidence should send inflation even further south. That is why some central banks have completely changed their wording from hawkish to dovish and markets discarded their forecasts, which counted with several rate hikes in the near future (especially in Poland and the Czech Republic). Currently, we do not expect any change in rates in CEE this year, while the Czech National Bank should be the first one to start to hike (‘normalize’) rates in the region next year. However, this is conditional on the ECB monetary policy and the level of the Czech koruna. The too-strong koruna should take any discussion of rate hikes off the table for now. Despite the very solid performance of the Polish economy, we see limited room for monetary tightening this year. Monetary tightening should be substituted with tightening on the fiscal side, which would become more likely only after the general elections scheduled for October 9.

-10

-8

-6

-4

-2

0

2

4

6

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010

Q4

2010

Q1

2011

Czech Republic HungaryPoland Romania

0

1

2

3

4

5

6

7

8

9

Mar

-10

Apr

-10

May

-10

Jun-

10

Jul-1

0

Aug

-10

Sep

-10

Oct

-10

Nov

-10

Dec

-10

Jan-

11

Feb-

11

Mar

-11

Apr

-11

May

-11

Jun-

11

Jul-1

1


-10

-5

0

5

10

15

20

Mar

-10

Apr

-10

May

-10

Jun-

10

Jul-1

0

Aug

-10

Sep

-10

Oct

-10

Nov

-10

Dec

-10

Jan-

11

Feb-

11

Mar

-11

Apr

-11

May

-11

Jun-

11

Jul-1

1

Poland Czech RepublicHungary Romania

-3

2

7

12

17

22M

ar-1

0

Apr

-10

May

-10

Jun-

10

Jul-1

0

Aug-

10

Sep

-10

Oct

-10

Nov

-10

Dec

-10

Jan-

11

Feb-

11

Mar

-11

Apr

-11

May

-11

Jun-

11

Jul-1

1


Macroeconomy


Interest Rates & Currencies Currency/EUR (avg.) 2009 2010f 2011f 2012f Currency/USD (avg.) 2009 2010f 2011f 2012fCroatia 7.34 7.28 7.39 7.37 Austria 1.41 1.30 1.30 1.22Czech Republic 26.4 25.3 24.2 23.7 Croatia 5.30 5.50 5.20 5.46Hungary 281 275 270 266 Czech Republic 19.0 19.1 17.0 17.0Poland 4.30 4.00 3.93 3.70 Hungary 202 208 191 194Romania 4.24 4.21 4.17 4.10 Poland 3.10 3.03 2.76 2.66Serbia 94.0 103.1 102.0 105.0 Romania 3.05 3.18 2.94 3.04Turkey 2.16 1.99 2.30 2.32 Turkey 1.55 1.50 1.63 1.72Ukraine 11.34 10.51 10.3 9.6 Serbia 67.5 77.9 71.8 77.8

Ukraine 8.07 7.95 7.95 7.80

3M interest rate (%) 2009 2010f 2011f 2012f 10Y interest rate (%) 2009 2010f 2011f 2012fAustria 1.2 0.8 1.2 2.0 Austria 3.30 2.90 2.90 3.60Croatia 8.9 2.4 2.1 3.0 Croatia 7.86 6.40 6.10 6.10Czech Republic 2.2 1.3 1.4 1.9 Czech Republic 4.75 3.87 4.00 4.10Hungary 8.6 5.5 6.1 5.7 Hungary 9.12 7.30 7.30 6.80Poland 4.3 3.8 4.5 5.0 Poland 5.40 5.40 5.55 5.75Romania 11.7 6.8 5.8 6.4Serbia 14.4 10.8 12.4 9.8Ukraine 18.0 7.7 4.3 5.5

The sovereign debt crisis and increased risk aversion had a negative effect on CDS, which widened not only in the Euro Area peripheral countries, but affected all sovereigns. Hungarian and Croatian CDS topped through 420bp (110bp m/m), while for other CEE countries they increased about 50bp, on average. The only outlier in CEE was the Czech Republic (CDS increased less than 20bp m/m), which is becoming increasingly recognized as a safe haven sovereign. Czech 10Y bonds rallied -40bp after the rating upgrade of two notches by S&P. Currently, the Czech Republic (AA-) is the highest-rated non-Eurozone CEE country, neck and neck with Estonia (AA-), Slovakia (A+, could be upgraded soon) and Slovenia (AA). We have been arguing for a long time that rating agencies have been lagging behind the markets, which have favored fundamentally better CEE countries over some highly indebted Euro Area countries. As the uncertainty about the global economic outlook and its impact on the speed of fiscal consolidation prevail, rating agencies might be hesitant to proceed with further upgrades of CEE countries (or even take back some downgrades), unless hard figures or discussions on budgets surprise on the positive side.

Macroeconomy


Exchange Rates & Interest Rates

100

120

140

160

180

200

220

240

260

280

300

Aug Sep Oct Nov Dec Jan Feb Mar May Jun Jul Aug0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

HUF/EURHUF/USD3m interbank rate, r.s.

Hungary

2.0

2.5

3.0

3.5

4.0

4.5


2.5

3.0

3.5

4.0

4.5

5.0

PLN/EURPLN/USD3m interbank rate, r.s.

Poland

10

12

14

16

18

20

22

24

26

28


1.14

1.16

1.18

1.20

1.22

1.24

1.26

CZK/EURCZK/USD3m interbank rate, r.s.

Czech Republic

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

HRK/EURHRK/USD

Croatia

Source: Bloomberg

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2.8


5.0

6.0

7.0

8.0

9.0

10.0

TRY/EURTRY/USD3m interbank rate, r.s.

Turkey

Sector Insight Automobiles & Parts


– Polytec’s Buy recommendation confirmed; new target price: EUR 13.5 – Ford Otosan TRY 189mn net profit for 2Q11 in line with expectations – Tofas TRY 130mn net profit for 2Q11 better than expected

On the back of Polytec’s recent PPI acquisition, we have raised our EPS estimates for 2012 and 2013 by around 2%. We also raised our target price slightly, to EUR 13.5, from EUR 13.1, and have confirmed our Buy recommendation. Overall, Polytec’s 2Q11 results were slightly above our expectations. EBIT was boosted by EUR 7.2mn, due to the disposal of the Interior segment. Management confirmed its FY11 guidance, which is in line with our estimates. Thanks to a very strong operating cash flow (EUR 28.6mn), as well as the disposal of the Interior segment, Polytec now has over a EUR 3mn net cash position (even after the deduction of EUR 17mn in personnel provisions). Polytec acquired the PPI injection molding plant in order to further expand its molding capacity. PPI is located in Ebensee (Austria) and thus has geographic proximity to the most important automotive hubs, such as Ingolstadt, Györ, Bratislava and Munich. PPI has annual sales of EUR 26mn and management intends to grow future sales by at least 10% pa. Shares of Polytec continue to trade at significant discounts of 10.9-44.6%, depending on the year and multiple applied.

Turkish auto sector: Drop in domestic auto sales in July, further drop in demand expected. According to the Automotive Distributors' Association, Turkey's domestic auto sales (passenger car and light commercial vehicle sales) increased only 2.6% y/y to 62,907 in July 2011. Passenger car sales were up 5.1% y/y to 43,518. LCV sales declined 2.8% y/y to 19,389 units. The YTD figure came in at 483,950 units, a 42.5% y/y increase. According to the Authorized Automotive Dealers Association, automotive demand will be around 52k vehicles in August, implying a 15% y/y contraction, mainly due to global economic uncertainty, delays in launches of new-year models and lower consumer appetite to spend during Ramadan in August. July and August are seasonally weak months in the automotive sector and automotive demand rises in September, thanks to launches of new-year models, and is also strong in December, due to year-end sales campaigns. We expect the slowdown in domestic auto demand to continue in the coming months, on the back of a base effect and the expected slowdown of the economy.

Ford Otosan reported TRY 188.8mn net profit for 2Q11 (up 51% y/y, up 32% q/q), in line with the consensus estimate of TRY 199mn. The company increased its revenues 47% y/y to TRY 2,765mn (consensus: TRY 2,734mn) in 2Q11, thanks to strong domestic market sales and the strong EUR against the TRY. EBITDA increased 25% y/y to TRY 239mn (consensus: TRY 277mn) and the EBITDA margin improved 0.2pp to 8.6%. Although the operating margin is lower than expected, due mainly to high raw material costs, the net profit figure is in line with the consensus estimate.

Tofas reported TRY 130mn net profit for 2Q11 (up 77% y/y, 58% q/q), higher than the consensus estimate of TRY 115mn. The company increased its unit sales 11.4% y/y to 91k and its revenues 30% y/y to TRY 2,050mn (consensus: TRY 2,017mn) in 2Q11. Domestic unit sales jumped 26%, while exports increased only 1%, due mainly to weak demand in southern European markets. EBITDA rose 26% y/y to TRY 217mn and the EBITDA margin slightly declined, by 0.3pp to 10.6%. While the top line was in line with the consensus, the operating profitability and net profit figures beat expectations.

Tofas has been awarded the Turkish distributorship of Chrysler, Jeep and Dodge branded vehicles as of January 2012. According to the arrangement, Tofas is to distribute these vehicles along with their spare parts, in addition to providing after-sales services. Fiat has a global alliance with Chrysler Group. Fiat bought a 20% stake in Chrysler in 2009 and increased its ownership to 53.5% in 2Q11. Within the scope of this alliance, Chrysler Group plans to launch the Fiat Ducato and Doblo under the Ram brand in the US market in 2012. Doblo is an LCV model of Fiat and manufactured by Tofas in Turkey. Also, Tofas plans to import the 4x4 Fiat Freemont (formerly named Dodge Journey) from Mexico in 2012. Note that, as the above-mentioned brands have only a 0.2% share of the Turkish passenger car market as of 7M11, we do not expect a major positive impact on financials. However, we believe that Tofas might be a beneficiary of this alliance on the export side.

Dogus Otomotiv reported TRY 58.3mn net profit for 2Q11 (up 31% y/y, up 241% q/q), higher than the consensus estimate of TRY 50mn. Recall that the company recorded a TRY 25.4mn provision in its 1Q11 financials for a total TRY 49.8mn fine declared by the Competition Authority. The company increased its unit sales 43% y/y (-16% q/q) to 23k and increased its revenues 55% y/y (+14% q/q) to TRY 1,295mn (consensus: TRY 1,288mn) in 2Q11. EBITDA rose 44% y/y and 8% q/q to TRY 89mn (consensus: TRY 79mn) and the EBITDA margin declined 0.5pp y/y and 0.3pp q/q to 6.9% (consensus: 6.1%). Net profit is higher than the consensus estimate, mainly due to better than expected operational performance.



Company Curr. Mcap (EURmn) 2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 1M 3M 6M 12M

ACE EUR 33 6.7% 8.7% 10.5% 11.5% 10.8% 10.5% 10.8% 10.5% -19.7% -24.8% -37.9% -40.2%Ford Otosan TRY 1,625 24.6% 24.2% 25.1% 27.6% 10.3% 10.4% 10.4% 10.4% -17.2% -25.2% -22.1% -23.9%Inter Cars PLN 280 12.1% 12.2% 12.4% 12.7% 6.1% 5.6% 5.6% 5.5% -10.0% -15.1% 3.4% 11.0%Tofas TRY 1,146 25.9% 22.6% 21.8% 19.0% 10.3% 9.9% 9.8% 9.7% -22.0% -33.1% -30.8% -29.5%Polytec EUR 147 35.4% 31.9% 22.6% 20.4% 7.1% 10.8% 10.8% 10.9% -19.5% -18.6% 12.8% 77.1%Median - - 18% 17% 17% 16% 10% 10% 10% 10% - - - -Median Autos developed - 329,467 10.9% 9.6% 12.0% 12.3% 10.0% 9.9% 10.5% 11.3% - - - -Median Autos emerging - 34,605 22.0% 21.4% 20.6% 20.3% 13.4% 12.7% 12.8% 12.1% - - - -Median Parts - 14,099 13.7% 16.1% 18.2% 18.8% 11.9% 12.4% 12.7% 12.4% - - - -Median Total - 378,171 13.7% 15.4% 15.6% 15.5% 14.8% 16.3% 16.9% 16.8% - - - -EuroStoxx Basic Resources 236,718 12.8% 14.1% 14.6% 14.5% 12% 13% 13% 13% -20.2% -19.1% -18.8% 6.9%CEE to Peer, Prem/Disc - 34% 13% 10% 3% -31% -38% -40% -40% - - - -

ROE EBITDA margin Performance (EUR terms)

2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eACE 19.0 9.4 7.2 6.1 6.2 3.5 3.1 2.8 1.2 0.8 0.7 0.7Ford Otosan 8.1 8.2 8.3 7.2 5.1 5.3 5.3 4.4 1.9 2.1 2.0 1.9Inter Cars 17.3 15.4 14.1 13.2 11.3 10.5 10.0 9.4 1.9 1.8 1.7 1.7Tofas 10.0 6.3 6.2 6.3 6.0 3.7 3.8 3.8 2.3 1.5 1.3 1.1Polytec 4.1 4.7 5.2 5.0 2.1 3.2 3.2 3.1 1.2 1.3 1.1 1.0Median CEE 13.7 8.8 7.8 6.8 6.1 4.5 4.5 4.1 1.9 1.6 1.5 1.4Median Autos developed 10.6 9.8 7.6 6.4 5.1 5.1 4.7 3.9 1.2 1.1 1.0 0.9Median Autos emerging 14.7 14.0 12.2 10.9 10.6 10.8 8.7 7.6 3.5 2.9 2.4 2.0Median Parts 17.4 9.7 7.9 6.9 6.5 5.2 4.6 4.5 2.0 1.8 1.5 1.3Median Total 13.7 11.0 8.6 7.7 6.0 5.3 4.8 4.5 1.8 1.6 1.3 1.2EuroStoxx Basic Resources 13.0 9.7 7.5 6.7 5.7 4.9 4.6 3.9 1.5 1.4 1.2 1.1CEE to Peer, Prem/Disc 0% -20% -10% -12% 1% -16% -6% -8% 4% 2% 10% 19%

2010 2011e 2012e 2013e 2010 2011e 2012e 2013eACE 0.6 0.3 0.3 0.2 5.4 3.2 2.8 2.3Ford Otosan 0.5 0.5 0.5 0.5 4.9 5.2 5.3 4.3Inter Cars 0.6 0.6 0.5 0.5 10.6 9.9 9.6 9.3Tofas 0.7 0.4 0.4 0.4 6.8 4.5 4.2 3.7Polytec 0.2 0.2 0.3 0.3 2.9 2.3 2.7 2.3Median CEE 0.6 0.5 0.5 0.4 6.1 4.8 4.7 4.0Median Autos developed 0.4 0.3 0.3 0.2 3.9 3.3 2.7 2.3Median Autos emerging 1.5 1.2 1.0 1.0 11.1 8.9 7.6 6.5Median Parts 0.7 0.5 0.5 0.4 5.8 5.0 4.1 3.5Median Total 0.6 0.5 0.5 0.4 5.8 4.0 3.5 3.4EuroStoxx Basic Resources 0.5 0.5 0.4 0.4 4.2 3.4 2.9 2.5CEE to Peer, Prem/Disc 0% -8% 4% -1% 5% 22% 36% 21%

P/E P/CE P/BV

EV/Sales EV/EBITDA

Source: JCF Quant, Erste Group Research



ACE Buy Target price PLN 12.2Price (PLN) 6.4 ROCE 2010 5.9% 10p 11e 12e 13eMcap (PLN mn) 33 ROE 2010 6.7% Sales (EUR mn) 86.3 103.5 110.9 122.7Mcap (EUR mn) 33 Net debt (EURmn, 10) 2.7 EBITDA margin 10.85% 10.52% 10.84% 10.53%Free float (%) 88.6% Gearing (2010) 7% EBIT margin 4.07% 4.80% 5.26% 5.42%Free float (EUR mn) 29 Sales CAGR 10-13e 12.3% Net profit margin 2.94% 3.35% 4.06% 4.34%Shares outst. (mn) 21.2 EPS CAGR 10-13e 28.8% EPS (EUR) 0.12 0.16 0.21 0.25

Dividend/share (EUR) 0.05 0.05 0.06 0.07EV/sales 0.59 0.34 0.31 0.24EV/EBITDA 5.44 3.22 2.83 2.26P/E 18.99 9.42 7.25 6.12P/CE 6.23 3.50 3.05 2.81P/BV 1.24 0.79 0.74 0.68Dividend yield 2.20% 3.51% 3.71% 4.83%EV/EBITDA rel. 0.8 0.7 0.7 0.5P/E rel. 1.7 1.4 1.2 1.1

Performance 1M 3M 6M 12MAbsolute (PLN terms) -16.6% -21.1% -35.1% -37.4%Rel. to sector (EUR, ppt) -3.4 -2.5 -22.3 -37.0Rel. to universe (EUR, ppt) -9.8 -10.0 -26.7 -34.0

Ford Otosan Under review Target price TRYPrice (TRY) 11.4 ROCE 2010 20.5% 10e 11e 12e 13eMcap (TRY mn) 4,000 ROE 2010 24.6% Sales (p mn) 6,376.8 6,816.1 7,456.9 8,883.1Mcap (EUR mn) 1,625 Net debt (EURmn, 10) 3.9 EBITDA margin 10.34% 10.39% 10.39% 10.39%Free float (%) 18.0% Gearing (2010) 0% EBIT margin 6.86% 6.86% 6.86% 6.86%Free float (EUR mn) 293 Sales CAGR 10-13e 12.4% Net profit margin 6.29% 6.56% 6.45% 6.26%Shares outst. (mn) 350.9 EPS CAGR 10-13e 13.7% EPS (p) 1.14 1.27 1.37 1.59

Dividend/share (p) 1.03 1.15 1.23 0.00EV/sales 0.51 0.54 0.55 0.45EV/EBITDA 4.94 5.22 5.25 4.35P/E 8.09 8.24 8.32 7.19P/CE 5.12 5.25 5.26 4.44P/BV 1.87 2.13 2.05 1.92Dividend yield 11.12% 10.92% 10.81% 0.00%EV/EBITDA rel. 0.7 1.2 1.3 1.0P/E rel. 0.7 1.2 1.4 1.3

Performance 1M 3M 6M 12MAbsolute (TRY terms) -14.9% -19.7% -14.0% -3.4%Rel. to sector (EUR, ppt) -0.8 -2.9 -6.6 -20.7Rel. to universe (EUR, ppt) -7.3 -10.3 -10.9 -17.7

Inter Cars Reduce Target price PLN 64.5Price (PLN) 82.0 ROCE 2010 9.7% 10e 11e 12e 13eMcap (PLN mn) 1,162 ROE 2010 12.1% Sales (PLN mn) 2,402.3 2,690.4 2,939.3 3,180.2Mcap (EUR mn) 280 Net debt (EURmn, 10) 108.7 EBITDA margin 6.05% 5.65% 5.60% 5.50%Free float (%) 56.4% Gearing (2010) 77% EBIT margin 4.64% 4.40% 4.45% 4.37%Free float (EUR mn) 158 Sales CAGR 10-13e 11.4% Net profit margin 2.65% 2.65% 2.78% 2.73%Shares outst. (mn) 14.2 EPS CAGR 10-13e 6% EPS (PLN) 4.55 5.09 5.82 6.20

Dividend/share (PLN) 0.00 0.00 0.00 0.00EV/sales 0.64 0.56 0.54 0.51EV/EBITDA 10.58 9.91 9.59 9.26P/E 17.32 15.44 14.08 13.22P/CE 11.31 10.52 9.95 9.35P/BV 1.95 1.81 1.69 1.68Dividend yield 0.00% 0.00% 0.00% 0.00%EV/EBITDA rel. 1.6 2.2 2.5 2.1P/E rel. 1.6 2.3 2.3 2.4

Performance 1M 3M 6M 12MAbsolute (PLN terms) -6.5% -10.9% 8.2% 16.3%Rel. to sector (EUR, ppt) 6.4 7.2 19.0 14.3Rel. to universe (EUR, ppt) -0.1 -0.2 14.6 17.3

52 weeks

56789

10111213141516

ACEWIG (Rebased)DJ EURO STOXX Automobiles & Parts (Rebased)

52 weeks

5560

657075

8085

9095

Inter Cars WIG 20 (Rebased) DJ EURO STOXX Retail (Rebased)

52 w e eks

91 01 11 21 31 41 51 61 71 8

F ord Oto sa nIS E 10 0 (Re bas ed)DJ EURO STOX X Auto mo biles & Pa rts (R eba sed)



Tofas Under review Target price TRY Price (TRY) 5.6 ROCE 2010 15.5% 10e 11e 12e 13eMcap (TRY mn) 2,820 ROE 2010 25.9% Sales (TRY mn) 6,410.2 6,831.1 7,411.2 7,825.8Mcap (EUR mn) 1,146 Net debt (EURmn, 10) 318.1 EBITDA margin 10.3% 9.9% 9.8% 9.7%Free f loat (%) 24.3% Gearing (2010) 38% EBIT margin 6.1% 5.9% 6.0% 6.0%Free f loat (EUR mn) 278 Sales CAGR 10-13e 11.3% Net profit margin 6.0% 6.1% 6.1% 5.7%Shares outst. (mn) 500.0 EPS CAGR 10-13e 5% EPS (TRY) 0.77 0.83 0.90 0.89

Dividend/share (TRY) 0.30 0.33 0.36 0.00EV/sales 0.70 0.44 0.41 0.36EV/EBITDA 6.81 4.45 4.22 3.74P/E 10.02 6.29 6.24 6.33P/CE 5.97 3.73 3.84 3.82P/BV 2.33 1.46 1.27 1.14Dividend yield 3.90% 6.36% 6.41% 0.00%EV/EBITDA rel. 1.0 1.0 1.1 0.9P/E rel. 0.9 0.9 1.0 1.1


Polytec Buy Target price EUR 13.5Price (EUR) 6.6 ROCE 2010 20.7% 10 6831.1105 7411.168 7825.803Mcap (EUR mn) 147 ROE 2010 35.4% Sales (EUR mn) 770.1 625.1 516.9 535.7Mcap (EUR mn) 147 Net debt (EURmn, 10) 50.4 EBITDA margin 7.1% 10.8% 10.8% 10.9%Free f loat (%) 43.6% Gearing (2010) 58% EBIT margin 3.6% 7.2% 7.5% 7.5%Free f loat (EUR mn) 64 Sales CAGR 10-13e -3.1% Net profit margin 3.4% 5.2% 5.6% 5.6%Shares outst. (mn) 22.3 EPS CAGR 10-13e - EPS (EUR) 1.12 1.42 1.26 1.31


Performance 1M 3M 6M 12MAbsolute (EUR terms) -19.5% -18.6% 12.8% 77.1%Rel. to sector (EUR, ppt) -3.2 3.7 28.4 80.3Rel. to universe (EUR, ppt) -9.6 -3.8 24.0 83.4


52 weeks

5,05,56,06,57,07,58,08,59,09,5

TofasISE 100 (Rebased)DJ EURO STOXX Automobiles & Parts (Rebased)

52 weeks

3

4

5

6

7

8

9

Polytec ATX (Rebased) DJ STO XX Automobiles & Parts (Rebased)

Sector Insight Banks


CEE banks – Polish and Hungarian banks’ 2Q11 results above expectations – Romanian and Serbian banks were mixed – Highlight in 2Q11 was RBI, with better than expected results, on trading and lower provisions – Asset quality should further improve in core CE, but weaken further in SEE and Hungary – Outlook: Slowing economies, strong Swiss franc, euro debt crisis and capitalization – Top picks: Raiffeisen Bank International (Buy), OTP, PKO BP, BRD GSG (Accumulate) – New regulations for Turkish banks to curb loan demand - slowdown persists in consumer lending

Strong 2Q11 results, with accelerating annual profit growth. For the CEE banking industry, the 2Q11 reporting season was again a positive one. From the twelve banks we cover, we got seven better than expected results (RBI, FHB, OTP, Pekao, BZ WBK, BRD GSG and Komercijalna Banka), two in lines (BRE Bank and PKO BP) and three banks reported worse than expected figures (Komercni banka, Banca Transilvania and AIK Banka). In general, the financial outlook 2011e was confirmed for the CEE banking sector. On an aggregated basis, the banks’ pre-tax profit in 2Q11 increased by 40% y/y and 10% q/q. The strong acceleration of the annual growth rate (vs. 4% y/y in 1Q11) was mainly due to the very weak, valuation loss-driven 2Q10 of RBI. Adjusted for this effect, the annual growth in 2Q11 was 22% y/y. This was mainly due to the further decelerating cost of risk (-23% y/y in 2Q11, vs. -17% y/y in 1Q11) and slightly better income growth of 6.7% y/y (vs. 1.2% y/y in 1Q11). However, the major income sources still showed slow annual growth of 4% (vs. 7% y/y in 1Q11). Operating cost inflation slightly decreased to 5%, vs. 6% in 1Q11. For the remainder of the year, we expect the economic slowdown, strong Swiss franc, euro debt crisis and banks’ capitalization to stay in focus.

AIK Banka: 2Q11 earnings far below our estimates, due to higher than expected provisions. With 2Q11 pre-tax profit of RSD 429.7mn, AIK Banka reported 48% below our estimate. The divergence from our estimates stems mainly from the 112% higher than expected provisioning level, which most likely is due to the provisioning need for the road construction company Nibens group. Further differences stem from a 7% higher than expected net interest income, as well as 76% higher than expected net trading income. Operating expenses were fully in line with our expectations, while net fee & commission income was slightly higher (+7% vs. Erste estimate). In a quarterly comparison, net interest income increased 8%, based on a q/q margin improvement of 36bp to 4.68% in 2Q11 and despite a further decline in the loan portfolio of 2% q/q. The deposit side saw the trend continue and decreased by 4% q/q. Net fee and commission income remained flat q/q, as did total operating expenses. Net provisions saw a hike of 66% compared to the previous quarter, reaching a risk-to-earnings ratio of 90% (vs. 56% in 1Q11). This leads to profit before taxes 25% lower than in 1Q11 and 60% below the 2Q10 level. In our view, AIK Banka’s results were worse than anticipated, mainly due to the significantly higher than expected net provisions. The strong increase most likely stems from the exposure to the troubled Nibens group. The banks are currently in negotiations with the government to appoint a new management team to get the company’s activities running again. Workers of the construction company are putting pressure on the government by organizing protests and blocking the construction of some Corridor X sections. Hence, the situation remains uncertain. On the basis of the new insights gained, we need to adjust our mid-term estimates as well as our stock recommendation. Hence, we put AIK Banka under review for the time being.

Banca Transilvania: 2Q11 earnings figures clearly below our forecast, but above consensus. Banca Transilvania reported RAS net profit of RON 33.9mn (+7% q/q, +97% y/y), which was 22% below our, but 9% above consensus, estimates. The main divergence from our estimates stems from 9% lower than anticipated net provisions (-18% q/q, -14% y/y); 5% lower than anticipated net F&C income (+7.4% q/q, +1% y/y); 5% higher than expected operating expenses (+6% q/q, +13% y/y). Net interest income came in 3% lower q/q, as expected, due to deterioration in net interest margin by 20bp q/q, to 4.46% in 2Q11, and despite a 6% increase in the loan portfolio. Also, deposits could be raised by 3.5% q/q. The rising loan and deposit volumes are in line with the trend we have observed at BRD GSG. Net provisions went down q/q as well as y/y, reaching a risk-to-earnings ratio of 48% (vs. 57% in 1Q11), which is the lowest since 3Q08, although still at a high level. Banca Transilvania reported below our estimates, but above consensus expectations. We regard as positive the trend of falling loan loss provisions and the increasing loan portfolio. On the other hand, net interest margin is continuously declining and we see no indication that this trend will reverse in the near future. It has to be kept in mind that these figures are



according to local GAAP (RAS) and do not provide indication for the FY IFRS figures. We stick to our Hold recommendation.

BRD GSG: 2Q11 earnings figures above expectations, on lower net provisions. BRD GSG came in with 2Q11 net profit of RON 159.3mn (+30% q/q; -5% y/y). This is 34% above our forecast and 39% above consensus estimates. The main divergence from our estimates stems from 16% lower than expected net provisions (-23% vs. consensus). On a quarterly comparison, net provisions were down 16%, leading to a risk-to-earnings ratio of 45% (vs. 56% in 1Q11). Net interest income was in line with our estimates (+4.7% q/q; +3% y/y), while net fee and commission income was 4% higher than expected (+7% q/q; 0% y/y). The sequential increase in NII is due to increasing loan volumes (+2.6% q/q), while net interest margin remained on the pre-quarter level. As net trading was slightly below our expectations, total income came in fully in line with our estimates. Operating expenses were 3% higher than anticipated. As these figures are according to local reporting standards (RAS), they do not provide substantial guidance for the FY11 IFRS figures. We stick to our Accumulate recommendation for the stock.

BRE Bank: 2Q11 in line with expectations, driven by gain from NPL sale. BRE Bank reported net profit of PLN 313mn (+152% y/y, +36% q/q) for 2Q11 which is in line with our forecasts and 7% above consensus estimates. The strong sequential improvement was mainly due to a PLN 90mn gain from the sale of a non-performing retail loan portfolio consisting of cash loans, overdrafts and credit card loans with a nominal value of PLN 622mn. The main divergence from our 2Q11 estimates came from 2.4% higher operating expenses as well as higher than expected net provisions, which were down 49% q/q on a PLN 82mn impact from the NPL sale. Excluding this effect, net provisions would have increased by 23% q/q (-31% y/y), despite a 60bp improvement of the NPL ratio to 5.0%, from 5.6% in 1Q11. The NPL coverage ratio declined to 65% from 68% in 1Q11. In our view, BRE again reported good results which were in line with our forecasts but 7% above consensus expectations. Net provisions decreased 49% q/q on the sale of an NPL portfolio, but would have increased by 23% q/q excluding this effect, despite the 60bp lower NPL ratio. Sustainable income sources were fully in line with our expectations, with good annual growth of more than 20%. Operating costs came in 2.4% higher than expected (-1.3% y/y, +5% q/q) due to higher bonus accruals. With 1H11 net profit contributing 61% to our FY11 estimates (54% excluding the one-off), we will adapt our financial model and recommendation.

BZ WBK: 2Q11 net profit above expectations, on lower provisions and better trading. BZ WBK reported a 2Q11 net profit of PLN 371mn (+37% q/q, +48% y/y), which is 21% above our expectations and 13% above consensus estimates. The main divergence from our estimates came from 25% lower than expected net provisions (-17% q/q, -46% y/y), 58% higher than expected trading result (+83% q/q, +1.1% y/y) and lower taxes (17.5% effective tax rate). The pre-tax profit was 13% higher than we had expected. Net fee & commission income and operating expenses were fully in line with our expectations, whereas net interest income came in 2.4% below our forecasts. In our view, the 2Q11 results were clearly above our expectations, mainly due to lower provisions, a higher trading result and a further decreased tax rate of only 17.5%. The sustainable income sources showed sequential and annual growth and were in line. The good news is that provisioning levels further decreased and came in lower than we had expected, with the NPL ratio down 30bp q/q to 6.7%. Operating costs (+4.5% q/q, +7.9% y/y) were fully in line with our forecasts. With 1H11 net profit contributing 55% to our FY11e forecast, we feel comfortable at the moment, taking into account that the low tax rate might not be sustainable for 2H11.

FHB: 2Q11 net profit 13% above our estimate, thanks to lower net provisions. FHB reported 2Q11 net profit of HUF 759mn (+350% q/q; -41% y/y), 13% above our estimated figure. The main divergence from our forecast stems from 51% lower than expected net provisions. We also see divergence from our estimates among the income items. Net interest income was 12% below our estimate, while net fee & commission income was 36% below our estimate. Net trading income, on the other hand, surprised on the positive side (373% above our expected figure). On the aggregate level, total income was 7% below our forecast, while total expenses came in 3% lower than anticipated. In a quarterly comparison, net interest income decreased 8% q/q, mainly driven by a 3.8% q/q decline in customer loans, as well as an 18bp q/q compression in NIM. Net fee income declined 32% q/q, as a result of seasonal movements in income from account related fees. Net provisions decreased significantly (-57% q/q), which also drove down the risk/earnings ratio to 11%, from 24% in 1Q11. The amount of non-performing loans, however, increased 9% q/q, which, in combination with the declining loan portfolio, led to a sequential increase in the NPL ratio of 150bp to 12.4% in 2Q11. FHB’s 2Q11 results came in higher than anticipated, mainly driven by lower net provisions and higher than expected net trading income. Sustainable income sources, however, were reported to be lower than expected and asset quality has continued to



deteriorate. We will update our mid-term estimates to account for the Allianz acquisition and the current business environment.

Komercijalna banka: 2Q11 results clearly beat our estimates, on improved total income. Komercijalna banka reported pre-tax profit of RSD 1,111.7mn for 2Q11, which is 45% above our estimated figure. The divergence from our estimates mainly stems from (1) 19% higher than anticipated net interest income (+17% q/q, +36% y/y), which was based on a q/q improvement of the net interest margin by 85bp to 3.95%, as well as a strong q/q loan growth of 11.6%; (2) 10% higher than anticipated net fee and commission income (+9% q/q, +20% y/y), stemming from 18bp stronger margins of 1.76%; (3) 42% higher than anticipated net provisions (+414% q/q, +4% y/y), which increased fourfold albeit from a very low level in 1Q11 and reaching a risk-to-earnings ratio of 18% (vs. 4% in 1Q11). Total operating costs were fully in line with our forecast. Opposed to the market trend, Komercijalna was able to increase its loan portfolio by a low single-digit figure compared to the previous quarter. The margins could be increased further, which is in line with what we observed at AIK Banka. Currently, 1H11 reported pre-tax profit accounts for 2/3 of our FY11 estimate. Hence, we might need to revise our mid-term estimates slightly.

Komercni banka: 2Q11 results hit by impairments for Greece. Komercni banka reported 2Q11 results which were 40% below expectations, mainly due to CZK 1.66bn impairments for Greek sovereign bonds. Net profit came in at CZK 2.1bn vs. our CZK 3.5bn expectation. The provisions for loan losses decreased 12% q/q and were 15% below our forecasts, despite the 20bp q/q higher NPL ratio of 6.4% (including SGEF acquisition). The corporate and retail risk profiles continued to be stable in 2Q11. However, the NPLs coverage was down to 55.6%, from 57.7% in 1Q11. Operating costs were 6% higher than expected (+8% q/q, +6.8% q/q adj. for SGEF acquisition) mainly due to 17% sequential growth of G&A expenses driven by marketing campaigns and staff training. Personnel expenses grew 3% q/q, due to increased salaries from 2Q11 and higher avg. number of employees (+0.5% y/y). In our view, the 2Q11 figures were significantly below our and consensus expectations, mainly due to the CZK 1.66bn impairment for Greek sovereign bonds. Excluding this effect, the bottom line would have been 2% above our ambitious forecasts. The sustainable income sources were fully in line with our expectations and showed slow sequential growth. Net provisions for loan losses were 15% lower than expected, helped by stable risk profiles both for corporate and retail loans. With 1H11 net profits contributing only 38% to our FY11 estimate (excluding the impairment 48%) we have to adapt our financial model and recommendation.

OTP: 2Q11 results beat our and consensus estimates, on lower risk costs. With 2Q11 net profit of HUF 37.3bn, OTP beat our estimate by 16% and came in 7% above the consensus estimate. The main divergence from our estimate stems from 9% lower than expected net provisions (-4% vs. the consensus). Net interest income was in line with expectations, while net fee & commission income came in 2% higher than expected (+4% vs. the consensus). Operating expenses were in line with our forecast. On a quarterly basis, net profit remained flat, but increased by 36% compared to the same period last year. Net interest income was stable q/q, based on a stable margin (-40bp q/q) and stable customer loans (+1% q/q). Income increased by some HUF 5.5bn. An increase in this line item was expected, as the low 1Q11 level was due to a positive tax shield effect. Net provisions fell significantly, by 11% q/q (-47% y/y). The q/q growth of the NPL ratio decelerated from +170bp last quarter to +40bp in 2Q11, reaching a ratio of 15.4%. Net profit was better than our and consensus expectations. This was mainly due to the better performance of the foreign subsidiaries, which accounted for 30% of consolidated net profit in 1H11. In particular, Russia, Bulgaria and the Ukraine were able to increase their aggregated net profit by 89% in 1H11, compared to the same period last year. FX-adjusted loan volumes declined by 1%, which is the same percentage as in the previous quarter. This was mainly driven by low lending activity in OTP’s core market of Hungary, while Russia and Romania were able to grow their loan portfolios by 5% and 3% q/q, respectively. With 1H11 net profit reaching 46% of our FY11e estimate, we feel comfortable with our current mid-term estimates and therefore stick to our Accumulate recommendation.

OTP conference call topics considered CHF appreciation and foreign subsidiaries. In the OTP conference call following the 2Q11 figures, the major topics were issues related to the strengthening CHF, as well as performance of foreign subsidiaries. The company stated that 22% of their consolidated loan portfolio is CHF-denominated, with the majority coming from Hungary and Romania. 65% of these CHF loans stem from mortgage lending, 7% from consumer and municipality loans each, another 9% from corporates and 13% from the car leasing business. Furthermore, the CFO stated that effects from the strong CHF in risk costs will first be seen only in 4Q11 and more so in 1Q12. Also, the level of risk costs will obviously depend on the CHF/HUF rate, but also on the pick-up level of customers on the relief schemes in place. Besides the state’s Home Protection Action Plan, the OTP has two more schemes in place to support clients who are in trouble. On the one hand, OTP introduced



its own CHF/HUF fixing rate at 200 and keeps the rescheduling program, which already has 3.5% of total retail clients. Looking at foreign subsidiaries, Russia remains the focal point, with loan volumes increasing by 31% y/y in 2Q11, mainly driven by consumer loans. This also explains the favorable development of net interest margin, which grew by 580bp y/y in 2Q11. One interesting aspect is that there has been a shift in the consumer loan segment in Russia. While in 2H10, POS loans accounted for the biggest rise, the focus shifted to credit card and cash loans in 1H11. For the Ukraine, the company is hoping to see their recently introduced consumer loan segment show growth by the end of 2011, based on a strong Christmas season. The Romanian unit increased its loan portfolio by 5% y/y and is expected to see continued growth in 2H11, which should be in line with the positive macro developments.

Pekao: Better than expected 2Q11 results, due to accelerating income pace. For 2Q11, Bank Pekao reported net profit of PLN 714mn (+15% y/y, +10% q/q), which is 7% above our estimates and 4% better than the consensus had expected. The main divergence from our estimates came from better sustainable income sources and also from 6% higher than expected net provisions. NII was up 12% y/y (+6% q/q) and net F&C income grew 10% y/y (+8% q/q). Operating costs (+1% y/y, +1.3% q/q) were in line with our expectations. Net provisions came in at PLN -135mn, which is flat vs. the previous quarter and also vs. 2Q10. In our view, Pekao reported good numbers, which were 7% above our forecasts, in 2Q11. The main outperformance came from better than expected sustainable income sources, based on accelerating underlying loan growth, particularly in the SME and mortgage loan segments. Net provisions were slightly higher than expected and only flat vs. the previous quarter and also vs. 2Q10, despite a slightly improving NPL ratio of 6.9%. Operating costs were under control and in line with our expectations. With 1H11 net profits contributing 44% to our FY11 forecast, we were a little too optimistic on the cost of risk but the volume and income growth dynamics positively surprised us. We will therefore review our financial model and recommendation.

PKO BP: 2Q11 results in line with expectations. PKO BP came in with a 2Q11 net profit of PLN 967.3mn (+24% y/y, +11% q/q), which is fully in line with our and consensus expectations. The main divergence from our estimates came from a 19% lower than expected FX result (-23% q/q, -16% y/y) and 7% better than expected net fee & commission income (flat y/y, +9% q/q). The top line was fully in line with our forecast and 3% better than the consensus had expected. The main net interest income drivers were 2.4% sequential gross customer loan growth (+9% y/y), mainly due to mortgage loans (+4.8% q/q, +13.7% y/y) and corporate loans (+1% q/q, +7.5% y/y) as well as higher deposits (+2.6% q/q, +7.6% y/y) and 20bp q/q better margins of 4.22% (on avg. total assets). Net provisions (+1% q/q, -3% y/y) and operating costs (+1.4% q/q, +4.3% y/y) were also fully in line with our estimates. The NPL ratio went up slightly (by 10bp q/q) to 7.6%, while the NPLs coverage decreased to 49.2%, from 50.7% in 1Q11. In our view, the 2Q11results are fully in line with our expectations and also in line with consensus estimates on the bottom line. The major income sources were better than the consensus had expected. The quality of the results is better than in 1Q11, driven by 17% annual top line growth and 9% annual loan growth. Net F&C income this time was clearly better than expected. The cost side was fully in line with our expectations, both provisioning as well as operating expenses. Due to the current strength of the Swiss franc, we will keep a close eye on further developments, which we regard as remaining painful, at a rate of over 4 CHF/PLN for a long period of time. With 1H11 net profits contributing 44% to our FY11e forecasts, we still feel good about our estimates at the moment, taking further top line growth into account.

RBI: Strong 2Q11 results, thanks to trading income and lower provisions. The 2Q11 net profit of Raiffeisen Bank International came in at EUR 345mn (+28% q/q, +149% y/y), which is 14% above our and 33% above consensus estimates. The main divergence from our forecasts came from 8% lower than expected net provisions (-5.5% q/q, -26% y/y) and a 51% better than expected trading result (+8% q/q, +101% y/y). The latter was positively affected by extraordinary income of EUR 32mn from a capital hedge in Belarus. The positive contribution from net income from derivatives and financial investments of EUR 25mn was slightly higher than we had expected but 11% below 1Q11. Adjusted for the valuation gains, the adjusted net profit was EUR 326mn (+31% q/q, +14% y/y), which is 10% above our forecast. The main income sources were slightly below our expectations, but in line with the consensus. Net interest income was up 1.4% q/q (-0.8% y/y on like-for-like basis), due to 3.1% sequential loan growth (+4% y/y), 4.5% q/q deposit growth (+15% y/y) and stable margins. Net F&C income was up 6% q/q (flat y/y), driven by higher volumes in the payment transfer business in CZ and Russia, as well as higher income from securities in Group Markets. The NPL ratio declined 10bp q/q to 8.5%, thanks to loan growth and despite a EUR 130mn new NPL formation. The NPLs coverage further improved to 68.5% (vs. 68% in 1Q11). Operating expenses were up 6% y/y (+1% q/q), mainly due to 8% y/y higher staff costs based on hiring staff in the Czech Republic, Romania and the Ukraine. In our view, the 2Q11 results of RBI are strong and clearly better than expected. We had the highest estimates in the consensus and still we were



outperformed by 14%. This time the quality of the outperformance was still good, with lower provisions, but the sustainable income sources were a little lower than expected. The pre-tax profit contributions of the segments SEE, Russia and CIS other were clearly better than expected. Only CE was below our forecasts, mainly due to Hungary (EUR -37mn). With 1H11 contributing 46% to our FY11e net profit forecast, we still feel comfortable, also taking into account the buffer in our estimates for provisioning. We stick to our Buy recommendation and will adapt our target price. Given the current share price, we would not expect a capital hike within the next few months.

Local daily, Vatan, reported that the Savings Deposits and Insurance Fund (SDIF) will issue new regulations to banks willing to grow at a faster pace. The main aim is to curb loan demand, a measure expected by investors, communicated to the market by Economy Minister Babacan, and within the scope of CBT policy. Banks with higher loan growth will be obliged to pay higher insurance premiums and premiums will be increased for banks with higher Risk Weighted Assets and shorter deposit maturity. Moreover, the SDIF included off balance sheet liabilities within the equity multiplier calculation, and required a new premium for additional risks as a result of the off balance sheet liabilities. Separately, the BRSA also released new regulations in the official gazette. The watchdog will start a simulation program for the system, and will closely eye the banks with a shorter funding maturity, which is 20% above their equity. The BRSA will run this simulation program for one year and will impose measures if needed. The BRSA will thus be able to eliminate risks as a result of interest rate fluctuations and also try to eliminate the interest rate risk. We are so far unable to comment on the potential impact of the possible regulations for individual banks. However, it will require them to pay around a TRY 100mn additional premium, and is likely to affect more than seven banks in the system. Considering the TRY 1,146mn asset size of the banking system, we do not think that it will have significant impact. It should be also highlighted that both regulations are focused on loan growth and aiming to extend funding maturity.

The slowdown in the lending market was the main worry in recent months and was closely eyed by regulatory bodies, as a result of the rising CAD. The CBT has increased the RRR from 5% to 16% since November, 2010, aiming to curb loan demand and limit annual growth at 25%. Following the CBT, the BRSA had increased the provisions for consumer loans in 2Q11. However, as a result of global factors and weak loan growth in recent weeks, the CBT recently seemed worried about the loss of momentum in economic activity and the market questioned whether this would lead the CBT to revise its TRY RRR policy and revise its 25% growth limit upwards. In this respect, we think both regulations may be perceived negatively in the market, and lead to some pressure on the banking stocks.

The BRSA’s weekly data shows that the slowdown in consumer lending persisted in the second week of the month. Weekly growth in consumer loans came in at 0.5%, slightly higher than the previous week, but lower than the average weekly growth the sector delivered during 1H11. There was 1.8% weekly growth in corporate loans, driven mainly by 4% weekly growth in FC lending. During the same week, the TRY depreciated by 2.6% against the dollar, and when, adjusted with FC, total loans declined by 1%. With last week’s data, the YTD loan growth is carried to 21.3%, implying limited room in the remainder of the year to reach the CBT’s unofficial growth target. Loss of momentum in loan growth and economic activity may lead the CBT to revise its TRY RRR policy in upcoming periods. The CBT has increased the RRR from 5% to 16% since November 2011, aiming to curb loan demand and limit annual growth at 25%. On the funding side, deposits grew by 2% w/w. Again, the main driver was FC deposits. As a result of the margin constraints, Turkish banks have been using other funding alternatives since the beginning of the year, such as repo funding, bonds and syndications, which is the main reason for the low deposit gathering YTD (10%).



Albaraka Turk: Bad loans dented 2Q11 bottom line. Albaraka reported TRY 30mn net earnings in 2Q11. Our estimate and the consensus were TRY 38mn and TRY 34mn, respectively. The lower than expected bottom line can be blamed on deteriorating asset quality, which caused the bank to increase its overall provisions. Consequently, quarterly ROE declined to 13.3%. On a cumulative basis, the 1H11 bottom line of TRY 71mn marks 21% y/y growth. In the underlying period, volume growth lagged behind the sector, with loans only growing by 2.3% q/q, and deposits (funds collected) contracting by 1.5% q/q. Compared to YE10, total lending and deposits grew by 4% and 3%, respectively. For the remainder of the year, as a result of the recent rate cut decision of the CBT, we think the bank will be able to collect deposits more easily and register higher growth on the lending side. The bank lowered its profit sharing ratios, leading net interest income to grow by 8% q/q in 2Q11, which enabled the bank to report a 30bp expansion in its margins. The main supporting factors were increasing loan yields, and declining deposit costs of the bank, which was already projected given the low growth within the quarter. On the other hand, the drop in commission-based income is much higher than we had been expecting, showing a 17% quarterly dive. In 2Q11, bad loans increased, unlike the sector, which in turn caused the bank to increase its NPL provisioning to 88.7% and deteriorated the NPL ratio by 10bp, to 2.9%. We maintain our Accumulate recommendation. Overall, the 2Q11 financial performance is in line with our estimates. For the coming quarters, we foresee higher loan growth, supported by stronger funds collection. The main culprit is the rise in bad loans, but given the earlier structure of the participation banks, we will not change our YE forecasts for the time being.

Isbank 2Q11 financials: Strong dividend income boosted bottom line. Stronger than our TRY 782mn call (TRY 704mn consensus), Isbank released net profit of TRY 808mn in its 2Q11 bank-only financials, marking a 21% quarterly rise. 2Q11 ROE increased 100bp to 5.6% in the same period. Similar to the sector, margins were hurt by rising funding costs, leading NIM to fall by 30bp to 3.3% in the underlying period. In the meantime, there was eye-catching performance in commission-based income, which registered 20% q/q growth, thanks to consumer-driven lending growth. On the balance sheet side, Isbank grew by 9% in total loans, slightly below the sector average, which carried YTD growth to 20%. The growth was mainly driven by retail loans growing by 10% q/q. General purpose loans registered a 12% q/q surge, while credit cards grew by 10% in the same time period. Corporate loan growth was also strong, showing an 8% q/q rise, and was mainly FC driven. In the same quarter, the bank let go of some deposits where the overall base contracted by 1.2% q/q. As a result, the bank’s loans to deposits increased to 85. The bank is the leader in total loans. Isbank continued to show negative NPL formation rate in the quarter, with a drop in the NPL additions & strong recoveries. The bank’s NPL ratio dropped by 40bp, to 2.8% in the quarter. The bank maintained its full coverage policy and total provisions contracted by 9% q/q, leading to a 40bp improvement in the cost of risk to 0.5%. In coming periods, similar to the sector, we expect some deterioration in the asset quality. The deviation mainly stemmed from stronger than expected dividend income materializing at TRY 456 in 2Q11 only; while the bank’s balance sheet and P&L performance is broadly in line with our assumptions. Despite strong lending growth, Isbank still holds one of the lowest loans to deposits ratio among our coverage universe, positioning the bank to be comfortable in terms of funding. Although the local currency deposit base is vulnerable to RR hikes, we think the bank will show a smoother margin contraction in coming periods. However, strong performance in non-recurring items may lead to fluctuations in the bottom line. We will revise our model shortly, but maintain Accumulate for the time being.

Vakifbank: High cost burden, lower than expected 2Q11 bottom line. Vakifbank came out with 2Q11 net profit of TRY 240mn, lagging behind our TRY 270mn call and the TRY 273mn consensus estimate. The reported bottom line marks a 41% q/q dive, dragging down quarterly ROE to 10.8% from 18.9% a quarter earlier. The main divergence from our estimates came from higher than expected OPEX and provisioning expenses; but the top line profitability is in line with our assumptions. There was a robust growth performance, mostly driven by retail and SMEs, which supported fee income generation positively. We need to revise our OPEX and provisioning forecasts upwards in tandem with management’s new guidance, but keep the top line profitability estimate as it is and maintain Hold. Vakifbank shifted its loan mix from corporate to retail and SMEs in the quarter, and thus delivered outstanding performance in consumer loans (general purpose loans rose by 15% q/q, mortgages up by 20% q/q). SME loans also supported the growth, showing a 17% surge in the same time period. Overall, 12.4% loan growth is above the sector’s 10% for the same period. Deposits were the main funding source and registered 9.4% q/q, vs. 5% for the sector average. More importantly, the main driver of deposit growth was demand deposits, registering outstanding growth of 26.3% q/q, which increased the share in total to 26.3%. The main culprit is the loans to deposits ratio, at 99% as of 2Q11. Cost of deposits rose, margins fell. Vakifbank’s local currency cost of deposits rose by 74bp in the quarter, while yield on loans fell by 15bp in the same time period. As a consequence, there is 50bp margin suppression to 3.4%. The bank guides for 3.5% NIM; which is the same as our forecast. The bank’s focus on higher yielding banking products paid off, with a 30% quarterly jump in the fee income. The bank



plans to grow by 15-20% by year-end, within the range of our 18% estimate. OPEX & provisions are on the rise. Bad loans remained almost flat in q/q, and have led the NPL ratio to improve by 50bp to 3.4% in 2Q11. Although the bank maintained its almost stable coverage ratio, provision expenses grew by 22% q/q, as a result of the fact that Group II loans grew by 10% in the quarter. Additionally, the bank set aside TRY 34mn provisions related to dividend expenses to employees. Operational expenses were up by 7% q/q. The main cause of the rise in the OPEX is that the bank moved its headquarters to Istanbul, and this is likely to continue weighing on profitability. The bank revised its YE target up to 17%, from 15% previously, which will lead us to change our forecasts.

TSKB 2Q11 results in line with forecasts. In parallel with our TRY 62mn forecast, TSKB reported TRY 64mn net earnings in its 2Q11 financials. The bottom line is 4% below 1Q11 and had carried the 1H11 net income to TRY 130mn, corresponding to 6% annual growth. Quarterly ROE dropped slightly below 20%. TSKB’s net interest income fell by 12% q/q, as a result of lower yields on loans and securities. This has led to a 30bp contraction in the NIM of the bank, to 4.10%. TSKB is not subject to the RRR on deposits, and is the main beneficiary in the current banking environment. Commission-based income declined by 51%, but is in line with our estimates. TSKB’s total loan book expanded by 7.3% q/q and by 3% in dollar terms. Energy loans remained the main area of concentration in the quarter, which has a 36% share in the overall loan book. The bank guided for higher APEX loans (loans which are disbursed to financial sector) in the coming quarters which should support the margins. YTD loan growth is 15% as of June, 2011, which is in line with our forecasts. TSKB’s security portfolio contracted by 7% q/q in 2Q11. However, with the recent rate cut decision of the CBT, we expect the bank to continue accumulating securities in order to benefit from higher yields. The bank’s NPL ratio dropped to 0.4%, the lowest level among our coverage universe. Provisions dropped by 3% in quarterly terms. We think improvements in fee income generation, an immune position in terms of RRR and its defensive business model, with the highest CAR, no FX mismatch and positive duration mismatch will continue to position TSKB to be one of the beneficiaries in 2011. Meantime, thanks to the FC denominated balance sheet, the bank will benefit from depreciation of TRY going forward. According to management, any 10% TRY depreciation positively contributes to net income by 3-4%.

Akbank: 2Q11 margin squeeze overshadows fee and NPL performance. In line with our forecast and the consensus estimate, Akbank reported a bottom line of TRY 640mn. As a consequence, quarterly ROE fell to 15% from 17.3%. A sharp fall in margins paved the way for eye-catching performance in fees and NPLs. Similar to 1Q11, the balance sheet was reshuffled from securities to loans with the aim of limiting margin erosion. We think this strategy is positive for the bank, as it will enable less dependency on securities income. During the quarter, the bank gradually increased its loan yields by 450bp, but as a result of the rise in deposit costs and falling security spreads, NIM contracted by 50bp in 2Q11 to 3.2%. There is a 24% quarterly surge in commission based income due to credit card bancassurance and other banking commissions. The bank maintained its cost management with only a 1% q/q rise in the OPEX. Loan loss provisions plummeted by 42% q/q, enabling stable cost of risk. 22% growth in total loans YTD. Akbank registered 10.5% quarterly loan growth, mainly driven by local currency loans and saw market share gains in mortgages, auto and general purpose loans, 22% expansion in total loans, and should slow down significantly to reach the CBT’s 25% target. On the funding side, total deposits grew by 6.5% q/q and, similar to its peers, the bank actively used repo funding and bond issuances as an alternative funding source. It has TRY 950mn of unrealized gains, which should support profitability in the coming periods. For 2H, we foresee a slowdown in loan growth and some recovery in the NIM, with increased lending rates. The bank will also be among the main beneficiaries of the CBT’s recent rate cut, with its five month-maturity gap enabling a decline in funding costs.

Garanti: Visible focus on profitability 2Q11. Beating our TRY 890mn call and the TRY 847mn market consensus, Garanti reported TRY 943mn net earnings in its 2Q11 bank only financials. The 2Q11 bottom line implies a 10% q/q surge, and carried the 1H11 net earnings to TRY 1,798mn. The deviation mainly stems from a higher than expected other income item, while top line profitability is broadly in line with our estimates. Garanti booked a TRY 147mn one-off gain from a stake sale in Euroka Sigorta, TRY 75mn from the sale of Visa and Master Card, and TRY 85mn from a subsidiary valuation, which boosted the quarterly bottom line. When adjusting for one-off gains, we reckon on a 26% q/q fall in the bottom line. Garanti’s loan book grew by 6.4% q/q and lagged behind the sector average of 10% in 2Q11, which led the bank to lose market share. Although total deposits grew merely by 3% in the same time period, the bank funded itself through repo funding and bond issuances (TRY 2.5bn corporate bond and USD 800mn Eurobond). The loan to deposit ratio increased to 96%, which will likely pressure the NIM in the coming periods. Garanti managed to limit the decline in the loan yields thanks to 400bp upward re-pricing YTD. TRY blended cost of deposits increased by 40bp to 7%, which impacted the NIM by 24bp. The bank enjoyed margin expansion in this period thanks to increasing yields on CPI linkers (which positively



contributed 38bp to the NIM. When adjusted for the CPI linkers, the NIM is down by 50bp q/q. Fee performance was weak, with an 8% q/q contraction in 2Q11, while the bank sticks to its guidance of 15% annual growth by year-end. OPEX remained under control, with only 1% q/q growth, in line with our forecasts. In the same period, Net NPL remained in negative territory, and the NPL ratio fell below 2% as of June 2011. The results show continued focus on profitability, with ROE increasing to 22.8% in the quarter. Balance sheet and P&L performance is broadly in parallel with our forecasts, along with lower volume growth and expanding margins on the back of increasing security yields. For the remainder of the year, we expect the bank to show a similar growth trend as the sector, and an improvement in the loans to deposit ratio. We maintain Hold.

YKB: Eye-catching volume growth in 2Q11. Above our TRY 400mn forecast and TRY 420mn consensus forecasts, YKB’s 2Q11 net income came in at TRY 442mn, marking a 17% q/q dive. In the quarter, the bank was hurt by rising funding costs and a lack of sizeable dividend income. In cumulative terms, the TRY 979mn bottom line corresponds to a 20% annual slide. Mainly driven by local currency loans, YKB’s loan book expanded by 13% in 2Q11, outperforming the sector average of 10%. On the funding side, there is a 5% q/q surge in total deposits, mainly driven by FC deposits. Meanwhile, similar to its peers, the bank also used repo funding as an alternative funding source, which increased by 85% over 1Q11. The bank currently operates with the one of the highest loans to deposit ratios among its peers, at 111%. In the underlying period, we reckon on a 30bp rise in overall deposits costs, which has led to a 50bp drop in the NIM to 3.3% for 2Q11. For the coming quarters, we foresee the NIM continuing to contract with lower asset yields, and a further rise in funding costs. Overall, we observe increasing focus on growth in the quarter. For the coming periods, we project significant slowdown in loan growth, along with reduced funding pressure, which would lead to less NIM pressure in 2H11. We also expect the positive asset quality trend and cost control to continue. However, we find the stretched loans to deposits ratio worthy of attention.

Sekerbank: Single-digit net earnings in 2Q11. Sekerbank’s net income dropped 75% q/q in 2Q11 to TRY 7.5mn. The bank fell short of our TRY 37mn forecast and TRY 34mn consensus, mainly attributable to a 118% q/q surge in provisioning expenses. Reporting the weakest bottom line since 3Q06, ROE fell sharply to 2.2%, the lowest figure among our coverage universe. The main highlights of the quarter are: i) 1% q/q growth in total loans lagging behind the sector average of 10% in the same time period, where the LC book contracted by 0.2% q/q, ii) 3% growth in deposits, driven mainly by local currency deposits, and 15% growth in total securities in the underlying period, iii) thanks to improving loan deposit spreads, there is 20% q/q growth in net interest income, iv) bad loan generation continued, leading to 20bp deterioration in the NPL ratio to 4.3% in 2Q11. The rise in the NII and total fees was shadowed by a 118% quarterly jump in the provisions. The cost of risk increased to 2.2%, v) OPEX also increased by 37% q/q as a result of the jump in Non-HR costs. Although the bank achieved expansion in its spreads and fee base, the significant rise in the cost of risk and OPEX shadowed the P&L in the quarter. We believe the bad loan generation will continue to dent bottom line earnings, and improvement in profitability levels seems to be challenging for Sekerbank in the current banking environment. We maintain our Reduce call for the time being, despite the bank’s attractive P/BV and P/E multiples, which are 0.74x and 7.0x, respectively, for 2011E.

Halkbank reports robust 2Q11 financial results. Halkbank reported TRY 512mn net earnings in its 2Q11 financials, slightly higher than our TRY 500mn call, but significantly higher than the consensus estimate of TRY 454mn; this was mainly attributable to stronger than expected net interest income. ROE declined to 26.2%, which we expect to remain the highest among our coverage. Quarterly net income marks a 2% q/q decline. In cumulative terms, TRY 1,037mn net earnings as of 1H11 remained flattish y/y. In contrast to the sector, Halkbank’s net interest income increased by 7.7% q/q in 2Q11 and reached TRY 791mn, thanks to a combination of higher security yields and stable loan deposit spreads. As a consequence, NIM remained at 4.0%. In parallel with our forecasts, the bank registered 15% q/q and 33.4% y/y growth in total fees, which is expected to be one of the highest figures among our coverage universe in 2Q11. We expect this growth trend to continue in the remainder of the year, and forecast the bank recording the highest annual growth in total fees, having relatively greater room for growth coming from a lower base. The bank guides for 25-30% annual growth in total fees by YE. Overall, we find the results favorable with stable margins, robust growth in fee income, market share gains in some lending segments and improvements in costs and NPLs. In 2H11, we expect the bank to continue growing its fee base and showing lower margin contraction thanks to its stronger spreads, while we believe that it will register a slowdown in loan expansion, and accordingly keep our 25% loan growth forecast for the year end. Management guidance points to flat net income and 25% ROE for FY11.



Bank Asya: Provisions down in 2Q11, margins improved. In its 2Q11 financials, Bank Asya reported TRY 55mn net earnings, vs. our TRY 60mn forecast and TRY 60.5mn market consensus estimates. The quarterly net earnings imply 15% growth over 1Q11, which can be explained by a sharp dive in provisioning expenses in the period, and the weak base of 1Q11. ROE jumped to 15.3% in the underlying period, showing a significant improvement over the previous quarter’s figure of 9.8%. In cumulative terms, the TRY 103mn bottom line corresponds to 16% annual contraction. Following the 90bp contraction in 1Q11, the bank’s NIM recovered by 50bp in 2Q11 to 4.9%. The main reason behind the positive spread evolution was the decline in funding costs in the quarter, which resulted in a 3% q/q rise in net interest income. Total loans grew by 6.3% q/q, below the sector average, but higher than the participation bank average; meanwhile total funds collected grew by a mere 2% in the same time period. The loans to deposits ratio is stretched to 106% in the quarter, which we find threatening for the coming periods. We consider the results positive, with expanding margins and improving cost of risk. However, the stretched loans to deposits ratio and lower than expected fee income generation are still concerning for the near future. We maintain Hold for the time being.

NIBENS crisis update and influence on share price of AIK Banka. Although the representatives of troubled road construction company NIBENS Group, the government and commercial banks have reached a deal under which the five subsidiaries’ accounts will be unfrozen as soon as courts receive their individual restructuring programs, the share price of AIK Banka is still under pressure, due to its EUR 54mn exposure (according to management’s latest statement) to NIBENS.

AIK Banka's (and other banks’) stance on NIBENS’ debt rescheduling. According to Ljubisa Jovanovic, a managing board member at AIK Banka, the banks have agreed to reschedule the group’s debts. The banks will approve a 10-year repayment schedule for NIBENS, with a one-year grace period. Share performance since beginning of NIBEN’s troubles. NIBENS’ top man Milo Djuraskovic was arrested in May, along with seven other people, on suspicion of causing EUR 32mn in damage to the NIBENS Group. Since then, AIK Banka’s share has lost 38%, touching a two-year low of RSD 2,092 in early August. We have put the bank under review, as we expect a much clearer picture regarding the final provisions in NIBENS’ case by the end of 3Q11. Meanwhile, the daily trading average drained to only EUR 27tsd, compared to EUR 112tsd YTD, so we can assume that there was no significant institutional trading in the last couple of months.




Aik Banka AD RSD 215 13.2% 13.2% 14.3% 14.8% 4.4% 4.5% 5.3% 5.7% -13.6% -37.5% -42.4% -16.4%Akbank TRY 10,400 18.9% 14.6% 14.4% 15.0% 2.9% 2.2% 2.1% 2.2% -14.4% -19.6% -17.3% -38.1%Albaraka Turk TRY 374 18.1% 15.4% 17.2% 18.6% 1.9% 1.5% 1.6% 1.6% -26.7% -28.2% -25.3% -47.0%Banca Transilvania RON 387 6.9% 8.1% 11.0% 15.2% 0.7% 0.8% 1.1% 1.6% -6.1% -9.2% -7.2% -4.3%Bank Asya TRY 702 15.0% 11.1% 11.8% 11.7% 2.1% 1.4% 1.4% 1.3% -21.5% -31.4% -29.4% -55.5%Bank Pekao PLN 9,281 13.3% 15.3% 16.9% 16.5% 1.9% 2.2% 2.4% 2.2% -10.2% -16.6% -14.3% -12.0%BRD-Group SG RON 1,971 19.1% 18.5% 21.0% 18.0% 2.1% 2.3% 2.8% 2.6% -13.1% -18.5% -15.6% 5.6%BRE Bank PLN 2,653 11.4% 13.1% 15.7% 17.4% 0.8% 1.0% 1.2% 1.3% -20.9% -27.2% -19.0% -1.7%BZ WBK PLN 3,916 15.5% 18.8% 19.7% 1.7% 2.2% 2.3% -8.1% -5.6% -5.5% 14.5%FHB HUF 151 21.0% 5.1% 5.2% 6.7% 1.3% 0.4% 0.4% 0.5% -25.8% -36.9% -38.3% -44.9%Garanti Bank TRY 10,681 22.2% 16.6% 15.4% 15.5% 2.9% 2.2% 2.0% 1.9% -17.6% -18.3% -15.2% -35.1%Halkbank TRY 5,459 32.0% 23.9% 21.2% 20.9% 3.2% 2.5% 2.2% 2.2% -10.9% -13.6% -10.8% -32.8%Isbank TRY 8,062 20.6% 13.9% 13.4% 13.4% 2.6% 1.8% 1.7% 1.6% -11.3% -17.4% -14.9% -38.0%Komercijalna Banka RSD 325 8.0% 6.3% 8.2% 13.8% 1.2% 0.9% 1.1% 1.9% -15.2% -24.6% -21.7% -11.0%Komercni banka CZK 5,521 19.0% 18.9% 20.7% 21.6% 2.0% 2.0% 2.2% 2.3% -8.1% -12.9% -17.1% -8.0%OTP HUF 4,141 9.4% 12.0% 14.9% 15.6% 1.2% 1.6% 2.1% 2.3% -24.2% -35.4% -29.0% -15.6%PKO BP PLN 10,638 15.5% 18.5% 19.6% 21.6% 2.0% 2.4% 2.5% 2.7% -17.0% -23.7% -17.9% -11.3%Raiffeisen Bank InternaEUR 5,826 14.0% 16.3% 17.8% 20.2% 0.8% 1.1% 1.2% 1.5% -12.0% -21.0% -30.0% -10.2%Sekerbank TRY 349 13.5% 10.3% 10.3% 11.3% 1.8% 1.2% 1.1% 1.2% -15.4% -27.3% -28.4% -42.5%Turk Ekonomi Bank TRY 1,540 18.3% 9.2% 10.1% 1.9% 0.9% 1.0% -12.8% -26.8% -3.9% -40.3%Turkiye Sinai Kalkinma TRY 444 19.3% 17.7% 17.5% 17.0% 3.0% 2.9% 2.8% 2.6% -24.0% -34.0% -12.9% -17.1%Vakifbank TRY 3,148 15.3% 13.2% 12.7% 12.1% 1.8% 1.6% 1.7% 1.6% -15.2% -21.9% -22.1% -42.4%Yapi Kredi Bank TRY 6,004 23.3% 18.0% 18.4% 16.7% 2.9% 2.3% 2.5% 2.2% -16.8% -21.2% -25.3% -41.3%Median - - 15.5% 14.6% 15.4% 15.6% 1.9% 1.8% 2.0% 1.9% - - - -UniCredit S.p.A. EUR - 24,309 2.9% 4.5% 5.9% 6.4% - - - - -10.1% -27.2% -31.1% -41.6%KBC Group N.V. EUR - 8,948 15% 16% 15.2% 14.6% - - - - -0.7% -9.1% -13.6% -30.6%Svenska HandelsbankeSEK - 13,559 12.2% 13.0% 13.0% 13.0% - - - - 7.5% -6.8% -12.3% 0.6%Erste Group Bank AG EUR - 12,616 7.4% 9.1% 11.1% 11.8% - - - - -1.9% -4.3% -7.5% 2.8%Societe Generale S.A. EUR - 27,632 9.2% 9.9% 10.9% 11.5% - - - - -8.3% -20.8% -26.3% -20.9%Median - - 9.2% 9.9% 11.1% 11.8% - - - - - - - -Euro Stoxx Banks 404,242 6% 5.7% 6.8% 8.0% - - - - -22.1% -30.5% -36.2% -23.1%CEE to Peer, Prem/Disc - 69% 47% 38% 33% - - - - - - - -

ROE ROA Performance (EUR terms)



2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAik Banka AD 5.5 3.6 2.8 2.4 0.0% 1.5% 1.8% 2.2% 0.7 0.4 0.4 0.3Akbank 11.6 8.9 9.0 7.8 0.0% 3.4% 3.3% 3.8% 2.0 1.4 1.2 1.1Albaraka Turk 10.5 6.1 5.4 4.4 1.0% 5.7% 6.5% 7.9% 1.7 1.0 0.9 0.8Banca Transilvania 10.7 10.8 7.7 4.2 0.0% 1.3% 2.0% 3.6% 0.7 0.9 0.8 0.6Bank Asya 9.5 6.9 6.3 5.6 0.0% 3.6% 4.0% 4.4% 1.3 0.8 0.7 0.6Bank Pekao 18.7 12.0 10.7 10.5 3.8% 5.0% 6.5% 6.7% 2.3 1.9 1.8 1.7BRD-Group SG 8.2 7.3 5.5 5.7 1.5% 2.3% 7.2% 7.0% 1.5 1.2 1.1 1.0BRE Bank 14.4 11.8 9.2 7.5 1.0% 2.1% 4.3% 5.3% 1.6 1.5 1.4 1.2BZ WBK 17.0 13.3 11.8 2.9% 3.8% 4.2% 2.6 2.4 2.2 FHB 5.5 13.5 12.4 9.2 0.0% 0.0% 0.0% 2.2% 1.1 0.7 0.6 0.6Garanti Bank 10.1 8.4 8.7 7.7 0.0% 3.0% 2.9% 3.2% 2.0 1.4 1.2 1.2Halkbank 7.9 6.4 6.7 5.8 3.2% 5.5% 5.3% 6.0% 2.2 1.5 1.3 1.1Isbank 8.0 7.4 7.7 6.9 0.0% 4.1% 3.9% 4.3% 1.5 1.1 1.0 0.9Komercijalna Banka 10.1 12.2 8.5 4.5 0.0% 0.0% 0.0% 0.0% 0.8 0.7 0.7 0.6Komercni banka 12.7 9.4 7.8 6.9 6.0% 6.4% 7.7% 8.7% 2.3 1.7 1.6 1.4OTP 11.2 6.5 4.6 4.0 1.6% 3.1% 4.3% 7.6% 1.0 0.7 0.7 0.6PKO BP 15.2 10.1 8.5 6.9 2.5% 3.9% 4.7% 5.8% 2.5 1.8 1.6 1.4Raiffeisen Bank International 9.0 5.1 4.2 3.2 2.6% 4.0% 4.8% 6.4% 1.2 0.8 0.7 0.6Sekerbank 7.5 5.2 5.3 4.4 1.0% 2.9% 3.8% 4.6% 0.9 0.6 0.5 0.5Turk Ekonomi Bank 7.9 9.6 8.3 0.0% 0.0% 0.0% 1.4 0.9 0.8 Turkiye Sinai Kalkinma Banka 6.4 4.9 4.8 0.0 3.1% 3.1% 3.1% 822.1% 1.1 0.9 0.8 0.0Vakifbank 8.2 5.9 5.9 5.4 0.0% 4.2% 4.2% 4.6% 1.1 0.8 0.7 0.6Yapi Kredi Bank 9.9 6.6 6.0 5.8 0.0% 3.8% 4.2% 4.3% 2.0 1.2 1.0 0.9Median CEE 9.9 7.4 7.7 5.7 1.0% 3.4% 4.2% 4.6% 1.5 1.0 0.9 0.8UniCredit S.p.A. 13.2 8.2 6.0 5.2 2.4% 3.2% 5.2% 6.4% 0.5 0.4 0.4 0.3KBC Group N.V. 5.2 4.5 4.5 4.0 3.0% 3.1% 3.7% 4.2% 0.8 0.7 0.7 0.6Svenska Handelsbanken A 11.3 10.0 9.4 8.7 4.6% 5.1% 5.6% 5.8% 1.5 1.3 1.2 1.1Erste Group Bank AG 14.3 10.9 8.0 6.9 2.1% 2.2% 2.7% 3.3% 1.1 1.0 0.9 0.8Societe Generale S.A. (France 7.2 6.2 5.1 4.6 4.9% 5.4% 6.8% 7.6% 0.7 0.6 0.6 0.5Median 11.3 8.2 6.0 5.2 3.0% 3.2% 5.2% 5.8% 0.8 0.7 0.7 0.6Euro Stoxx Banks 13.0 8.8 6.8 5.7 2.8% 3.7% 4.7% 5.9% 0.6 0.6 0.5 0.5CEE to Peer, Prem/Disc -12% -10% 29% 10% -68% 6% -21% -21% 87% 33% 28% 33%

Div yield P/BVP/E




2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAik Banka AD 23.0% 21.9% 21.8% 21.5% 5.2% 5.7% 6.0% 6.0% 110% 119% 126% 134%Akbank 37.1% 40.7% 41.6% 40.1% 4.3% 3.2% 3.5% 3.6% 74% 94% 99% 102%Albaraka Turk 42.7% 45.2% 38.0% 37.0% 4.5% 3.7% 4.3% 4.0% 89% 96% 97% 98%Banca Transilvania 48.1% 59.5% 60.6% 61.1% 4.9% 3.8% 3.8% 3.8% 84% 82% 82% 82%Bank Asya 51.9% 52.0% 51.2% 49.3% 4.8% 4.0% 3.9% 3.8% 95% 104% 105% 106%Bank Pekao 51.1% 48.0% 47.7% 48.9% 3.1% 3.3% 3.2% 3.2% 86% 85% 84% 84%BRD-Group SG 42.4% 47.9% 49.8% 53.2% 4.8% 4.9% 4.8% 4.9% 118% 113% 115% 114%BRE Bank 55.4% 53.6% 53.4% 54.1% 2.2% 2.4% 2.4% 2.3% 127% 128% 129% 130%BZ WBK 51.0% 48.6% 49.7% 3.2% 2.8% 2.9% 87% 83% 83% FHB 60.2% 73.6% 76.7% 74.8% 3.1% 2.8% 2.8% 2.8% nm nm nm nmGaranti Bank 40.1% 42.4% 42.3% 41.4% 4.4% 3.4% 3.2% 3.2% 82% 103% 107% 111%Halkbank 33.5% 38.7% 39.1% 37.7% 5.0% 4.1% 4.1% 4.0% 77% 88% 93% 97%Isbank 40.6% 45.1% 48.5% 48.4% 3.9% 3.2% 3.4% 3.6% 71% 90% 93% 96%Komercijalna Banka 66.6% 60.3% 58.1% 52.2% 3.4% 3.5% 3.5% 4.0% 78% 77% 78% 81%Komercni banka 41.4% 41.7% 40.5% 40.2% 3.1% 3.2% 3.4% 3.4% 70% 73% 75% 76%OTP 49.4% 53.3% 55.6% 55.8% 6.3% 6.3% 5.9% 5.7% 121% 128% 128% 129%PKO BP 43.3% 40.8% 40.6% 38.9% 4.0% 4.2% 3.9% 3.9% 96% 98% 99% 99%Raiffeisen Bank International 61.9% 51.1% 52.4% 53.8% 2.6% 2.9% 2.9% 3.1% 135% 133% 133% 132%Sekerbank 57.6% 61.2% 60.2% 57.8% 5.8% 4.5% 4.3% 4.2% 86% 110% 114% 119%Turk Ekonomi Bank 59.8% 66.6% 63.7% 4.7% 4.4% 4.4% 98% 118% 124% Turkiye Sinai Kalkinma Banka 17.6% 17.7% 17.1% 17.4% 4.2% 3.9% 3.8% 3.6% nm nm nm nmVakifbank 41.0% 47.8% 46.8% 46.9% 4.1% 3.4% 3.5% 3.8% 82% 118% 122% 126%Yapi Kredi Bank 40.9% 44.1% 45.0% 43.9% 4.5% 3.6% 3.5% 3.4% 98% 119% 123% 128%Median CEE 43.3% 47.9% 48.5% 48.4% 4.3% 3.6% 3.5% 3.8% 86.6% 103.1% 105% 106%UniCredit S.p.A. - - - - 1.7% 1.7% 1.8% 1.8% - - - -KBC Group N.V. - - - - 1.7% 1.7% 1.7% 1.7% - - - -Svenska Handelsbanken A - - - - 1.1% 1.0% 1.0% 1.0% - - - -Erste Group Bank AG - - - - 2.7% 2.6% 2.6% 2.6% - - - -Societe Generale S.A. (France - - - - 1.1% 1.1% 1.1% 1.2% - - - -Median - - - - 1.7% 1.7% 1.7% 1.7% - - - -Euro Stoxx Banks - - - - 1.5% 1.6% 1.7% 1.7% - - - -CEE to Peer, ppt - - - - 2.63 1.91 1.85 2.04 - - - -

Cost/income ratio Net interest margin Loans/deposits ratio




Aik Banka AD Under review Target price RSD Price (RSD) 2,252.0 CIR (2010) 23% 10 11e 12e 13eMcap (RSD mn) 21,610 ROE (2010) 13.2% Total assets (RSD mn) 141,583 137,214 150,935 166,028Mcap (EUR mn) 215 L/D ratio (2010) 110% Total income (RSD mn) 10,604.0 11,411.2 12,400.2 13,612.0Free float (%) 79.2% Equity ratio (2010) 31.2% Net interest income (RSD mn) 6,641.7 7,858.6 8,644.5 9,508.9Free float (EUR mn) 170 BVPS CAGR 10-13e 13.9% Risk provisions (RSD mn) -1,968.0 -2,107.3 -1,219.4 -639.3Shares outst. (mn) 9.6 EPS CAGR 10-13e 10.6% Tot. equity/Tot. assets 31.20% 36.36% 37.91% 39.70%

EPS (RSD) 582.61 641.53 799.92 947.69BVPS (RSD) 4,602.68 5,198.93 5,962.85 6,867.89Net interest margin 5.21% 5.71% 6.00% 6.00%Cost/income ratio 22.99% 21.92% 21.77% 21.48%P/BV 0.72 0.43 0.38 0.33P/E 5.54 3.56 2.82 2.38Dividend yield 0.00% 1.45% 1.84% 2.18%P/BV rel. 0.5 0.4 0.4 0.4P/E rel. - - 0.4 0.4

Performance 1M 3M 6M 12MAbsolute (RSD terms) -15.0% -35.5% -44.5% -20.3%Rel. to sector (EUR, ppt) -1.3 -21.6 -29.4 -1.6Rel. to universe (EUR, ppt) -3.7 -22.7 -31.2 -10.2

Akbank Hold Target price TRY 7.9Price (TRY) 6.400 CIR (2010) 37% 10 11e 12e 13eMcap (TRY mn) 25,600 ROE (2010) 18.9% Total assets (TRY mn) 113,183 126,531 142,253 160,347Mcap (EUR mn) 10,400 L/D ratio (2010) 74% Total income (TRY mn) 6,509.6 6,369.7 6,870.0 7,717.7Free float (%) 10.3% Equity ratio (2010) 15.5% Net interest income (TRY mn) 4,276.8 3,900.7 4,683.9 5,396.2Free float (EUR mn) 1,071 BVPS CAGR 10-13e 5.1% Risk provisions (TRY mn) -518.8 -430.1 -415.2 -468.9Shares outst. (mn) 4,000 EPS CAGR 10-13e -2.5% Tot. equity/Tot. assets 15.52% 14.76% 14.50% 14.41%

EPS (TRY) 0.71 0.67 0.71 0.82BVPS (TRY) 4.39 4.67 5.16 5.78Net interest margin 4.32% 3.24% 3.49% 3.57%Cost/income ratio 37.13% 40.69% 41.59% 40.07%P/BV 1.95 1.37 1.24 1.11P/E 11.63 8.87 9.04 7.81Dividend yield 0.00% 3.38% 3.32% 3.84%P/BV rel. 1.3 1.4 1.4 1.4P/E rel. 1.2 1.2 1.2 1.4


Albaraka Turk Accumulate Target price TRY 2.3Price (TRY) 1.7 CIR (2010) 43% 10 11e 12e 13eMcap (TRY mn) 922 ROE (2010) 18.1% Total assets (TRY mn) 8,406 9,679 11,839 14,200Mcap (EUR mn) 374 L/D ratio (2010) 89% Total income (TRY mn) 472.3 487.2 631.7 722.6Free float (%) 22.2% Equity ratio (2010) 10.1% Net interest income (TRY mn) 316.2 338.3 459.8 520.1Free float (EUR mn) 83 BVPS CAGR 10-13e 13.6% Risk provisions (TRY mn) -105.1 -90.0 -177.2 -200.2Shares outst. (mn) 539 EPS CAGR 10-13e 18.6% Tot. equity/Tot. assets 10.14% 9.68% 8.92% 8.34%



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Akbank ISE 100 (Rebased) DJ EURO STOXX Banks (Rebased)

52 weeks

1,41,61,82,02,22,42,62,83,03,2

Albaraka TurkISE 100 (Rebased)DJ EURO STOXX Banks (Rebased)

52 weeks

1.500

2.000

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Aik Banka ADBELEX 15 (Rebased)DJ EURO STOXX Banks (Rebased)



Banca Transilvania Hold Target price RON 1.3Price (RON) 1.1 CIR (2010) 48% 10 11e 12e 13eMcap (RON mn) 1,640 ROE (2010) 6.9% Total assets (RON mn) 21,730 22,035 23,798 25,940Mcap (EUR mn) 387 L/D ratio (2010) 84% Total income (RON mn) 1,541.9 1,377.1 1,489.0 1,619.1Free float (%) 85.4% Equity ratio (2010) 9.6% Net interest income (RON mn) 996.3 831.3 870.8 945.0Free float (EUR mn) 331 BVPS CAGR 10-13e 11.0% Risk provisions (RON mn) -647.0 -327.6 -246.8 -106.1Shares outst. (mn) 1,478 EPS CAGR 10-13e 29.3% Tot. equity/Tot. assets 9.61% 10.07% 10.24% 10.69%

EPS (RON) 0.10 0.10 0.14 0.27BVPS (RON) 1.41 1.25 1.37 1.88Net interest margin 4.85% 3.84% 3.80% 3.80%Cost/income ratio 48.07% 59.47% 60.56% 61.07%P/BV 0.72 0.89 0.81 0.59P/E 10.69 10.77 7.67 4.15Dividend yield 0.00% 1.34% 1.95% 3.61%P/BV rel. 0.5 0.9 0.9 0.8P/E rel. 1.1 1.5 1.0 0.7

Performance 1M 3M 6M 12MAbsolute (RON terms) -6.1% -7.0% -6.5% -4.8%Rel. to sector (EUR, ppt) 6.2 6.8 5.8 10.5Rel. to universe (EUR, ppt) 3.8 5.7 4.0 1.9

Bank Asya Hold Target price TRY 2.7Price (TRY) 1.9 CIR (2010) 52% 10 11e 12e 13eMcap (TRY mn) 1,728 ROE (2010) 15.0% Total assets (TRY mn) 14,513 17,183 20,963 25,164Mcap (EUR mn) 702 L/D ratio (2010) 95% Total income (TRY mn) 1,022.1 1,060.6 1,201.6 1,361.4Free float (%) 50.9% Equity ratio (2010) 13.4% Net interest income (TRY mn) 593.5 637.1 745.9 867.1Free float (EUR mn) 357 BVPS CAGR 10-13e 13.2% Risk provisions (TRY mn) -167.5 -205.4 -226.9 -274.7Shares outst. (mn) 900 EPS CAGR 10-13e 0.5% Tot. equity/Tot. assets 13.38% 12.72% 11.72% 11.14%



Bank Pekao Reduce Target price PLN 160.0Price (PLN) 147.0 CIR (2010) 51% 10 11e 12e 13eMcap (PLN mn) 38,563 ROE (2010) 13.3% Total assets (PLN mn) 134,090 146,871 160,090 179,300Mcap (EUR mn) 9,281 L/D ratio (2010) 86% Total income (PLN mn) 7,444.5 8,174.3 9,002.8 9,797.0Free float (%) 40.8% Equity ratio (2010) 15.0% Net interest income (PLN mn) 4,103.7 4,498.2 4,930.5 5,444.7Free float (EUR mn) 3,783 BVPS CAGR 10-13e 5.7% Risk provisions (PLN mn) -537.9 -439.2 -248.5 -360.7Shares outst. (mn) 262 EPS CAGR 10-13e 11.1% Tot. equity/Tot. assets 15.05% 14.15% 13.66% 12.81%

EPS (PLN) 9.63 11.70 13.68 14.01BVPS (PLN) 76.89 79.10 83.01 86.96Net interest margin 3.13% 3.27% 3.21% 3.21%Cost/income ratio 51.11% 48.04% 47.71% 48.92%P/BV 2.33 1.86 1.77 1.69P/E 18.73 12.03 10.75 10.49Dividend yield 3.77% 4.98% 6.50% 6.66%P/BV rel. 1.6 1.9 2.0 2.2P/E rel. 1.9 1.6 1.4 1.8Performance 1M 3M 6M 12MAbsolute (PLN terms) -6.7% -12.5% -10.4% -7.8%Rel. to sector (EUR, ppt) 2.1 -0.7 -1.3 2.8Rel. to universe (EUR, ppt) -0.3 -1.7 -3.1 -5.8

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Banca TransilvaniaBET (Rebased)DJ EURO STOXX Banks (Rebased)

52 weeks

1,5

2,0

2,5

3,0

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Bank Asya ISE 100 (Rebased) DJ EURO STOXX Banks (Rebased)

52 weeks

80

100

120

140

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Bank PekaoWIG 20 (Rebased)DJ EURO STOXX Banks (Rebased)



BRD-Group SG Accumulate Target price RON 16.6Price (RON) 12.0 CIR (2010) 42% 10 11e 12e 13eMcap (RON mn) 8,349 ROE (2010) 19.1% Total assets (RON mn) 49,667 51,729 54,833 58,080Mcap (EUR mn) 1,971 L/D ratio (2010) 118% Total income (RON mn) 3,663.5 3,885.3 4,069.5 4,291.9Free float (%) 40.6% Equity ratio (2010) 11.5% Net interest income (RON mn) 2,319.7 2,486.0 2,557.5 2,740.5Free float (EUR mn) 801 BVPS CAGR 10-13e 14.9% Risk provisions (RON mn) -882.9 -613.2 -237.1 -268.1Shares outst. (mn) 697 EPS CAGR 10-13e 6.1% Tot. equity/Tot. assets 11.49% 13.01% 13.92% 14.70%

EPS (RON) 1.45 1.65 2.16 2.08BVPS (RON) 8.19 9.65 10.95 12.25Net interest margin 4.77% 4.90% 4.80% 4.85%Cost/income ratio 42.38% 47.90% 49.81% 53.22%P/BV 1.46 1.24 1.09 0.98P/E 8.22 7.26 5.54 5.75Dividend yield 1.51% 2.34% 7.22% 6.96%P/BV rel. 1.0 1.3 1.3 1.3P/E rel. 0.8 1.0 0.7 1.0

Performance 1M 3M 6M 12MAbsolute (RON terms) -13.1% -16.5% -15.0% 5.1%Rel. to sector (EUR, ppt) -0.8 -2.5 -2.6 20.5Rel. to universe (EUR, ppt) -3.2 -3.6 -4.4 11.9

BRE Bank Hold Target price PLN 340.0Price (PLN) 262.0 CIR (2010) 55% 10 11e 12e 13eMcap (PLN mn) 11,024 ROE (2010) 11.4% Total assets (PLN mn) 87,992 99,431 113,848 133,203Mcap (EUR mn) 2,653 L/D ratio (2010) 127% Total income (PLN mn) 3,333.9 3,803.7 4,352.8 4,873.1Free float (%) 30.1% Equity ratio (2010) 7.5% Net interest income (PLN mn) 1,818.8 2,175.9 2,569.4 2,792.7Free float (EUR mn) 800 BVPS CAGR 10-13e 11.0% Risk provisions (PLN mn) -652.8 -557.9 -390.5 -219.6Shares outst. (mn) 42.08 EPS CAGR 10-13e 68.3% Tot. equity/Tot. assets 7.51% 7.32% 7.02% 6.66%

EPS (PLN) 17.51 21.19 28.41 34.83BVPS (PLN) 157.03 172.92 189.97 210.86Net interest margin 2.17% 2.37% 2.41% 2.26%Cost/income ratio 55.40% 53.63% 53.37% 54.12%P/BV 1.59 1.52 1.38 1.24P/E 14.38 11.85 9.22 7.52Dividend yield 0.99% 2.11% 4.34% 5.32%P/BV rel. 1.1 1.5 1.6 1.6P/E rel. 1.4 1.6 1.2 1.3

Performance 1M 3M 6M 12MAbsolute (PLN terms) -17.8% -23.6% -15.2% 2.9%Rel. to sector (EUR, ppt) -8.6 -11.3 -6.0 13.1Rel. to universe (EUR, ppt) -11.0 -12.3 -7.7 4.5

BZ WBK Hold Target price PLN 227.0Price (PLN) 223.0 CIR (2010) 51% 10 11e 12e 13eMcap (PLN mn) 16,270 ROE (2010) 15.5% Total assets (PLN mn) 60,753 66,828 76,853 Mcap (EUR mn) 3,916 L/D ratio (2010) 87% Total income (PLN mn) 3,498.1 3,714.5 4,293.6 Free float (%) 29.5% Equity ratio (2010) 10.0% Net interest income (PLN mn) 1,792.7 1,743.1 2,059.5Free float (EUR mn) 1,155 BVPS CAGR 10-13e #WERT! Risk provisions (PLN mn) -435.6 -217.1 -116.6Shares outst. (mn) 73 EPS CAGR 10-13e #WERT! Tot. equity/Tot. assets 10.00% 9.97% 9.56% #WERT!

EPS (PLN) 12.59 16.03 18.87 BVPS (PLN) 83.13 91.14 100.58 Net interest margin 3.15% 2.79% 2.87%Cost/income ratio 50.99% 48.57% 49.75%P/BV 2.56 2.45 2.22P/E 17.02 13.33 11.81 Dividend yield 2.90% 3.75% 4.23% P/BV rel. 1.8 2.5 2.5 #WERT!P/E rel. 1.7 1.8 1.5 #WERT!

Performance 1M 3M 6M 12MAbsolute (PLN terms) -4.5% -0.9% -1.1% 19.9%Rel. to sector (EUR, ppt) 4.2 10.4 7.6 29.3Rel. to universe (EUR, ppt) 1.8 9.3 5.8 20.7

52 weeks

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BRE Bank WIG 20 (Rebased) DJ EURO STOXX Banks (Rebased)

52 weeks

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BZ WBK WIG 20 (Rebased) DJ EURO STOXX Banks (Rebased)

52 weeks

6789

10111213141516

BRD-Group SGBET (Rebased)DJ EURO STOXX Banks (Rebased)



FHB Hold Target price HUF 700.0Price (HUF) 627.0 CIR (2010) 60% 10 11e 12e 13eMcap (HUF bn) 41 ROE (2010) 21.0% Total assets (HUF mn) 873,520.5 842,947.3 872,450.4 911,710.7Mcap (EUR mn) 151 L/D ratio (2010) 951% Total income (HUF mn) 35,307.4 30,482.8 29,813.4 30,338.7Free float (%) 37.6% Equity ratio (2010) 6.8% Net interest income (HUF mn) 26,193.8 23,172.3 24,015.6 24,978.3Free float (EUR mn) 57 BVPS CAGR 10-13e 9.2% Risk provisions (HUF mn) -5,126.6 -3,740.6 -2,498.8 -1,686.4Shares outst. (mn) 66 EPS CAGR 10-13e -10.8% Tot. equity/Tot. assets 6.76% 7.36% 7.50% 7.57%

EPS (HUF) 170.60 45.68 50.65 68.05BVPS (HUF) 896.54 942.92 994.31 1,049.52Net interest margin 3.12% 2.77% 2.80% 2.80%Cost/income ratio 60.22% 73.63% 76.71% 74.78%P/BV 1.07 0.66 0.63 0.60P/E 5.54 13.51 12.38 9.21Dividend yield 0.00% 0.00% 0.00% 2.17%P/BV rel. 0.7 0.7 0.7 0.8P/E rel. 0.6 1.8 1.6 1.6

Performance 1M 3M 6M 12MAbsolute (HUF terms) -24.5% -35.0% -38.0% -47.0%Rel. to sector (EUR, ppt) -13.5 -20.9 -25.2 -30.1Rel. to universe (EUR, ppt) -15.9 -22.0 -27.0 -38.7

Garanti Bank Hold Target price TRY 8.1Price (TRY) 6.3 CIR (2010) 40% 10 11e 12e 13eMcap (TRY mn) 26,292 ROE (2010) 22.2% Total assets (TRY mn) 123,963 142,575 166,155 189,799Mcap (EUR mn) 10,681 L/D ratio (2010) 82% Total income (TRY mn) 7,577.5 7,492.8 8,002.5 8,914.3Free float (%) 48.6% Equity ratio (2010) 13.3% Net interest income (TRY mn) 4,754.7 4,537.6 4,988.7 5,615.5Free float (EUR mn) 5,195 BVPS CAGR 10-13e 14.3% Risk provisions (TRY mn) -584.3 -618.3 -723.2 -828.4Shares outst. (mn) 4,200 EPS CAGR 10-13e 3.5% Tot. equity/Tot. assets 13.29% 12.85% 12.71% 11.97%



Halkbank Buy Target price TRY 14.7Price (TRY) 10.8 CIR (2010) 34% 10 11e 12e 13eMcap (TRY mn) 13,438 ROE (2010) 32.0% Total assets (TRY mn) 72,942 85,118 97,542 113,013Mcap (EUR mn) 5,459 L/D ratio (2010) 77% Total income (TRY mn) 4,463.0 4,644.9 4,968.9 5,500.6Free float (%) 24.9% Equity ratio (2010) 10.2% Net interest income (TRY mn) 3,191.0 3,263.0 3,726.5 4,249.6Free float (EUR mn) 1,361 BVPS CAGR 10-13e 20.0% Risk provisions (TRY mn) -458.4 -479.5 -564.9 -656.4Shares outst. (mn) 1,250 EPS CAGR 10-13e 9.1% Tot. equity/Tot. assets 10.21% 10.36% 10.45% 10.58%


Performance 1M 3M 6M 12MAbsolute (TRY terms) -8.5% -7.3% -1.4% -14.7%Rel. to sector (EUR, ppt) 1.4 2.3 2.3 -18.0Rel. to universe (EUR, ppt) -1.0 1.3 0.5 -26.6

52 weeks

600

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FHB BUX (Rebased) DJ EURO STOXX Banks (Rebased)

52 weeks

4

5

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9

10

Garanti BankISE 100 (Rebased)DJ EURO STOXX Banks (Rebased)

52 weeks

789

1011121314151617

Halkbank ISE 100 (Rebased) DJ EURO STOXX Banks (Rebased)



Isbank Accumulate Target price TRY 5.7Price (TRY) 4.4 CIR (2010) 41% 10 11e 12e 13eMcap (TRY mn) 19,845 ROE (2010) 20.6% Total assets (TRY mn) 131,796 142,065 164,172 186,681Mcap (EUR mn) 8,062 L/D ratio (2010) 71% Total income (TRY mn) 7,891.4 7,435.0 8,034.5 9,117.7Free float (%) 30.4% Equity ratio (2010) 12.9% Net interest income (TRY mn) 4,581.9 4,445.3 5,244.5 6,285.9Free float (EUR mn) 2,451 BVPS CAGR 10-13e 3.3% Risk provisions (TRY mn) -1,135.4 -986.6 -903.4 -1,033.4Shares outst. (mn) 4,500 EPS CAGR 10-13e -4.7% Tot. equity/Tot. assets 12.91% 12.93% 12.24% 12.05%


Performance 1M 3M 6M 12MAbsolute (TRY terms) -8.9% -11.4% -6.0% -21.3%Rel. to sector (EUR, ppt) 1.0 -1.5 -1.9 -23.1Rel. to universe (EUR, ppt) -1.4 -2.6 -3.7 -31.7

Komercijalna Banka Hold Target price RSD 3,100.0Price (RSD) 2,350.0 CIR (2010) 67% 10 11e 12e 13eMcap (RSD mn) 32,620 ROE (2010) 8.0% Total assets (RSD mn) 272,203 310,607 360,304 417,953Mcap (EUR mn) 325 L/D ratio (2010) 78% Total income (RSD mn) 14,241.4 17,545.6 20,267.2 25,216.4Free float (%) 32.4% Equity ratio (2010) 15.7% Net interest income (RSD mn) 8,372.8 10,042.1 11,740.9 15,565.1Free float (EUR mn) 105 BVPS CAGR 10-13e 6.6% Risk provisions (RSD mn) -1,581.3 -3,949.3 -4,226.4 -4,017.0Shares outst. (mn) 14 EPS CAGR 10-13e 26.6% Tot. equity/Tot. assets 15.70% 14.47% 13.54% 13.40%

EPS (RSD) 251.53 195.72 276.71 520.97BVPS (RSD) 3,078.71 3,238.22 3,514.92 4,035.85Net interest margin 3.35% 3.48% 3.50% 4.00%Cost/income ratio 66.63% 60.29% 58.09% 52.21%P/BV 0.85 0.73 0.67 0.58P/E 10.06 12.19 8.49 4.51Dividend yield 0.00% 0.00% 0.00% 0.00%P/BV rel. 0.6 0.7 0.8 0.7P/E rel. 1.0 1.6 1.1 0.8

Performance 1M 3M 6M 12MAbsolute (RSD terms) -16.6% -22.1% -24.6% -15.2%Rel. to sector (EUR, ppt) -2.9 -8.6 -8.7 3.8Rel. to universe (EUR, ppt) -5.3 -9.7 -10.5 -4.8

Komercni banka Hold Target price CZK 4,700.0Price (CZK) 3,512.0 CIR (2010) 41% 10 11e 12e 13eMcap (CZK mn) 133,491 ROE (2010) 19.0% Total assets (CZK mn) 698,014 742,006 801,366 865,476Mcap (EUR mn) 5,521 L/D ratio (2010) 70% Total income (CZK mn) 32,737.0 34,585.4 38,873.8 42,255.6Free float (%) 39.7% Equity ratio (2010) 10.7% Net interest income (CZK mn) 21,431.0 22,806.0 26,078.8 28,284.9Free float (EUR mn) 2,189 BVPS CAGR 10-13e 8.4% Risk provisions (CZK mn) -3,100.0 -2,372.5 -1,685.3 -988.7Shares outst. (mn) 38 EPS CAGR 10-13e 15.1% Tot. equity/Tot. assets 10.71% 10.63% 10.69% 10.79%

EPS (CZK) 350.70 376.69 448.47 508.14BVPS (CZK) 1,967.36 2,074.61 2,254.00 2,457.26Net interest margin 3.13% 3.20% 3.38% 3.39%Cost/income ratio 41.43% 41.70% 40.49% 40.15%P/BV 2.25 1.69 1.56 1.43P/E 12.74 9.38 7.83 6.91Dividend yield 6.04% 6.40% 7.66% 8.68%P/BV rel. 1.5 1.7 1.8 1.8P/E rel. 1.3 1.3 1.0 1.2

Performance 1M 3M 6M 12MAbsolute (CZK terms) -8.1% -14.1% -17.8% -10.0%Rel. to sector (EUR, ppt) 4.2 3.1 -4.1 6.8Rel. to universe (EUR, ppt) 1.8 2.0 -5.9 -1.8

52 weeks

1.500

2.000

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Komercijalna BankaBELEX 15 (Rebased)DJ EURO STOXX Banks (Rebased)

52 weeks

2.000

2.500

3.000

3.500

4.000

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5.000

Komercni banka PX (Rebased) DJ EURO STOXX Banks (Rebased)

52 weeks

3,0

3,5

4,0

4,5

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5,5

6,0

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7,0

Isbank ISE 100 (Rebased) DJ EURO STOXX Banks (Rebased)



OTP Accumulate Target price HUF 7,000.0Price (HUF) 4,050.0 CIR (2010) 49% 10 11e 12e 13eMcap (HUF mn) 1,134,000 ROE (2010) 9.4% Total assets (HUF bn) 9,781 10,290 10,945 11,914Mcap (EUR mn) 4,141 L/D ratio (2010) 121% Total income (HUF bn) 817.0 794.5 817.2 859.3Free float (%) 81.6% Equity ratio (2010) 13.3% Net interest income (HUF bn) 616.4 614.2 623.3 651.8Free float (EUR mn) 3,380 BVPS CAGR 10-13e 11.0% Risk provisions (HUF bn) -273.0 -179.1 -91.5 -62.0Shares outst. (mn) 280 EPS CAGR 10-13e 15.3% Tot. equity/Tot. assets 13.32% 13.91% 14.74% 15.11%

EPS (HUF) 442.61 614.53 871.10 1,019.67BVPS (HUF) 4,987.36 5,478.98 6,175.86 6,889.63Net interest margin 6.28% 6.27% 5.87% 5.70%Cost/income ratio 49.42% 53.34% 55.57% 55.78%P/BV 1.01 0.74 0.66 0.59P/E 11.22 6.49 4.65 3.97Dividend yield 1.55% 3.08% 4.30% 7.55%P/BV rel. 0.7 0.8 0.8 0.8P/E rel. 1.1 0.9 0.6 0.7


PKO BP Accumulate Target price PLN 50.0Price (PLN) 35.4 CIR (2010) 43% 10 11e 12e 13eMcap (PLN mn) 44,200 ROE (2010) 15.5% Total assets (PLN mn) 169,661 193,442 221,491 254,715Mcap (EUR mn) 10,638 L/D ratio (2010) 96% Total income (PLN mn) 10,490.5 12,131.0 13,226.1 15,007.8Free float (%) 48.8% Equity ratio (2010) 12.6% Net interest income (PLN mn) 6,516.2 7,511.1 8,096.5 9,297.6Free float (EUR mn) 5,187 BVPS CAGR 10-13e 11.7% Risk provisions (PLN mn) -1,868.4 -1,771.5 -1,163.3 -831.3Shares outst. (mn) 1,250 EPS CAGR 10-13e 25.8% Tot. equity/Tot. assets 12.59% 12.83% 12.61% 12.48%

EPS (PLN) 2.87 3.34 4.14 5.16BVPS (PLN) 17.09 19.86 22.34 25.43Net interest margin 4.03% 4.22% 3.90% 3.90%Cost/income ratio 43.30% 40.81% 40.58% 38.86%P/BV 2.54 1.78 1.58 1.39P/E 15.23 10.14 8.55 6.86Dividend yield 2.52% 3.95% 4.68% 5.83%P/BV rel. 1.7 1.8 1.8 1.8P/E rel. 1.5 1.4 1.1 1.2

Performance 1M 3M 6M 12MAbsolute (PLN terms) -13.8% -20.0% -14.1% -7.1%Rel. to sector (EUR, ppt) -4.7 -7.8 -4.9 3.5Rel. to universe (EUR, ppt) -7.1 -8.9 -6.7 -5.1

Raiffeisen Bank InternationaBuy Target price EUR 55.0Price (EUR) 29.8 CIR (2010) 62% 10 11e 12e 13e

ROE (2010) 14.0% Total assets (EUR mn) 131,173 146,243 151,508 157,871Mcap (EUR mn) 5,826 L/D ratio (2010) 135% Total income (EUR mn) 6,502.5 6,044.2 6,378.4 6,959.7Free float (%) 21.5% Equity ratio (2010) 5.2% Net interest income (EUR mn) 3,578.2 4,004.3 4,262.8 4,719.6Free float (EUR mn) 1,253 BVPS CAGR 10-13e 14.1% Risk provisions (EUR mn) -1,194.1 -935.7 -763.0 -306.4Shares outst. (mn) 196 EPS CAGR 10-13e 65.7% Tot. equity/Tot. assets 5.21% 4.97% 5.54% 6.25%

EPS (EUR) 4.56 5.89 7.14 9.42BVPS (EUR) 35.15 37.39 43.14 50.72Net interest margin 2.57% 2.89% 2.86% 3.05%Cost/income ratio 61.91% 51.10% 52.38% 53.81%P/BV 1.17 0.80 0.69 0.59P/E 8.99 5.06 4.17 3.16Dividend yield 2.56% 3.98% 4.82% 6.36%P/BV rel. 0.8 0.8 0.8 0.8P/E rel. 0.9 0.7 0.5 0.6

Performance 1M 3M 6M 12MAbsolute (EUR terms) -12.0% -21.0% -30.0% -10.2%Rel. to sector (EUR, ppt) 0.3 -5.0 -17.0 4.7Rel. to universe (EUR, ppt) -2.1 -6.1 -18.8 -3.9

52 weeks

2.5003.000

3.500

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6.500

OTP BUX (Rebased) DJ EURO STOXX Banks (Rebased)

52 weeks

20

25

30

35

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50

PKO BP WIG 20 (Rebased) DJ EURO STOXX Banks (Rebased)

52 weeks

15

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50

Raiffeisen Bank InternationalATX (Rebased)DJ EURO STOXX Banks (Rebased)



Sekerbank Hold Target price TRY 1.1Price (TRY) 0.9 CIR (2010) 58% 10 11e 12e 13eMcap (TRY mn) 860 ROE (2010) 13.5% Total assets (TRY mn) 11,369 13,252 15,387 17,676Mcap (EUR mn) 349 L/D ratio (2010) 86% Total income (TRY mn) 851.7 836.7 927.5 1,050.4Free float (%) 32.0% Equity ratio (2010) 12.3% Net interest income (TRY mn) 562.5 555.8 612.1 690.1Free float (EUR mn) 112 BVPS CAGR 10-13e -0.7% Risk provisions (TRY mn) -146.8 -134.5 -164.1 -196.7Shares outst. (mn) 1,000 EPS CAGR 10-13e -3.7% Tot. equity/Tot. assets 12.32% 11.49% 10.80% 10.32%



Turk Ekonomi Bank Hold Target price TRY 2.0Price (TRY) 1.7 CIR (2010) 60% 10 11e 12e 13eMcap (TRY mn) 3,792 ROE (2010) 18.3% Total assets (TRY mn) 19,031 21,262 24,872Mcap (EUR mn) 1,540 L/D ratio (2010) 98% Total income (TRY mn) 1,317.0 1,245.6 1,419.3Free float (%) 10.8% Equity ratio (2010) 9.5% Net interest income (TRY mn) 767.9 887.1 1,010.8Free float (EUR mn) 166 BVPS CAGR 10-13e #WERT! Risk provisions (TRY mn) -166.1 -190.5 -231.6 Shares outst. (mn) 2,204 EPS CAGR 10-13e #WERT! Tot. equity/Tot. assets 9.53% 9.99% 9.43% #WERT!

EPS (TRY) 0.27 0.16 0.21BVPS (TRY) 1.65 1.93 2.13Net interest margin 4.74% 4.38% 4.38%Cost/income ratio 59.82% 66.56% 63.71% P/BV 1.35 0.89 0.81P/E 7.90 9.64 8.34Dividend yield 0.00% 0.00% 0.00%P/BV rel. 0.9 0.9 0.9 #WERT!P/E rel. 0.8 1.3 1.1 #WERT!

Performance 1M 3M 6M 12MAbsolute (TRY terms) -10.4% -21.5% 6.2% -24.2%Rel. to sector (EUR, ppt) -0.5 -10.8 9.1 -25.5Rel. to universe (EUR, ppt) -2.9 -11.9 7.3 -34.1

Turkiye Sinai Kalkinma Ban Buy Target price TRY 2.9Price (TRY) 1.8 CIR (2010) 18% 10 11e 12e 13eMcap (TRY mn) 1,092 ROE (2010) 19.3% Total assets (TRY mn) 7,912 8,756 10,468 12,443Mcap (EUR mn) 444 L/D ratio (2010) nm Total income (TRY mn) 355.8 386.1 431.2 488.3Free float (%) 41.5% Equity ratio (2010) 16.0% Net interest income (TRY mn) 297.7 325.8 365.5 413.9Free float (EUR mn) 184 BVPS CAGR 10-13e 336.6% Risk provisions (TRY mn) -24.7 -19.2 -23.3 -27.9Shares outst. (mn) 600 EPS CAGR 10-13e 330.1% Tot. equity/Tot. assets 15.98% 16.16% 15.61% 15.20%


Performance 1M 3M 6M 12MAbsolute (TRY terms) -21.9% -29.2% -3.8% 5.2%Rel. to sector (EUR, ppt) -11.7 -18.0 0.1 -2.3Rel. to universe (EUR, ppt) -14.1 -19.1 -1.7 -10.9

52 weeks

0,60,70,80,91,01,11,21,31,41,5

Sekerbank ISE 100 (Rebased) DJ EURO STOXX Banks (Rebased)

52 weeks

1,2

1,4

1,6

1,8

2,0

2,2

2,4

2,6

2,8

Turk Ekonomi BankISE 100 (Rebased)DJ EURO STOXX Banks (Rebased)

52 weeks

0,81,01,21,41,61,82,02,22,42,62,8

Turkiye Sinai Kalkinma BankasiISE 100 (Rebased)DJ EURO STOXX Banks (Rebased)



Vakifbank Hold Target price TRY 3.7Price (TRY) 3.1 CIR (2010) 41% 10 11e 12e 13eMcap (TRY mn) 7,750 ROE (2010) 15.3% Total assets (TRY mn) 73,962 72,489 84,000 95,511Mcap (EUR mn) 3,148 L/D ratio (2010) 82% Total income (TRY mn) 4,125.8 3,925.7 4,349.0 4,917.2Free float (%) 25.2% Equity ratio (2010) 11.6% Net interest income (TRY mn) 2,730.0 2,554.5 2,768.2 3,386.4Free float (EUR mn) 793 BVPS CAGR 10-13e 14.4% Risk provisions (TRY mn) -973.2 -675.0 -720.0 -816.0Shares outst. (mn) 2,500 EPS CAGR 10-13e 3.4% Tot. equity/Tot. assets 11.57% 13.35% 13.07% 13.24%



Yapi Kredi Bank Hold Target price TRY 4.3Price (TRY) 3.4 CIR (2010) 41% 10 11e 12e 13eMcap (TRY mn) 14,780 ROE (2010) 23.3% Total assets (TRY mn) 84,776 92,358 107,121 121,935Mcap (EUR mn) 6,004 L/D ratio (2010) 98% Total income (TRY mn) 6,091.2 6,172.0 6,930.8 7,487.8Free float (%) 18.2% Equity ratio (2010) 12.2% Net interest income (TRY mn) 3,199.6 3,225.7 3,540.1 3,841.7Free float (EUR mn) 1,093 BVPS CAGR 10-13e 18.3% Risk provisions (TRY mn) -1,083.0 -893.0 -930.0 -1,146.0Shares outst. (mn) 4,347 EPS CAGR 10-13e 16.9% Tot. equity/Tot. assets 12.17% 13.64% 13.19% 13.28%



52 weeks

2,0

2,5

3,0

3,5

4,0

4,5

5,0

5,5

Vakifbank ISE 100 (Rebased) DJ EURO STOXX Banks (Rebased)

52 weeks

2,5

3,0

3,5

4,0

4,5

5,0

5,5

6,0

Yapi Kredi BankISE 100 (Rebased)DJ EURO STOXX Banks (Rebased)

Sector Insight Basic Resources


– Rising pressure on steel mill margins in 3Q11 – RHI keeps positive outlook after strong 2Q11 results – voestalpine 1Q11/12 results were as expected – AMAG: Very strong 2Q11 results and optimistic outlook for rest of 2011 – KGHM might step up guidance – JSW negative outlook

Crude steel production in the EU27 advanced 5.7% y/y in July 2011, after growing 7.5% in 1Q11 and 1.6% in 2Q11. Worldwide steel capacity utilization was 79.7% in July 2011, 4.9 percentage points higher compared to July 2010, but 3.4 percentage points lower than in June 2011 – mainly seasonally. In its latest steel market outlook, EUROFER, the European steel industry body, said that evidence has become stronger for economic growth becoming more balanced, owing to an investment-driven rebound in domestic demand. Manufacturing will remain the sector that benefits the most in this phase of the upswing, but a slight improvement in the construction sector is also foreseen. Weak macroeconomic data and leading indicators, however, point to a marked slowdown of economic growth, and consequently steel demand, in 2H11 and 2012. After strong spot market steel price increases in calendar 1Q11 (raw material cost push and restocking), steel prices trended lower until just recently, following the seasonal summer slow-down, while raw material prices remained comparably strong over the last months. Profit margins of steel mills selling to the spot market will therefore come under considerable pressure in calendar 3Q11. However, there are already rumors that a couple of blast furnaces in Europe (two BFs from ArcelorMittal and one or two from other producers) would help to improve profit margins towards year-end.

RHI’s second quarter results were clearly above expectations (EBIT 11% above consensus estimates). 2Q revenues (+9.7% y/y; +5.6% q/q) advanced further compared to the good level in 1Q11, driven by successful price increases above all in the Steel Division. The EBIT margin recovered from 7.1% in 1Q11 to 9.2% in 2Q11; the 1Q11 margins, mainly in the Steel division (which recovered to 7.4%, from 2.3% in 1Q11, on 6.6% higher revenues q/q), were negatively impacted by FX losses, rising raw material prices and aggressive competition. According to management, the fear of losing business due to price increases has not materialized, as several other refractories suppliers have also raised prices (including Magnesita). 2Q EBIT of EUR 40.0mn almost matched the level of 2Q10, which was the strongest quarter in the post-recession history (also helped by EUR 7.9mn in positive one-offs). Cash flow in 2Q11 was burdened by increasing receivables: net debt in the last three months rose from EUR 318.3mn to EUR 346.9mn, also due to a dividend payment of EUR 19.9mn in May. RHI left its guidance roughly unchanged. In a stable macro-economic environment with unchanged foreign currency exchange rates, RHI expects 2H11 revenues comparable to the first half. There is still some catch up left from recent price increases, as they usually take 3-6 months, due to the contractual structure. The price of the most important raw material, magnesite, has stabilized at a high level. Only zirconium sand, which is used in the business unit glass (8% of revenue), continued to soar (already up 100% YTD). Overall profitability is therefore expected to climb further. RHI assumes that, in the third quarter, the EBIT margin will be comparable to the second quarter 2011, despite seasonally slightly lower revenues. In the fourth quarter of 2011, the EBIT margin for the RHI Group will rise to 9.5% and quarterly revenues should post a new record. Company guidance translates into 2011 EBIT of EUR 149mn, which is slightly above expectations (EB estimate: EUR 140.1; consensus: EUR 147mn). After recent declines, the share is strongly undervalued (2011e P/E of only 6x) and we will keep our Buy recommendation.

voestalpine’s 1Q11/12 results were in line with expectations, the bottom line was a touch above, thanks to a better financial result. Group-wide demand from all major customer industries (except construction) remained solid. Revenues rose 19.4% y/y and 1.1% q/q to EUR 3,051mn and EBIT of EUR 317.6mn was up 56% y/y and down 2.8% q/q. In the Steel Division, shipments were 9.9% lower sequentially, as voestalpine smoothed shipments ahead of a three-week shutdown of the rolling mill in Linz to expand annual capacity from 5.5mn to 6.0mn tons – production in the Steel Division still remained at record high levels. Price increases of quarterly contracts exactly balanced higher raw material costs so EBIT in the Steel Division declined EUR 20mn to EUR 101mn. Results in the Special Steel Division and Railway-Systems division (adjusted for a EUR 8mn extraordinary gain in 4Q10/11) remained unchanged q/q. A slight positive surprise was the Profilform Division, due to outstanding demand (higher than capacity) from industries such as commercial vehicles, solar energy, agricultural machinery and efficiency improvements. Net attributable income of EUR 189.9mn came in 4.3% above consensus and 5.3% above our expectation. Net financial debt remained roughly unchanged compared to three months ago (EUR 2,713mn) at EUR 2,780mn, due to higher working capital (inventory) ahead of the above mentioned standstill in August.



voestalpine CEO says financial market turbulence has not yet spilled over to its customers. The outlook still calls for “another substantial improvement of the operating results in 2011/12”. Financial market turbulence has not yet spilled over to voestalpine’s customers and the most important customer industries (automobile, commercial vehicle, energy, mechanical engineering, railway infrastructure and aviation) have signaled mostly stable development for the coming months, apart from seasonality. Crude steel production in 2Q11/12, however, has to be reduced by 12%, due to the latest expansion measures in Linz. CEO Eder said he therefore expects 2Q11/12 EBIT to be about 25% lower than 1Q11/12 (i.e., about EUR 240mn). Starting in 3Q11/12, he expects EBIT to be back above the EUR 300mn mark. Looking at the general economic environment, Eder believes the industry is now much better prepared in case of a downturn than in 2008, as it is more alert and runs lower inventories, which gives him reason for optimism. Despite significant macroeconomic worries, the immediate outlook is still positive. According to VDA, German car production was 18% higher y/y in July and heavy vehicle registrations in Germany also rose 18%. Due to capacity upgrades/expansion measures (lost production + additional costs), seasonality and windfall losses in the Special Steel Division (mainly lower nickel prices) 2Q11/12 EBIT will decline to a level of around EUR 250mn before recovering. In our next research, we will make only moderate changes to our FY11/12 results but lower our estimates for the following years based on the weaker economic data. Nevertheless, the recent share price decline is overdone.

AMAG reported very solid results, above our expectation (2Q EBIT 35% higher than expected). 2Q11 revenues were at the same level as 1Q11 and up 15.3% y/y. 2Q EBITDA rose 28% q/q and 10% compared to the strong quarter in the previous year, and 2Q EBIT was up 42% q/q and 15% y/y. In 2Q11, the Metal division increased shipped volumes, as about 10% of shipments were delayed from the first quarter due to weather, and the average aluminum price was 3% higher (in USD, EUR/USD is largely hedged). The Rolling and Casting divisions continued to post strong volumes and margins driven above all by the transportation industries (passenger cars, aircrafts). The order situation remains satisfactory and positive business development is expected to continue for the rest of the year. A slight reduction in shipped quantities is expected in 2H11, due to maintenance work scheduled in Ranshofen. Management improved the 2011 outlook for the second time in its short history at the stock exchange. AMAG now expects the 2011 results to be at least at the level of the record year 2010 (previously: ‘in line with 2010’). We will not make significant changes to our estimates for the current year. The stock trades at a P/E of <7.5 on our current 2011 estimate. Fundamentally, the share is strongly undervalued – also taking into account the good long-term growth prospects of aluminum in transportation industries. We stick to our Buy recommendation.

European thermal coal prices were virtually steady in August, at around USD 128/t (2012 contract). While inventories in ports are still high, port operators are positive towards the end of the year, due to decreasing coal production in Europe. Spot seaborne benchmark coking coal prices have further decreased in the last month and it seems the 4Q11 benchmark contract could be settled at around USD 300/t, down from USD 315/t in the third quarter.

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NWR reported 2Q11 net income down 36% y/y to EUR 82.5mn, due to last year’s EUR 82mn one-off gain from assets disposal. The results were 2% above the consensus. EBITDA increased by 50% y/y to EUR 168mn, thanks to 39% higher coking coal prices. Revenues were EUR 455.2mn (+17%) ,in line with the consensus, as the company earlier provided a detailed trading statement with achieved prices and volumes. Mining cash costs were reported at EUR 82/t for 1H11 (+6% y/y ex-FX), which is almost in line with our EUR 81-82/t estimate. Interim DVD was announced at EUR 0.16/share (2.5% yield), which is roughly in line with NWR’s policy (50% PoR). NWR confirmed its production (11MT of coal and 800kt of coke) and sales volume (10.3Mt of coal and 720kt of coke) targets as well as cash costs (+10% ex-FX) target. However, NWR expects a worse production mix than earlier, with 52% of steam coal, 4% PCI coal and only 44% coking coal in FY2011 (earlier 50/50). NWR said it sees risks of near-term volatility in coal prices and risks to 2012 volumes. The results are basically in line with estimates and it looks as though NWR will be able to achieve its production and costs guidance. However, the worse guidance regarding the production mix, coupled with cautious comments regarding the market outlook looks bad. We will have to lower our estimates for 2011-12, which should already be priced in. We can also imagine lower DVD PoR in 2012-13.

Park Elektrik buys real estate for USD 30.5mn. Park Elektrik announced that it acquired a building in Istanbul from Sarkuysan for USD 30.5mn. The news is rather puzzling, as the intention of this investment was not specified. We think that the cash outflow is negative for the company.

KGHM announced that, in September, it may raise its forecasts for 2011 net profit from the current PLN 8.4bn (no exact number was revealed, but we expect a level of about PLN 9.2bn). Also, the CEO revealed that the large acquisition of a copper mine is likely (value of about PLN 6-7bn). In our opinion, this is a severe risk factor for the stock, in light of the expected slowdown of the global economy and current record copper prices. KGHM posted good results for 2Q11, in line with our expectations.

JSW revealed a quite negative outlook - it is expected that coking coal prices will decrease by 10% in 3Q11 and another 10% in 4Q11. This will have a severe impact on the company, due to its huge operating leverage. JSW also posted quite disappointing results for 2Q11. The situation regarding Bogdanka looks more interesting, as the firm provided guidance that it should finish its increase of output capacities on time (the end of September). Energy coal prices have a much more defensive character. Separately, the CEO of Bogdanka speculated that Tauron might be interested in acquiring the former company. However, in our opinion, this could prove to be too heavy a financial burden for TPE.




AMAG EUR 561 14.9% 17.7% 15.3% 14.9% 18.9% 16.8% 17.3% 16.9% -8.9% -8.9% -11.1% -11.1%KGHM PLN 8,111 36.0% 37.5% 26.6% 39.4% 46.7% 46.0% -13.5% -15.9% -8.0% 48.8%Mayr-Melnhof EUR 1,405 11.4% 11.9% 11.1% 10.7% 13.7% 13.2% 13.2% 13.2% -5.2% -15.3% -16.1% -7.0%New World Resources EUR 1,810 34% 46.1% 29.3% 29.9% 39.4% 34.0% -26.8% -36.6% -41.9% -41.9%Park Elektrik TRY 180 12.2% 22% 15.7% 14.8% 54.0% 57.6% 57.2% 55.9% -26.4% -30.9% -19.3% -3.0%RHI EUR 699 40.0% 28% 25.7% 23.2% 11.3% 11.7% 12.8% 13.0% -4.7% -21.5% -35.2% -17.6%voestalpine EUR 4,451 15.0% 17% 17.4% 17.4% 14.7% 14.8% 15.1% 15.6% -26.1% -23.9% -20.2% 7.7%Median - - 15% 22% 17% 15% 19% 17% 17% 16% - - - -Median Steel - 45,198 6.9% 10.7% 14.3% 14.7% 8.4% 12.0% 14.2% 15.5% - - - -Median Metals & Mining - 470,187 12.6% 13.7% 13.3% 13.1% 22.8% 19.9% 20.4% 21.1% - - - -Median Pulp & Paper - 13,210 7.0% 8.6% 9.4% 9.6% 13.4% 14.9% 15.6% 15.6% - - - -Median Total - 528,594 10.0% 10.9% 12.3% 12.8% 14.8% 16.3% 16.9% 16.8% - - - -EuroStoxx Basic Resources 87,496 7.3% 10.0% 9.7% 9.7% 11% 12% 13% 14% -15.1% -18.6% -14.2% 5.1%CEE to Peer, Prem/Disc - 50% 98% 41% 16% 27% 3% 2% -7% - - - -


2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAMAG 7.3 6.8 6.2 4.4 4.2 4.0 1.1 1.0 0.9KGHM 7.2 5.3 6.1 6.2 4.7 5.3 2.3 1.8 1.5Mayr-Melnhof 16.2 11.9 11.8 11.3 9.5 6.8 7.0 6.7 1.8 1.4 1.3 1.2New World Resources 4.4 5.9 3.2 3.9 1.8 1.6Park Elektrik 15.2 4.9 6.1 5.6 9.9 4.0 4.9 4.7 1.7 1.0 0.9 0.8RHI 11.1 7.0 6.1 5.5 8.3 4.5 4.1 3.7 3.7 1.7 1.4 1.2voestalpine 10.9 6.7 5.9 5.2 4.8 3.4 3.3 3.1 1.5 1.1 1.0 0.9Median CEE 11.1 6.7 6.1 5.6 8.3 4.4 4.2 4.0 1.8 1.4 1.3 0.9Median Steel n.a. 14.4 9.6 8.4 9.2 7.3 5.7 5.4 1.6 1.5 1.3 1.2Median Metals & Mining 14.7 11.9 10.2 9.1 7.2 7.7 7.2 5.7 1.7 1.6 1.5 1.3Median Pulp & Paper 12.0 9.1 7.5 6.8 6.1 4.2 4.0 3.7 0.8 0.8 0.7 0.7Median Total 15.8 12.8 9.5 8.6 7.7 7.1 5.8 5.5 1.5 1.4 1.3 1.1EuroStoxx Basic Resources 18.8 13.0 9.6 7.2 9.1 6.9 4.6 4.3 1.3 1.2 1.0 0.9CEE to Peer, Prem/Disc -30% -48% -36% -35% 8% -38% -26% -27% 24% -2% 0% -22%

2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAMAG 0.8 0.7 0.6 4.5 3.9 3.5KGHM 1.9 1.6 1.5 4.8 3.3 3.4Mayr-Melnhof 0.9 0.7 0.6 0.6 6.7 5.0 4.8 4.4New World Resources 1.1 1.1 2.8 3.2Park Elektrik 6.5 1.9 0.3 nm 12.0 3.3 0.5 nmRHI 1.2 0.8 0.7 0.7 10.4 6.7 5.7 5.0voestalpine 0.9 0.8 0.7 0.7 6.4 5.2 4.7 4.2Median CEE 1.2 0.8 0.7 0.6 6.7 4.5 3.9 4.3Median Steel 1.3 0.9 0.8 0.7 11.5 7.3 5.3 4.5Median Metals & Mining 1.7 1.2 1.0 1.0 8.5 6.6 6.3 5.9Median Pulp & Paper 1.0 0.8 0.7 0.6 6.8 5.4 4.4 3.9Median Total 1.3 1.0 0.9 0.8 8.5 6.3 5.7 5.0EuroStoxx Basic Resources 1.0 0.8 0.7 0.6 6.9 6.2 5.2 4.4CEE to Peer, Prem/Disc -11% -22% -22% -25% -21% -29% -32% -13%

P/E P/CE P/BV

EV/Sales EV/EBITDA




AMAG Buy Target price EUR 24.0Price (EUR) 15.9 ROCE 2010 13.1% 10 11e 12e 13e

ROE 2010 14.9% Sales (EUR mn) 728.0 828.8 871.8 924.3Mcap (EUR mn) 561 Net debt (EURmn, 10) 39.5 EBITDA margin 18.87% 16.85% 17.31% 16.87%Free float (%) 37.9% Gearing (2010) 8% EBIT margin 12.74% 11.22% 11.86% 11.67%Free float (EUR mn) 213 Sales CAGR 10-13e 15.6% Net profit margin 10.27% 8.81% 9.49% 9.74%Shares outst. (mn) 35.3 EPS CAGR 10-13e 25.2% EPS (EUR) 1.57 2.16 2.36 2.56

Dividend/share (EUR) 5.67 0.60 0.65 0.70EV/sales 0.76 0.68 0.58EV/EBITDA 4.52 3.90 3.46P/E 7.35 6.75 6.22P/CE 4.43 4.24 4.01P/BV 1.10 0.98 0.88Dividend yield 3.74% 4.07% 4.42%EV/EBITDA rel. - - 1.0 0.8P/E rel. - - 1.1 1.1

Performance 1M 3M 6M 12MAbsolute (EUR terms) -8.9% -8.9% -11.1% -11.1%Rel. to sector (EUR, ppt) 7.5 10.5 5.7 -21.6Rel. to universe (EUR, ppt) 1.0 6.0 0.1 -4.9

KGHM Buy Target price PLN 202.0Price (PLN) 168.5 ROCE 2010 35.7% 10e 11e 12e 13eMcap (PLN mn) 33,700 ROE 2010 36.0% Sales (PLN mn) 15,716.6 17,644.4 16,395.0Mcap (EUR mn) 8,111 Net debt (EURmn, 10) -603.0 EBITDA margin 39.40% 46.68% 45.96%Free float (%) 68.2% Gearing (2010) -17% EBIT margin 35.48% 42.88% 41.52%Free float (EUR mn) 5,532 Sales CAGR 10-13e #WERT! Net profit margin 28.66% 34.75% 33.65% Shares outst. (mn) 200.0 EPS CAGR 10-13e #WERT! EPS (PLN) 22.52 30.66 27.58

Dividend/share (PLN) 8.00 10.00 22.07EV/sales 1.90 1.56 1.55EV/EBITDA 4.83 3.34 3.37P/E 7.17 5.29 6.11 P/CE 6.22 4.72 5.34P/BV 2.26 1.77 1.50Dividend yield 4.95% 6.16% 13.10%EV/EBITDA rel. 0.7 0.7 0.9 #WERT!P/E rel. 0.6 0.8 1.0 #WERT!

Performance 1M 3M 6M 12MAbsolute (PLN terms) -10.2% -11.8% -3.8% 55.9%Rel. to sector (EUR, ppt) 2.9 3.4 8.8 38.3Rel. to universe (EUR, ppt) -3.6 -1.1 3.2 55.0

Mayr-Melnhof Accumulate Target price EUR 82.0Price (EUR) 70.3 ROCE 2010 13.4% 10 11e 12e 13e

ROE 2010 11.4% Sales (EUR mn) 1,778.9 1,930.4 1,935.8 1,990.9Mcap (EUR mn) 1,405 Net debt (EURmn, 10) -130.6 EBITDA margin 13.72% 13.16% 13.18% 13.19%Free float (%) 41.0% Gearing (2010) -13% EBIT margin 9.12% 8.89% 8.91% 8.96%Free float (EUR mn) 576 Sales CAGR 10-13e 5.6% Net profit margin 6.21% 6.18% 6.21% 6.28%Shares outst. (mn) 20.0 EPS CAGR 10-13e 8.7% EPS (EUR) 5.39 5.92 5.96 6.20


Performance 1M 3M 6M 12MAbsolute (EUR terms) -5.2% -15.3% -16.1% -7.0%Rel. to sector (EUR, ppt) 11.2 4.1 0.7 -17.5Rel. to universe (EUR, ppt) 4.7 -0.4 -4.9 -0.8

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New World Resources Accumulate Target price CZK 293.0Price (CZK) 165.5 ROCE 2010 18.3% 10 11e 12e 13eMcap (CZK mn) 1,810 ROE 2010 34.1% Sales (EUR mn) 1,590.0 1,886.0 1,807.9Mcap (EUR mn) 1,810 Net debt (EURmn, 10) 329.9 EBITDA margin 29.9% 39.4% 34.0% Free float (%) 36.4% Gearing (2010) 41% EBIT margin 18.94% 30.54% 24.20% Free float (EUR mn) 658 Sales CAGR 10-13e #WERT! Net profit margin 14.23% 21.88% 17.14%Shares outst. (mn) 264.4 EPS CAGR 10-13e #WERT! EPS (EUR) 0.88 1.57 1.16

Dividend/share (EUR) 0.45 0.78 0.69EV/sales 1.10 1.09 EV/EBITDA 2.79 3.20 P/E 4.37 5.92P/CE 3.20 3.85P/BV 1.83 1.65Dividend yield 11.45% 10.14% EV/EBITDA rel. #WERT! 0.6 0.8 #WERT!P/E rel. - 0.7 1.0 #WERT!

Performance 1M 3M 6M 12MAbsolute (CZK terms) -26.8% -37.5% -41.7% -41.7%Rel. to sector (EUR, ppt) -10.4 -17.3 -25.1 -52.4Rel. to universe (EUR, ppt) -16.9 -21.8 -30.7 -35.7

Park Elektrik Buy Target price TRY 5.2Price (TRY) 3.0 ROCE 2010 12.4% 10 11e 12e 13eMcap (TRY mn) 444 ROE 2010 12.2% Sales (TRY mn) 83.8 181.3 194.9 209.5Mcap (EUR mn) 180 Net debt (EURmn, 10) -11 EBITDA margin 54.00% 57.60% 57.23% 55.90%Free float (%) 32.0% Gearing (2010) -6% EBIT margin 30.46% 47.60% 48.23% 48.90%Free float (EUR mn) 58 Sales CAGR 10-13e 27.7% Net profit margin 44.36% 45.85% 37.33% 37.89%Shares outst. (mn) 148.9 EPS CAGR 10-13e 42.2% EPS (TRY) 0.25 0.56 0.49 0.53

Dividend/share (TRY) 0.00 0.00 0.00 0.00EV/sales 6.50 1.88 0.29 nmEV/EBITDA 12.04 3.26 0.50 nmP/E 15.23 4.92 6.10 5.59P/CE 9.95 4.04 4.91 4.72P/BV 1.71 1.04 0.89 0.77Dividend yield 0.00% 0.00% 0.00% 0.00%EV/EBITDA rel. 1.8 0.7 0.1 #WERT!P/E rel. - 0.7 1.0 1.0

Performance 1M 3M 6M 12MAbsolute (TRY terms) -24.4% -25.9% -10.8% 23.1%Rel. to sector (EUR, ppt) -10.0 -11.5 -2.4 -13.5Rel. to universe (EUR, ppt) -16.5 -16.0 -8.0 3.2

RHI Buy Target price EUR 27.5Price (EUR) 17.5 ROCE 2010 14.2% 10 11e 12e 13e

ROE 2010 40.0% Sales (EUR mn) 1,522.9 1,664.4 1,698.1 1,764.0Mcap (EUR mn) 699 Net debt (EURmn, 10) 610 EBITDA margin 11.27% 11.67% 12.81% 13.04%Free float (%) 53.0% Gearing (2010) 190% EBIT margin 8.26% 8.40% 9.30% 9.59%Free float (EUR mn) 370 Sales CAGR 10-13e 9.3% Net profit margin 6.86% 5.97% 6.75% 7.20%Shares outst. (mn) 39.8 EPS CAGR 10-13e 55.2% EPS (EUR) 2.66 2.50 2.88 3.19


Performance 1M 3M 6M 12MAbsolute (EUR terms) -4.7% -21.5% -35.2% -17.6%Rel. to sector (EUR, ppt) 11.7 -2.2 -18.4 -28.1Rel. to universe (EUR, ppt) 5.2 -6.6 -24.0 -11.3

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voestalpine Buy Target price EUR 41.0Price (EUR) 26.4 ROCE 2010 9.1% 10 11e 12e 13e

ROE 2010 15.0% Sales (EUR mn) 10,953.7 11,848.5 12,141.1 12,342.6Mcap (EUR mn) 4,451 Net debt (EURmn, 10) 3,564 EBITDA margin 14.66% 14.80% 15.14% 15.63%Free f loat (%) 66.0% Gearing (2010) 76% EBIT margin 8.99% 9.78% 10.33% 10.99%Free f loat (EUR mn) 2,937 Sales CAGR 10-13e 9.6% Net profit margin 5.43% 6.32% 6.91% 7.62%Shares outst. (mn) 168.6 EPS CAGR 10-13e 67.3% EPS (EUR) 3.04 3.95 4.48 5.08


Performance 1M 3M 6M 12MAbsolute (EUR terms) -26.1% -23.9% -20.2% 7.7%Rel. to sector (EUR, ppt) -9.7 -4.5 -3.4 -2.8Rel. to universe (EUR, ppt) -16.2 -9.0 -9.0 13.9

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Sector Insight Chemicals


– Ege Gubre shows strong 2Q11 top line growth, weak margins in fertilizer segment – Bagfas’ 2Q11 top line boosted by seasonal shift in domestic demand and exports – Buy on Lenzing confirmed despite lower target price of EUR 104.9 – Semperit surprised with higher margins – PannErgy: Preparing for its own drilling

Ege Gubre increased sales by 41% to TRY 45.1mn in 2Q11, from TRY 32.0mn in 2Q10. Despite strong growth top line growth, the company announced a loss of TRY -3.3mn in 2Q11 (2Q10: TRY -2.9mn). The weakness in the company’s fertilizer segment continued and it posted a TRY 0.3mn loss in the first half of 2011, in line with our expectations. The company’s EBITDA margin increased to 9.3% in 2Q11, from 8.4% in 2Q10, on the back of port services. In line with our expectations, the weakness in the company’s fertilizer segment continued in 2Q11 and its main activity is shifting to port services.

Bagfas posted a TRY 20.5mn net profit in 2Q11, thus outperforming both the consensus estimate of TRY 15.9mn and our estimate of TRY 16.2mn. The company increased its sales by 69.1% to TRY 94.6mn, considerably up on our and the consensus expectations of TRY 78.4mn and TRY 85.1mn, respectively. The deviation between our sales expectations and reported figures stemmed from domestic sales, where the company registered an increase of 92% to TRY 49.1mn in 2Q11 from, TRY 25.5mn in 2Q10. In our view, the seasonal shift from 1Q to 2Q is the key factor behind the domestic sales increase. On the other hand, exports rose, in line with our expectations, to TRY 45.6mn, basically in line with our estimate of TRY 45mn. Parallel to the top line growth, Bagfas tripled its net profit y/y to TRY 20.5mn in 2Q11 from TRY 6.8mn in 2Q10. In addition to the top-line growth, the decline in OPEX helped the company reach a positive bottom line. Meanwhile, OPEX decreased to TRY 5.68mn in 2Q11 from TRY 8.48mn in 1Q11. In our view, the export trend will be the key driver of performance for the remainder of the year.

Based on increasing uncertainty regarding the global economic outlook, we have lowered our EPS estimates for Lenzing (2012 & 2013). We therefore lower our target price to EUR 104.9. Due to Lenzing’s outstanding growth prospects, we have confirmed our Buy recommendation. Based on Lenzing’s strong operating performance in 2Q11 and management’s optimistic guidance (targeting an EBITDA between EUR 470-500mn for FY11), we raised our FY11 EPS estimate by 5.5% to EUR 9.43. With regard to 2012, we decided to lower our expectations somewhat. The main reason is a possible economic slowdown in 2012. We have thus decided to lower our FY12 EPS estimate by 16.4% to EUR 7.85 (from EUR 9.39). Lenzing’s standard viscose textile fiber sales prices already suffered somewhat in 2Q11 (-4.0% q/q). However, the specialty fibers Modal and Tencel posted a further sales price increases of 3-9%, despite weaker cotton price development. he recent market turmoil has raised concerns regarding the economic outlook for 2012. The key question right now for investors is what to expect from Lenzing in the event of a slowdown or a recession. In 2009, Lenzing’s EBIT dropped by 37% from peak levels in 2007. A similar development right now (which we would consider the worst-case scenario) would boil down to an EPS level of around EUR 5.50. Due to the ‘Cellulosic Gap’, global demand for cellulosic fiber is expected to rise fourfold by 2030. We therefore believe that Lenzing, as the global market leader for cellulosic fiber, has a very attractive secular growth story to offer. Thanks to Lenzing’s strong competitive position, we believe that this expected growth will be value-enhancing for Lenzing shareholders.

Semperit presented its 1H11 figures, with sales revenues rising by 23% y/y to EUR 406mn. Some 14% of the increase was related to higher prices, while around 9% was due to volume growth. The operating result improved by 9% y/y, to EUR 41.8mn, with an EBIT margin of 10.3% (after 11.6% in 1H10 and 9.3% in 1Q11). The fact that Semperit was able to lift the EBIT margin back above the 10% mark came as a surprise to us, as we reckoned on further pressure on margins due to high material costs. Hence, the operating result came in slightly above our estimates. The company pointed to its active raw material management and its flexibility as influential factors. The net result increased by 16% y/y to EUR 25.5mn, a touch above our estimate.

In terms of segments, the Sempermed division recorded a revenue increase of 17% y/y to EUR 179.2mn. This was mainly due to higher selling prices, while the increased capacities could not fully be utilized, due to a rise in the use of synthetic rubber. The operating result, however, declined slightly (by 4% y/y) to EUR 19.4mn. Management said that it still sees some pressure on margins. Semperflex revenues surged almost 41% y/y to EUR 97.6mn. EBIT came in at EUR 15.6mn (+57% y/y). The division reported an excellent order situation for hydraulic hoses until the end of the year. Semperform and Sempertrans division also registered favorable top line



growth, amounting to 15% and 23%, respectively. Both divisions contributed to the company’s improved EBIT line (EUR 3.4mn and EUR 3.2mn, respectively).

The outlook for the second half of the current fiscal year is mixed. The company reported an excellent order situation in the cyclical divisions, but intensified price competition in the Sempermed division. In addition, the company is facing a scheduled maintenance-related standstill at the Wimpassing plant (3-4 weeks). Hence, Semperit expects sales in the second half of the current fiscal year to come in below the level of the first half. We therefore have to cut our sales estimates and consequently our EPS forecasts (although to a lesser extent).

The company also presented its investment pipeline. Semperit plans to spend some EUR 45mn in the next two years. EUR 35mn is earmarked for production facilities in the Sempermed division. The company’s aim is to raise its global market share in examination gloves from the current 8% to 12% by 2015. Semperit also intends to improve its market share in surgical gloves to 8% (from 7% now). Further capacity expansions are planned for the industrial divisions, i.e., the company aims to become the no. 2 player in the global hydraulic hoses market and no. 1 in the European industrial hoses market.

We keep our positive stance on the share. However, we will have to include an overall weaker economic scenario in our next update. The Semperit share offers an attractive mix of non-cyclical and cyclical businesses. The company’s balance sheet is still in excellent shape, with a net cash position which could be used for further acquisitions in a downturn scenario, according to the management conference call. The dividend payout ratio of more than 50% should also attract investor interest from our point of view.

PannErgy published results that were in line with our expectations. It also announced that two of the four competition offices had approved the deal with US-based private equity firm Sun Capital Partners on the sale of its plastics arm. In an effort to accelerate its drilling activity, PannErgy purchased a 100% stake in its partner DoverDrill Ltd. The purchase price was under the book value of the equity (HUF 159mn). We therefore consider the deal to be a value-creative transaction, especially as the EBIT of the drilling firm was around HUF 100mn in 2010. On the other hand, the size of the deal is too small enough to have any significant impact on PannErgy’s share price. After the closing of the deal with Sun Capital Partners, the incoming HUF 5bn in cash will allow the company to accelerate its geothermal business development, although the remaining two approvals from the competition authorities are still important. These green lights are expected to be received soon.

Petkim 2Q11 profitability trails forecasts. Petkim’s 2Q11 figures were below our expectations and the market consensus (from CNBC-e). Net income came in at TRY 31mn, lagging forecasts (consensus: TRY 40mn). Sales increased 38% y/y to TRY 989mn and thus beat the market consensus of TRY 969mn, while clearly topping our TRY 790mn estimate. We had anticipated that maintenance shutdowns in the quarter would burden the top line. In our view, the y/y growth came from higher petrochemicals prices, as well as higher capacity utilization. Gross profit was reported at TRY 78mn, rising just 4% y/y, while retreating 33% against the previous quarter. Similarly, EBIT decreased 52% from 1Q11 to TRY 42mn (-11% y/y) and could not reach our estimate of TRY 47mn. The market environment was still very friendly in 2Q11, with petrochemicals margins remaining wide, as prices settled at a high level. The bottom line came in at TRY 31mn (-31% y/y), while our projection was TRY 35mn and that of the market was TRY 40mn.

Downward adjustments in estimates and target price likely, skeptical long-term view still valid. Petkim’s profitability proved a bit worse than what we had envisioned. The results were substantially weaker than the 1Q figures, which, we suspect, were boosted by significant inventory gains. It is a bit disappointing, as the market environment for petrochemicals producers was still very friendly in 2Q. From today’s perspective, it appears as if Petkim will not manage to reach our full-year estimates; thus, adjustments in the near future are likely. Despite fears of an economic slowdown across the globe resurfacing, there is no indication of diminishing petrochemicals demand in Turkey yet. However, a collapse of raw material and petrochemicals prices could lead to substantial inventory losses, which certainly is a risk for Petkim. As we will adjust our forecasts, it is quite possible that the target price will follow. Therefore, we are hesitant to advise investors to step in, even at the currently diminished price level. Our skeptical long term-view remains valid, as we believe that the (still) elevated level of naphtha prices could create a real competitive disadvantage for naphtha-based producers (such as Petkim) compared to those petrochemicals producers using cheap natural gas.




Bagfas TRY 176.7 32% 27.5% 27.2% 27.6% 22.5% 22.6% 21.6% 18.9% -10.7% -15.0% -20.2% -4.8%Ciech S.A. PLN 172.5 3% -2.7% 8.4% 7.2% 9.7% 7.6% 10.4% 4.3% -32.2% -49.7% -50.3% -43.2%Ege Gubre TRY 64.7 19% 8.2% 18.5% 22.1% 16.2% 8.3% 14.6% 16.4% -20.5% -34.6% -35.7% -19.9%Gubre Fabrikalari TRY 386.7 33% 22.9% 23.0% 21.6% 29.0% 22.0% 21.1% 16.6% -18.4% -29.8% -25.8% -25.8%Lenzing EUR 2,185.1 26% 29.1% 19.7% 21.3% 18.6% 21.9% 20.4% 17.3% -2.6% -20.5% -7.5% 75.9%PannErgy HUF 44.7 0% 3.9% 4.0% 4.6% 12.5% 13.7% 14.0% 6.2% -11.3% -23.9% -22.8% -10.7%Pegas NW EUR 175.2 17% 19.1% 17.5% 15.1% 23.8% 20.7% 20.2% 12.9% -0.6% 3.9% 5.8% 9.6%Petkim TRY 934.4 9% 12.5% 10.8% 10.7% 6.4% 7.7% 7.3% 5.4% -10.8% -15.6% -9.5% -16.9%Semperit EUR 631.5 14% 15.0% 16.2% 16.3% 16.0% 15.5% 15.4% 11.7% -10.1% -16.8% -21.1% 15.0%Synthos PLN 1,528.7 26% 38.9% 34.0% 24.1% 18.2% 25.5% 26.3% 20.9% -20.1% -13.9% 6.0% 123.5%ZA Pulawy S.A. PLN 454.1 0% 4.9% 5.3% 7.3% 3.0% 7.9% 8.3% 6.0% -8.6% -26.4% -15.8% 22.1%ZCh Police S.A. PLN 240.1 13% 23.9% 8.9% 9.0% 8.3% 9.8% 5.7% 3.5% 12.8% -7.9% 28.7% 123.5%Median CEE - - 17% 15% 18% 16% 16% 16% 15% 13% - - - -EuroStoxx Chemicals - 211,276 16% 18% 17% 16% 17% 17% 17% 17% -8.1% -21.7% -21.9% -4.3%CEE to Peer, Prem/Disc - 6% -16% 0% -1% -7% -8% -11% -25% - - - -


2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eBagfas 10.2 7.9 8.1 7.7 7.0 6.7 6.9 6.4 2.9 2.3 2.2 2.1Ciech S.A. 29.1 nm 6.4 6.9 2.5 3.6 2.1 2.1 0.7 0.6 0.5 0.5Ege Gubre 14.3 17.2 7.5 5.2 11.5 11.4 6.2 4.5 2.4 1.5 1.3 1.1Gubre Fabrikalari 11.6 8.2 8.4 8.3 5.5 4.8 5.0 5.0 3.2 2.0 1.9 1.7Lenzing 13.5 8.7 10.5 8.3 7.6 6.0 6.3 5.2 3.2 2.2 1.9 1.6PannErgy nm 31.9 26.4 22.3 15.8 8.8 8.3 7.8 1.7 1.0 0.9 0.9Pegas NW 8.2 6.8 6.8 7.3 4.7 4.9 4.6 4.6 1.3 1.2 1.1 1.1Petkim 17.7 9.9 11.7 11.4 11.3 7.0 8.5 8.3 1.5 1.3 1.2 1.2Semperit 17.9 11.8 10.4 9.6 10.9 7.2 6.5 6.0 2.3 1.8 1.6 1.5Synthos 8.6 6.3 5.4 6.0 6.7 5.4 4.8 5.2 1.9 2.1 1.6 1.3ZA Pulawy S.A. nm 22.6 20.3 14.2 23.5 10.7 9.9 8.1 1.2 1.1 1.1 1.0ZCh Police S.A. 7.8 6.4 15.1 13.7 3.9 4.4 7.0 6.6 1.0 1.4 1.3 1.2Median CEE 13.5 8.7 8.3 8.0 7.3 6.3 6.3 5.1 2.1 1.4 1.3 1.1EuroStoxx Chemicals 13.6 12.1 10.7 9.7 8.7 8.5 7.2 6.4 2.7 2.3 2.0 1.7CEE to Peer, Prem/Disc -1% -28% -23% -17% -16% -26% -13% -20% -22% -40% -36% -33%

2010 2011e 2012e 2013e 2010 2011e 2012e 2013eBagfas 1.4 1.0 1.0 0.9 6.4 4.6 4.6 4.2Ciech S.A. 0.5 0.4 0.4 0.3 5.4 4.7 3.5 3.4Ege Gubre 1.7 1.0 0.9 0.7 10.6 11.9 6.0 3.9Gubre Fabrikalari 1.5 0.8 0.8 0.7 5.2 3.5 3.6 3.6Lenzing 1.5 1.2 1.2 1.1 7.9 5.3 5.9 4.8PannErgy 1.4 1.2 1.1 1.1 11.3 8.6 8.0 7.4Pegas NW 1.8 1.6 1.4 1.3 7.5 7.6 6.8 6.9Petkim 0.8 0.5 0.6 0.5 12.2 7.0 7.7 7.4Semperit 1.0 0.7 0.6 0.6 6.3 4.6 4.1 3.8Synthos 1.1 1.1 0.8 0.7 5.9 4.3 3.2 3.0ZA Pulawy S.A. 0.8 0.8 0.7 0.7 27.5 9.5 8.9 7.1ZCh Police S.A. 0.4 0.4 0.4 0.4 4.8 4.5 7.2 6.0Median CEE 1.5 1.0 0.9 0.8 7.7 6.2 5.9 4.5EuroStoxx Chemicals 1.1 0.9 0.9 0.8 6.4 5.8 5.1 4.8CEE to Peer, Prem/Disc 36% 7% 8% 3% 20% 6% 16% -6%

P/CE P/BV

EV/Sales EV/EBITDA

P/E

*PannErgy is in transition, turning itself into an alternative energy/utility company. For the time being its plastic business is still dominant, while energy activities are in progress. Valuation based on the utility aspect might distort the comparison to other chemical sector peers; Source: JCF Quant, Erste Group Research



Bagfas Accumulate Target price TRY 178.5Price (TRY) 145.0 ROCE 2010 43.4% 10f 11e 12e 13eMcap (TRY mn) 435 ROE 2010 31.6% Sales (TRY mn) 279.8 304.3 335.0 352.1Mcap (EUR mn) 177 Net debt (EURmn, 10) -39.0 EBITDA margin 22.54% 22.58% 21.57% 18.91%Free f loat (%) 59.6% Gearing (2010) -46% EBIT margin 18.82% 19.68% 18.85% 18.91%Free f loat (EUR mn) 105 Sales CAGR 10-13e 7.1% Net profit margin 16.79% 16.67% 15.96% 16.08%Shares outst. (mn) 3.0 EPS CAGR 10-13e #ZAHL! EPS (TRY) 15.66 16.91 17.82 18.87


Performance 1M 3M 6M 12MAbsolute (TRY terms) -8.2% -8.8% -11.9% -11.9%Rel. to sector (EUR, ppt) -1.6 2.0 -13.6 -47.1Rel. to universe (EUR, ppt) -0.8 -0.1 -9.0 1.4

Ciech S.A. Hold Target price PLN 25.1Price (PLN) 13.6 ROCE 2010 1.9% 10 11e 12e 13eMcap (PLN mn) 717 ROE 2010 2.5% Sales (PLN mn) 3,960.3 4,160.4 4,254.1 4,481.3Mcap (EUR mn) 173 Net debt (EURmn, 10) 362.5 EBITDA margin 9.71% 7.64% 10.37% 4.30%Free f loat (%) 79.9% Gearing (2010) 168% EBIT margin 3.71% 2.37% 4.89% 4.30%Free f loat (EUR mn) 138 Sales CAGR 10-13e 5.0% Net profit margin 0.52% -0.67% 2.64% 2.31%Shares outst. (mn) 52.7 EPS CAGR 10-13e #ZAHL! EPS (PLN) 0.74 -0.53 2.13 1.97

Dividend/share (PLN) 0.00 0.00 0.00 0.00EV/sales 0.53 0.36 0.36 0.32EV/EBITDA 5.40 4.67 3.49 3.35P/E 29.07 nm 6.38 6.92P/CE 2.48 3.57 2.08 2.12P/BV 0.72 0.56 0.52 0.48Dividend yield 0.00% 0.00% 0.00% 0.00%EV/EBITDA rel. 0.7 0.8 0.6 0.7P/E rel. 2.2 - 0.8 0.9


Ege Gubre Accumulate Target price TRY 107Price (TRY) 79.3 ROCE 2010 14.1% 10 11e 12e 13eMcap (TRY mn) 3,852 ROE 2010 18.8% Sales (TRY mn) 174.1 196.7 221.0 241.4Mcap (EUR mn) 65 Net debt (EURmn, 10) 29.0 EBITDA margin 16.20% 8.30% 14.64% 16.42%Free f loat (%) 19.2% Gearing (2010) 59% EBIT margin 13.74% 6.14% 12.67% 16.42%Free f loat (EUR mn) 740 Sales CAGR 10-13e 7.3% Net profit margin 9.61% 4.32% 9.56% 12.57%Shares outst. (mn) 2.0 EPS CAGR 10-13e #ZAHL! EPS (TRY) 8.36 4.25 10.56 15.17



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Gubre Fabrikalari Buy Target price TRY 16.30Price (TRY) 11.40 ROCE 2010 23.3% 10f 11e 12e 13eMcap (TRY mn) 952 ROE 2010 33.5% Sales (TRY mn) 1,385.5 1,866.1 1,999.9 2,128.7Mcap (EUR mn) 385 Net debt (EURmn, 10) 180.9 EBITDA margin 29.02% 21.96% 21.12% 16.56%Free f loat (%) 34.1% Gearing (2010) 46% EBIT margin 23.75% 18.13% 17.63% 16.56%Free f loat (EUR mn) 131 Sales CAGR 10-13e 19.5% Net profit margin 17.68% 11.70% 11.62% 11.04%Shares outst. (mn) 83.5 EPS CAGR 10-13e EPS (TRY) 1.44 1.28 1.36 1.38



Lenzing Buy Target price EUR 104.9Price (EUR) 85.0 ROCE 2010 16.7% 10 11e 12e 13eMcap (EUR mn) 2,257 ROE 2010 25.9% Sales (EUR mn) 1,766.3 2,162.6 2,209.9 2,330.3Mcap (EUR mn) 2,257 Net debt (EURmn, 10) 368 EBITDA margin 18.62% 21.95% 20.43% 17.29%Free f loat (%) 32.4% Gearing (2010) 50% EBIT margin 12.91% 16.92% 14.57% 17.29%Free f loat (EUR mn) 731 Sales CAGR 10-13e 16.7% Net profit margin 9.83% 11.98% 9.96% 11.95%Shares outst. (mn) 26.6 EPS CAGR 10-13e -13% EPS (EUR) 6.45 9.43 7.85 9.93


Performance 1M 3M 6M 12MAbsolute (EUR terms) -0.4% -17.0% -4.3% -4.3%Rel. to sector (EUR, ppt) 3.6 -15.4 -11.8 24.1Rel. to universe (EUR, ppt) 2.3 -8.7 0.5 81.4

PannErgy Buy Target price HUF 1228.0Price (HUF) 694.0 ROCE 2010 3.5% 10 11e 12e 13eMcap (HUF mn) 12,305 ROE 2010 0.2% Sales (HUF mn) 15,193.7 13,482.3 14,070.7 14,690.6Mcap (EUR mn) 45 Net debt (EURmn, 10) 15 EBITDA margin 12.48% 13.68% 14.00% 6.17%Free f loat (%) 66.2% Gearing (2010) 41% EBIT margin 4.97% 5.19% 5.72% 6.17%Free f loat (EUR mn) 30 Sales CAGR 10-13e 3.8% Net profit margin 0.40% 3.37% 3.94% 4.45%Shares outst. (mn) 17.7 EPS CAGR 10-13e 154% EPS (HUF) 0.89 21.31 26.13 30.90

Dividend/share (HUF) 0.00 0.00 0.00 0.00EV/sales 1.41 1.20 1.13 1.06EV/EBITDA 11.29 8.74 8.09 7.46P/E nm 32.29 26.56 22.46P/CE 15.76 8.89 8.35 7.82P/BV 1.71 0.98 0.94 0.90Dividend yield 0.00% 0.00% 0.00% 0.00%EV/EBITDA rel. 1.5 1.4 1.3 1.6P/E rel. - 3.6 3.2 2.8


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Pegas NW Accumulate Target price EUR 500.0Price (EUR) 459.0 ROCE 2010 9.3% 10 11e 12e 13eMcap (EUR mn) 175 ROE 2010 17.4% Sales (EUR mn) 148.2 177.3 208.7 239.5Mcap (EUR mn) 175 Net debt (EURmn, 10) 92 EBITDA margin 23.77% 20.71% 20.19% 12.93%Free f loat (%) 74.6% Gearing (2010) 71% EBIT margin 12.73% 14.98% 14.20% 12.93%Free f loat (EUR mn) 131 Sales CAGR 10-13e 18.0% Net profit margin 14.20% 14.50% 12.33% 10.02%Shares outst. (mn) 9.2 EPS CAGR 10-13e 4% EPS (EUR) 2.28 2.78 2.79 2.60


Performance 1M 3M 6M 12MAbsolute (EUR terms) -0.5% 2.5% 5.1% 5.1%Rel. to sector (EUR, ppt) 8.5 20.9 12.5 -32.8Rel. to universe (EUR, ppt) 9.3 18.8 17.1 15.8

Petkim Hold Target price TRY 2.4Price (TRY) 2.3 ROCE 2010 8.2% 10 11e 12e 13eMcap (TRY mn) 2,300 ROE 2010 8.9% Sales (TRY mn) 2,909.4 3,644.9 3,778.1 4,006.5Mcap (EUR mn) 934 Net debt (EURmn, 10) -12 EBITDA margin 6.41% 7.68% 7.27% 5.37%Free f loat (%) 38.7% Gearing (2010) -2% EBIT margin 4.37% 5.79% 5.41% 5.37%Free f loat (EUR mn) 361 Sales CAGR 10-13e 18.1% Net profit margin 4.47% 5.86% 5.22% 5.02%Shares outst. (mn) 1,000.0 EPS CAGR 10-13e 15% EPS (TRY) 0.13 0.21 0.20 0.20


Performance 1M 3M 6M 12MAbsolute (TRY terms) -8.4% -9.4% 0.0% 0.0%Rel. to sector (EUR, ppt) -1.7 1.4 -2.9 -59.2Rel. to universe (EUR, ppt) -0.9 -0.7 1.7 -10.6

Semperit Accumulate Target price EUR 45.0Price (EUR) 30.7 ROCE 2010 14.6% 10p 11e 12e 13e

ROE 2010 13.7% Sales (EUR mn) 689.4 859.4 938.9 997.9Mcap (EUR mn) 632 Net debt (EURmn, 10) -105 EBITDA margin 15.95% 15.54% 15.45% 11.70%Free f loat (%) 49.0% Gearing (2010) -30% EBIT margin 11.70% 11.80% 11.70% 11.70%Free f loat (EUR mn) 309 Sales CAGR 10-13e 14.1% Net profit margin 6.45% 8.93% 8.87% 8.88%Shares outst. (mn) 20.6 EPS CAGR 10-13e 14% EPS (EUR) 2.21 2.59 2.94 3.19


Performance 1M 3M 6M 12MAbsolute (EUR terms) -10.1% -16.8% -21.1% -21.1%Rel. to sector (EUR, ppt) -1.0 0.2 -14.5 -27.4Rel. to universe (EUR, ppt) -0.2 -1.9 -9.8 21.2

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Synthos Accumulate Target price PLN 5.9Price (PLN) 4.8 ROCE 2010 21.4% 10 11e 12e 13eMcap (PLN mn) 6,352 ROE 2010 25.6% Sales (PLN mn) 3,860.7 5,182.0 5,988.5 5,913.0Mcap (EUR mn) 1,529 Net debt (EURmn, 10) 16 EBITDA margin 18.20% 25.47% 26.30% 20.85%Free f loat (%) 37.5% Gearing (2010) 3% EBIT margin 14.65% 22.64% 23.63% 20.85%Free f loat (EUR mn) 574 Sales CAGR 10-13e 22.8% Net profit margin 12.35% 18.73% 19.66% 17.79%Shares outst. (mn) 1,323.3 EPS CAGR 10-13e 59% EPS (PLN) 0.36 0.73 0.89 0.79


Performance 1M 3M 6M 12MAbsolute (PLN terms) -17.0% -9.6% 10.9% 10.9%Rel. to sector (EUR, ppt) -11.0 3.1 12.6 81.2Rel. to universe (EUR, ppt) -10.2 1.0 17.2 129.8

ZA Pulawy S.A. Hold Target price PLN 70.1Price (PLN) 98.7 ROCE 2010 -0.2% 10e 11e 12e 13eMcap (PLN mn) 1,887 ROE 2010 0.0% Sales (PLN mn) 1,998.5 2,320.2 2,523.2 2,752.3Mcap (EUR mn) 454 Net debt (EURmn, 10) -45 EBITDA margin 3.04% 7.91% 8.26% 5.98%Free f loat (%) 34.2% Gearing (2010) -12% EBIT margin -0.89% 4.06% 4.48% 5.98%Free f loat (EUR mn) 155 Sales CAGR 10-13e 3.5% Net profit margin 0.03% 3.44% 3.61% 4.84%Shares outst. (mn) 19.1 EPS CAGR 10-13e -9% EPS (PLN) 0.03 4.17 4.76 6.97

Dividend/share (PLN) 8.15 0.00 1.04 1.19EV/sales 0.84 0.75 0.74 0.68EV/EBITDA 27.51 9.49 8.92 7.08P/E nm 22.62 20.25 14.16P/CE 23.46 10.67 9.89 8.08P/BV 1.17 1.07 1.07 1.01Dividend yield 8.38% 0.00% 1.08% 1.21%EV/EBITDA rel. 3.6 1.5 1.5 1.6P/E rel. - 2.6 2.5 1.8

Performance 1M 3M 6M 12MAbsolute (PLN terms) -5.1% -22.8% -12.0% -12.0%Rel. to sector (EUR, ppt) 0.4 -9.5 -9.2 -20.3Rel. to universe (EUR, ppt) 1.3 -11.5 -4.6 28.3

ZCh Police S.A. Sell Target price PLN 10.3Price (PLN) 13.3 ROCE 2010 9.4% 10 11e 12e 13eMcap (PLN mn) 998 ROE 2010 13.4% Sales (PLN mn) 2,022.6 2,428.9 2,654.2 2,748.3Mcap (EUR mn) 240 Net debt (EURmn, 10) 59 EBITDA margin 8.28% 9.79% 5.70% 3.47%Free f loat (%) 31.8% Gearing (2010) 42% EBIT margin 4.60% 6.82% 2.84% 3.47%Free f loat (EUR mn) 76 Sales CAGR 10-13e 16.6% Net profit margin 3.54% 6.09% 2.46% 2.64%Shares outst. (mn) 75.0 EPS CAGR 10-13e #ZAHL! EPS (PLN) 0.97 1.98 0.88 0.97


Performance 1M 3M 6M 12MAbsolute (PLN terms) 17.2% -3.3% 34.6% 34.6%Rel. to sector (EUR, ppt) 21.9 9.1 35.3 81.2Rel. to universe (EUR, ppt) 22.7 7.0 39.9 129.8

52 weeks

1,52,02,53,03,54,04,55,05,56,0

Synthos WIG (Rebased) DJ STOXX Chemicals (Rebased)

52 weeks

4

6

8

10

12

14

16

ZCh Po lice S.A.DJ EURO STOXX Chemic als (Rebas ed)W IG (Rebas ed)

52 weeks

60

70

80

90

100

110

120

130

ZA Pulawy S.A. DJ EURO STOXX Chemicals (Rebased)

Sector Insight Construction


– Lows in construction output reached, but outlook remains weak – Wienerberger – 2Q unspectacular, share prices below EUR 10 attractive – STRABAG continues healthy growth in 2Q11 and keeps positive outlook – Cimsa: Strong margin recovery assists 2Q bottom line – Akcansa: Lower top line, higher energy prices still pressuring margins – Teraplast 1H11 results hurt by delayed recovery of construction market

Construction recovery hampered by international debt crisis and weak set of macro data Supported by milder temperatures in January/February – particularly in Germany – seasonally-adjusted production in the EU27 rose 0.4% y/y in 1Q11, but turned lower again, by 2.8% y/y, in 2Q11. In June 2011, construction output fell 1.8% in the Euro Area (EA17) and 1.3% in the EU27, compared with the previous month. Compared with June 2010, output dropped by 11.3% in the Euro Area and 8.1% in the EU27. Among the member states for which data is available for June 2011, construction output fell in ten and rose in four. The highest increases were registered in Poland (+16.2%), Sweden (+4.5%) and Germany (+2.6%) and the largest decreases were in Spain (-43.7%), Slovenia (-35.9%), Hungary (-13.9%) and Romania (-10.0%). Euroconstruct expects that the construction low has been passed, but growth will be hampered by the international debt crisis. Pressure on governments to cut expenditure threatens to delay public investment in the civil engineering sub-sector. In the most severely hit residential construction sector, the volume of new housing construction is forecast to grow slightly under 5% in 2011. Non-residential construction lags behind economic trends and is not expected to grow until 2012. A weak set of macroeconomic data from Europe, North America, Japan and China, as well as a heightened focus on public debt, poses serious threats to construction recovery, in our view, particularly for non-residential construction and civil engineering. Business expectations by the German construction industry collected by the IFO institute declined sharply, from 4.6 in June 2011, to -4.8 in August 2011.

Wienerberger sees no signs of slowdown when reporting unspectacular 2Q11 results The Wienerberger 2Q11 results were in line with our expectations. After 1Q11 revenue growth (+41.3%) was boosted by milder weather conditions, revenue growth slowed to 8% in 2Q11 – the increase was driven by recovering volume demand in the important markets of Germany, Poland, Belgium and France, positive consolidation effects and recent price increases. 2Q11 adjusted EBIT increased 20% to EUR 63.4mn and the 2Q EBIT-margin also improved 100bp, due to price increases and higher volumes. The average price effect on group level turned from -1% in 1Q11 to +1% in 1H11. 2Q11 reported that EBIT (+83% to EUR 96.6mn) includes an extraordinary gain of about EUR 33mn from the stock swap of 50% Bramac (now de-consolidated) for a further 25% of Tondach Gleinstätten (now proportionately consolidated). Net income after minorities (+260% to EUR 74.3mn) was EUR 11mn above our expectations, also helped by a better than expected financial result. Net financial debt, as defined by Wienerberger, remained constant at EUR 530mn, due to the dividend payment and the consolidation of Tondach. Wienerberger expects the trends from 1H11 to continue for the rest of the year in all markets. CEO Scheuch says that, for 2011, he expects a significant improvement in adjusted EBITDA and positive net income – no surprise. Capacity utilization is expected to rise from 60% last year to 65% in 2011. He expects a continuing positive trend in most Western European countries and Poland, Czech Republic and Russia. Hungary, Romania and Bulgaria in the CEE and also North America should remain difficult. Wienerberger expects 2.5-3.0% higher average prices for the full year 2011, which it says will be sufficient to cover 3.5-4% higher costs (mainly energy). Wienerberger is pretty much already through with price increases in all markets and does not see any immediate signs of a trend reversal in any market. Despite all the macroeconomic uncertainties, share prices of below EUR 10 should be good buying opportunities, in our view.

STRABAG posted 2Q11 results above expectations. After top line growth in 1Q11 was boosted by weather effects (output +26% y/y), 2Q11 growth in output volume (+12.7%) and revenue (+14.2%) normalized. Growth was strongest in Germany, Poland and northern Europe. Both the segments Building Construction & Civil Engineering (2Q output +25%) and Transportation Infrastructures (2Q output +11%) surprised us on the upside. The order backlog declined 2% q/q and 6% y/y to EUR 14.88bn (still a decent level), as large-scale projects in Poland are worked off and due to Libyan order cancellations in 1Q11. Operating margins remained roughly unchanged compared to last year, as expected. 2Q11 EBITDA was 10.7% higher at EUR 257mn and EBIT 16.1% higher at EUR 162mn – for the first time in company history, the EBIT break-even was already reached with half-year results (EBIT 1H11: EUR 16.7mn). On the earnings side, the very volatile business of the Special Divisions & Concessions (which includes tunneling) surprised with 151% higher EBIT y/y in 2Q11. 2Q net attributable income remained constant y/y, as last year was helped by an extraordinary positive financial result, while this year



minority interests disappointed (doubled to EUR 19.1mn). The net cash position declined seasonally to EUR 25.1mn, after EUR 269mn at the end of 1Q11 – operating cash flow in 1H11 improved from EUR -407.8mn to EUR -292.2mn. STRABAG left its guidance unchanged and still expects output volume of EUR 14.0bn and EBIT of EUR 320mn in 2011. For 2012, the company assumes an output volume of EUR 14.3bn and EBIT of EUR 330mn. STRABAG is confident that it can more than compensate for the negative effects of austerity packages by recovering private sector demand, expanding activities in property and facility management and niche markets (railway and waterway construction) and spreading geographically.

Ongoing major share buyback program. STRABAG should have no problems achieving its 2011 guidance. STRABAG’s share price is currently supported by the ongoing share buyback program. Between mid-July and August 29, the company bought back a total of 4.77mn shares (4.19% of total shares) via the stock exchange and predominantly OTC, taking any size. Under the program, STRABAG can buy back up to 10% of shares (11.4mn shares) up to a maximum price of EUR 27.115 per share. We believe STRABAG’s share will continue to be supported by the buyback program in the coming months, particularly on the downside. We see moderate upside for the share currently.

Cimsa posted a TRY 43.2mn net profit in 2Q11, better than the consensus estimate of TRY 39.0mn and our estimate of TRY 28.6mn. The company increased its sales by 10.1% to TRY 234.2mn, which is pretty much in line with our TRY 231.8mn estimate and the consensus of TRY 237mn. The company posted strong margin recovery in 2Q through the stabilization of energy prices. It also increased its gross margin to 26.9% in 2Q from 22.6% in 1Q. Furthermore, the company increased its EBITDA margin to 26.8% in 2Q from 22.5% in 1Q, which is well above our estimate of 21.0%. In addition to better COGS, OPEX figures also registered better than our expectations, marking a key differentiating factor.

Meanwhile, on the top line front, the company posted a strong rise in 2Q, in line with our expectations. The Central Anatolian region showed a strong recovery in 2Q, following a weak 1Q. Accordingly, the company increased its domestic sales by 18% y/y and 68% q/q, respectively. We expect this trend to continue through the contribution of hydroelectric power plant projects in the region in 3Q. On the other hand, exports fell 8% y/y, but rose by 26% q/q, which also helps the top line in 2Q.

Akcansa posted a TRY 29.1mn net profit in 2Q11, below the consensus estimate of TRY 33.4mn and our estimate of TRY 35.8mn. The company increased its sales by 11.1%, to TRY 261.2mn, which is worse than our TRY 276.1mn expectation and the consensus expectation of TRY 269.6mn. The company operates at nearly a 95% CUR and, in our opinion, the 5% deviation between our estimate and the announced top line came from price estimations. We expect the company to increase its prices in 3Q, with the amount of the increase to weigh heavily on margins.

Another key feature of the financials was lower margins when compared to our expectations. The EBITDA margin increased to 17.6% in 2Q11, from 15.1% in 1Q11, which is short of our 19.1% expectation. Despite the stabilization in energy prices in 2Q11, higher prices still pressured margins. In mid-July, the company’s Waste Heat Project came online, creating monthly savings of TRY 1-1.2mn, the effect of which will be seen in 3Q11.

Teraplast delivered a significant loss of RON 4.99mn for the first half of the year, much higher than the RON 1.5mn assumed in our estimates. The operating loss also exceeded our estimate (RON 2mn), reaching RON 4.9mn, mainly due to high provisions for overdue receivables (RON 1.5mn). The Teraplast figures from the first half of the year were affected by the delayed recovery of the Romanian construction market, along with a prolonged receivables collection period on the domestic market. The challenge for the new management team is to substantially increase sales abroad through more favorable payment conditions, as well as the reorganization of sales and distribution on the internal market through more careful customer selection. Management is pursuing growth driven by exports as long as internal demand remains below potential, together with a reduction of the receivables collection period.

Polish construction segment. There was great disappointment in the segment in August - the huge tender for two energy blocks (around 1600-1800 MW) at the Opole power plant (owned by listed PGE) was won by Alstom. Among the losers were Rafako, PBG, Polimex and Mostostal Warszawa. These companies also posted quite weak results for 2Q11. The road contracts are draining money from the firms. Debt is increasing at a swift pace for PBG and Polimex. A positive surprise was reported by Mostostal Warszawa, which saw its performance bottom out earlier. The firm has also managed to finish its troublesome contract with Bogdanka on time.




Akcansa TRY 502.3 7.6% 13.3% 13.6% 14.6% 16.2% 21.9% 22.2% 22.7% -11.4% -17.7% -10.1% -30.8%Berling PLN 17.8 21.6% 18.9% 18.9% 20.4% 16.4% 17.1% 17.1% 17.1% -19.6% -36.0% -39.2% -42.4%Cersanit PLN 347.9 8.8% 7.0% 9.1% 10.6% 16.6% 17.6% 18.6% 19.5% -21.3% -43.5% -48.8% -39.7%Cimsa TRY 387.4 12.1% 12.0% 13.2% 13.8% 25.6% 24.4% 25.5% 26.0% -18.2% -30.1% -28.5% -41.8%CNG PLN 31.3 2.7% 3.9% 5.0% 6.6% 14.2% 15.3% 15.2% 16.0% -11.5% -17.4% -31.2% -23.4%Institut IGH HRK 27.4 1.0% 2.5% 14.1% 14.8% 13.6% 15.7% 14.9% 12.4% -8.2% -30.5% -40.3% -26.0%Mostostal Warszawa PLN 112.5 12.6% 3.0% 4.6% 9.5% 4.6% 1.8% 2.1% 3.6% -22.5% -34.1% -52.5% -64.6%PBG S.A. PLN 323.4 15.1% 10.7% 8.6% 8.5% 11.7% 11.6% 11.8% 11.2% -32.5% -36.4% -53.9% -61.2%Polimex PLN 229.4 8.2% 8.3% 8.2% 8.2% 7.2% 6.3% 5.8% 6.1% -35.9% -43.4% -52.7% -60.7%STRABAG EUR 2,732.0 5.8% 6.1% 6.0% 6.0% 5.9% 5.2% 5.2% 5.2% 18.7% 10.8% 15.3% 41.8%Teraplast RON 28.1 8.2% 8.0% 12.1% 12.0% 11.6% 12.2% -15.8% -22.1% -20.6% -10.6%Trakcja Polska PLN 73.6 8.4% 13.4% 10.9% 9.3% 7.2% 7.0% -30.4% -41.3% -47.8% -58.1%Wienerberger EUR 1,170.0 -3% 2.0% 4.6% 6.8% 12.1% 15.6% 17.1% 18.7% -9.9% -25.3% -35.0% -5.7%Median - - 8% 8% 9% 9% 12% 15% 15% 16% - - - -Median Materials - 58,072 6.7% 6.2% 7.9% 9.4% 15.8% 16.0% 16.8% 13.0% - - - -Median Construction - 58,038 15.8% 14.2% 14.7% 14.4% 8.0% 7.3% 6.9% 7.0% - - - -Median Total - 116,110 13.8% 11.5% 12.5% 13.7% 11.6% 11.9% 12.1% 12.0% - - - -EuroStoxx Construction & Materials

127,730 10.2% 9.7% 11.1% 11.9% 12% 14% 15% 15% -2.8% -6.2% -1.0% 2.2%

CEE to Peer, Prem/Disc - -41% -31% -27% -31% 4% 29% 23% 34% - - - -




2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAkcansa 23.6 9.3 8.7 7.4 11.5 6.4 6.2 5.5 1.7 1.2 1.1 1.0Berling 11.5 6.4 6.3 6.2 10.9 6.0 5.9 5.8 2.0 1.2 1.2 1.3Cersanit 22.5 14.7 10.7 8.5 10.9 6.5 5.6 4.9 1.8 1.0 0.9 0.9Cimsa 12.6 8.2 7.9 7.2 8.7 6.1 6.0 5.6 1.5 1.1 1.0 1.0CNG 34.1 16.0 12.2 8.7 7.6 4.8 4.6 4.0 0.9 0.6 0.6 0.6Institut IGH 51.5 20.1 3.3 2.7 n.m. 2.5 1.9 1.8 0.5 0.5 0.4 0.4Mostostal Warszawa 19.7 29.4 19.4 8.9 17.6 n.m. 6.0 3.3 2.4 0.9 0.9 0.8PBG S.A. 13.7 6.5 6.9 6.8 11.7 5.3 5.8 5.7 1.9 0.6 0.6 0.6Polimex 17.1 7.5 7.3 6.8 9.0 4.8 4.3 4.3 1.4 0.6 0.6 0.5STRABAG 13.4 14.3 13.8 13.2 4.0 4.7 4.5 4.3 0.8 0.8 0.8 0.8Teraplast 8.3 7.3 4.4 4.9 3.8 2.8 0.6 0.6 0.5Trakcja Polska 9.1 5.0 4.8 7.3 3.1 3.2 0.7 0.5 0.5Wienerberger nm 28.9 12.2 7.9 11.7 4.9 3.9 3.3 0.8 0.6 0.6 0.5Median CEE 15.4 9.3 7.9 7.4 9.9 4.9 4.6 4.3 1.4 0.6 0.6 0.8Median Materials 15.8 13.2 9.6 8.6 7.0 6.3 5.5 5.1 1.1 0.9 0.9 0.9Median Construction 11.5 12.9 11.4 10.9 6.4 6.0 7.3 6.7 1.8 1.7 1.6 1.5Median Total 12.9 12.9 10.5 9.8 6.7 6.1 5.9 5.4 1.5 1.4 1.4 1.3EuroStoxx Construction & Materials

13.3 11.6 10.5 9.4 6.4 5.9 5.4 5.0 1.2 1.2 1.2 1.3

CEE to Peer, Prem/Disc 19% -27% -25% -24% 48% -20% -21% -20% -4% -56% -56% -39%

2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAkcansa 2.0 1.2 1.2 1.0 12.1 5.7 5.4 4.6Berling 1.3 0.7 0.7 0.8 8.0 4.1 4.3 4.6Cersanit 2.1 1.2 1.1 1.0 12.5 7.0 6.1 5.2Cimsa 2.0 1.3 1.3 1.3 7.9 5.3 5.2 4.9CNG 1.4 0.9 0.8 0.7 9.9 5.8 5.3 4.3Institut IGH 1.7 1.7 1.6 1.0 12.8 10.9 11.0 7.7Mostostal Warszawa 0.4 0.1 0.1 0.1 7.9 7.1 5.7 2.8PBG S.A. 1.4 0.6 0.7 0.7 12.3 5.3 5.9 5.9Polimex 0.7 0.3 0.3 0.3 9.3 5.2 5.3 4.8STRABAG 0.1 0.2 0.2 0.2 2.5 3.5 3.6 3.6Teraplast 0.7 0.6 0.5 5.6 5.2 4.5Trakcja Polska 0.3 0.4 0.3 3.5 5.4 4.3Wienerberger 1.5 1.1 1.0 0.9 12.6 6.8 5.6 4.6Median CEE 1.4 0.7 0.7 0.8 9.3 5.4 5.3 4.6Median Materials 0.8 0.8 0.7 0.7 7.6 6.5 5.6 4.9Median Construction 0.4 0.4 0.4 0.3 7.1 6.5 6.1 5.6Median Total 0.7 0.7 0.6 0.6 7.3 6.5 6.0 5.2EuroStoxx Construction & Materials

1.2 1.0 0.9 0.9 7.9 6.5 6.1 5.0

CEE to Peer, Prem/Disc 101% 1% 17% 37% 27% -17% -11% -11%

P/CE P/BV

EV/Sales EV/EBITDA

P/E




Akcansa Buy Target price TRY 9.7Price (TRY) 6.5 ROCE 2010 5.8% 10f 11e 12e 13eMcap (TRY mn) 1,236 ROE 2010 7.6% Sales (TRY mn) 817.4 980.8 1,056.4 1,155.6Mcap (EUR mn) 502 Net debt (EURmn, 10) 100.7 EBITDA margin 16.23% 21.87% 22.25% 22.70%Free f loat (%) 20.6% Gearing (2010) 25% EBIT margin 9.52% 16.28% 17.08% 17.94%Free f loat (EUR mn) 103 Sales CAGR 10-13e 13.0% Net prof it margin 7.26% 12.46% 13.50% 14.48%Shares outst. (mn) 191.4 EPS CAGR 10-13e 22.2% EPS (TRY) 0.31 0.64 0.74 0.87


Performance 1M 3M 6M 12MAbsolute (TRY terms) -9.0% -11.7% -0.6% -12.1%Rel. to sector (EUR, ppt) -7.8 -3.3 9.8 -19.1Rel. to universe (EUR, ppt) -1.5 -2.9 1.2 -24.5

Berling Buy Target price PLN 9.0Price (PLN) 4.3 ROCE 2010 24.8% 10 11e 12e 13eMcap (PLN mn) 74 ROE 2010 21.6% Sales (PLN mn) 76.9 84.6 87.1 89.8Mcap (EUR mn) 18 Net debt (EURmn, 10) -3.5 EBITDA margin 16.44% 17.12% 17.11% 17.09%Free f loat (%) 29.9% Gearing (2010) -25% EBIT margin 15.78% 16.20% 16.20% 16.20%Free f loat (EUR mn) 5 Sales CAGR 10-13e 8.6% Net prof it margin 11.87% 13.04% 13.46% 13.31%Shares outst. (mn) 17.4 EPS CAGR 10-13e 2.5% EPS (PLN) 0.57 0.63 0.67 0.69



Cersanit Hold Target price PLN 9.0Price (PLN) 6.7 ROCE 2010 4.8% 10 11e 12e 13eMcap (PLN mn) 1,445 ROE 2010 8.8% Sales (PLN mn) 1,532.5 1,754.1 1,872.0 1,958.0Mcap (EUR mn) 348 Net debt (EURmn, 10) 213.2 EBITDA margin 16.61% 17.58% 18.64% 19.53%Free f loat (%) 51.4% Gearing (2010) 64% EBIT margin 9.34% 10.87% 12.04% 13.16%Free f loat (EUR mn) 179 Sales CAGR 10-13e 8.5% Net prof it margin 6.79% 5.38% 7.22% 8.71%Shares outst. (mn) 216.4 EPS CAGR 10-13e 63.0% EPS (PLN) 0.48 0.44 0.62 0.79

Dividend/share (PLN) 0.00 0.00 0.00 0.00EV/sales 2.08 1.23 1.13 1.01EV/EBITDA 12.55 6.99 6.09 5.16P/E 22.52 14.66 10.69 8.47P/CE 10.85 6.53 5.59 4.90P/BV 1.76 1.02 0.93 0.86Dividend yield 0.00% 0.00% 0.00% 0.00%EV/EBITDA rel. 1.3 1.3 1.1 1.1P/E rel. 1.5 1.6 1.4 1.1Performance 1M 3M 6M 12MAbsolute (PLN terms) -18.2% -40.7% -46.5% -36.8%Rel. to sector (EUR, ppt) -17.7 -29.1 -29.0 -28.0Rel. to universe (EUR, ppt) -11.4 -28.6 -37.6 -33.4

52 weeks

456789

1011121314

CersanitWIG (Rebased)DJ EURO STOXX Construction & Material (Rebased)

52 weeks

3,54,04,55,05,56,06,57,07,58,08,5

Berling WIG (Rebased) DJ EURO STOXX Retail (Rebased)

52 weeks

6,0

6,5

7,0

7,5

8,0

8,5

9,0

9,5

AkcansaISE 100 (Rebased)DJ EURO STOXX Construc tion & Materia l (Rebased)



Cimsa Accumulate Target price TRY 11.9Price (TRY) 7.1 ROCE 2010 11.0% 10f 11e 12e 13eMcap (TRY mn) 954 ROE 2010 12.1% Sales (TRY mn) 708.5 766.8 807.3 854.0Mcap (EUR mn) 387 Net debt (EURmn, 10) 58.3 EBITDA margin 25.58% 24.38% 25.49% 26.02%Free f loat (%) 32.1% Gearing (2010) 14% EBIT margin 20.60% 19.73% 20.99% 21.63%Free f loat (EUR mn) 124 Sales CAGR 10-13e 8.6% Net prof it margin 14.62% 13.93% 14.94% 15.48%Shares outst. (mn) 135.1 EPS CAGR 10-13e 5.1% EPS (TRY) 0.77 0.79 0.89 0.98



CNG Buy Target price PLN 3.0Price (PLN) 2.3 ROCE 2010 1.9% 10 11e 12e 13eMcap (PLN mn) 130 ROE 2010 2.7% Sales (PLN mn) 177.2 204.6 220.7 236.8Mcap (EUR mn) 31 Net debt (EURmn, 10) 17 EBITDA margin 14.18% 15.29% 15.19% 16.04%Free f loat (%) 81.0% Gearing (2010) 34% EBIT margin 3.81% 6.52% 7.22% 8.61%Free f loat (EUR mn) 25 Sales CAGR 10-13e 9.4% Net prof it margin 3.00% 3.82% 4.82% 6.31%Shares outst. (mn) 57.0 EPS CAGR 10-13e 29.9% EPS (PLN) 0.09 0.14 0.19 0.26


Institut IGH Accumulate Target price HRK 2427.0Price (HRK) 1,295.0 ROCE 2010 1.5% 10F 11e 12e 13eMcap (HRK mn) 205 ROE 2010 1.0% Sales (HRK mn) 490.2 502.0 553.5 893.3Mcap (EUR mn) 27 Net debt (EURmn, 10) 90 EBITDA margin 13.65% 15.66% 14.90% 12.41%Free f loat (%) 87.0% Gearing (2010) 165% EBIT margin 8.33% 7.28% 7.18% 8.42%Free f loat (EUR mn) 24 Sales CAGR 10-13e 5.9% Net prof it margin 0.85% 2.01% 11.16% 10.37%Shares outst. (mn) 0.2 EPS CAGR 10-13e 62.8% EPS (HRK) 24.48 63.57 391.22 473.07

Dividend/share (HRK) 0.00 0.00 0.00 0.00EV/sales 1.75 1.70 1.64 0.95EV/EBITDA 12.82 10.85 11.01 7.68P/E 51.50 20.15 3.31 2.74P/CE n.m. 2.55 1.91 1.83P/BV 0.51 0.50 0.44 0.38Dividend yield 0.00% 0.00% 0.00% 0.00%EV/EBITDA rel. 1.4 2.0 2.1 1.7P/E rel. 3.4 2.2 0.4 0.4Performance 1M 3M 6M 12MAbsolute (HRK terms) -7.5% -30.0% -39.8% -23.8%Rel. to sector (EUR, ppt) -4.6 -16.0 -20.5 -14.3Rel. to universe (EUR, ppt) 1.7 -15.6 -29.1 -19.7

52 weeks

1,82,02,22,42,62,83,03,23,43,63,8

CNGW IG (Rebased)DJ EURO STOXX Construction & Material (Rebased)

52 weeks

7

8

9

10

11

12

13

CimsaISE 100 (Rebased)DJ EURO STOXX Construction & Materia l (Rebased)

52 weeks

1.000

1.200

1.400

1.600

1.800

2.000

2.200

2.400

Institut IGH CROBEX (Rebased)



Mostostal Warszawa Buy Target price PLN 47.0Price (PLN) 23.4 ROCE 2010 19.5% 10 11e 12e 13e

ROE 2010 12.6% Sales (PLN mn) 2,570.4 2,945.7 3,050.5 2,799.1Mcap (EUR mn) 113 Net debt (EURmn, 10) -92 EBITDA margin 4.62% 1.82% 2.06% 3.57%Free f loat (%) 50% Gearing (2010) -62% EBIT margin 3.28% 0.59% 0.89% 2.30%Free f loat (EUR mn) 56 Sales CAGR 10-13e 0.8% Net prof it margin 2.56% 0.63% 0.83% 1.98%Shares outst. (mn) 20.0 EPS CAGR 10-13e -18.2% EPS (PLN) 3.12 0.76 1.20 2.63

Dividend/share (PLN) 0.55 0.51 0.58 0.97EV/sales 0.36 0.13 0.12 0.10EV/EBITDA 7.87 7.14 5.67 2.83P/E 19.72 29.44 19.40 8.89P/CE 17.63 n.m. 6.02 3.25P/BV 2.36 0.90 0.87 0.81Dividend yield 0.89% 2.28% 2.49% 4.16%EV/EBITDA rel. 0.8 1.3 1.1 0.6P/E rel. 1.3 3.2 2.5 1.2Performance 1M 3M 6M 12MAbsolute (PLN terms) -19.5% -30.8% -50.3% -62.9%Rel. to sector (EUR, ppt) -18.9 -19.6 -32.6 -52.9Rel. to universe (EUR, ppt) -12.6 -19.2 -41.2 -58.3

PBG S.A. Reduce Target price PLN 167.0Price (PLN) 94.0 ROCE 2010 9.1% 10 11e 12e 13eMcap (PLN mn) 1,344 ROE 2010 15.1% Sales (PLN mn) 2,740.3 2,454.4 2,310.0 2,539.7Mcap (EUR mn) 323 Net debt (EURmn, 10) 159 EBITDA margin 11.66% 11.62% 11.82% 11.20%Free f loat (%) 76% Gearing (2010) 34% EBIT margin 9.95% 9.47% 9.91% 9.26%Free f loat (EUR mn) 245 Sales CAGR 10-13e -0.4% Net prof it margin 7.98% 7.74% 8.40% 7.79%Shares outst. (mn) 14.3 EPS CAGR 10-13e -2.3% EPS (PLN) 15.69 13.82 13.57 13.84


Polimex Hold Target price PLN 3.3Price (PLN) 1.8 ROCE 2010 7.3% 10 11e 12e 13eMcap (PLN mn) 953 ROE 2010 8.2% Sales (PLN mn) 4,160.9 4,639.9 4,838.4 4,675.3Mcap (EUR mn) 229 Net debt (EURmn, 10) 172 EBITDA margin 7.22% 6.27% 5.85% 6.10%Free f loat (%) 100% Gearing (2010) 47% EBIT margin 5.11% 4.31% 3.97% 4.15%Free f loat (EUR mn) 229 Sales CAGR 10-13e -0.9% Net prof it margin 2.87% 2.63% 2.70% 3.00%Shares outst. (mn) 520.9 EPS CAGR 10-13e -5.4% EPS (PLN) 0.24 0.23 0.25 0.27


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PolimexW IG 20 (Rebased)DJ EURO STOXX Construction & Materia l (Rebased)



STRABAG Buy Target price EUR 24.0Price (EUR) 24.0 ROCE 2010 5.3% 10 11e 12e 13e

ROE 2010 5.8% Sales (EUR mn) 12,381.5 13,341.0 13,800.9 14,091.2Mcap (EUR mn) 2,732 Net debt (EURmn, 10) -669 EBITDA margin 5.90% 5.21% 5.20% 5.22%Free f loat (%) 23% Gearing (2010) -21% EBIT margin 2.40% 2.31% 2.32% 2.35%Free f loat (EUR mn) 628 Sales CAGR 10-13e 2.9% Net prof it margin 1.51% 1.58% 1.55% 1.58%Shares outst. (mn) 114.0 EPS CAGR 10-13e 6.4% EPS (EUR) 1.53 1.67 1.74 1.81

Dividend/share (EUR) 0.55 0.60 0.65 0.65EV/sales 0.15 0.18 0.19 0.19EV/EBITDA 2.46 3.53 3.64 3.58P/E 13.37 14.32 13.76 13.22P/CE 3.99 4.75 4.46 4.34P/BV 0.76 0.84 0.81 0.78Dividend yield 2.68% 2.50% 2.71% 2.71%EV/EBITDA rel. 0.3 0.7 0.7 0.8P/E rel. 0.9 1.5 1.7 1.8Performance 1M 3M 6M 12MAbsolute (EUR terms) 18.7% 10.8% 15.3% 41.8%Rel. to sector (EUR, ppt) 22.2 25.3 35.1 53.5Rel. to universe (EUR, ppt) 28.6 25.7 26.5 48.0

Teraplast Accumulate Target price RON 0.5Price (RON) 0.4 ROCE 2010 6.7% 10e 11e 12e 13eMcap (RON mn) 119 ROE 2010 8.2% Sales (RON mn) 269.5 292.7 324.8Mcap (EUR mn) 28 Net debt (EURmn, 10) 15 EBITDA margin 12.00% 11.63% 12.16%Free f loat (%) 45% Gearing (2010) 33% EBIT margin 7.21% 6.92% 7.53%Free f loat (EUR mn) 13 Sales CAGR 10-13e #WERT! Net prof it margin 5.32% 5.56% 8.24% Shares outst. (mn) 297.9 EPS CAGR 10-13e #WERT! EPS (RON) 0.05 0.05 0.09

Dividend/share (RON) 0.00 0.00 0.00EV/sales 0.67 0.60 0.55EV/EBITDA 5.59 5.19 4.49P/E 8.33 7.26 4.39 P/CE 4.85 3.83 2.77 P/BV 0.61 0.55 0.51Dividend yield 0.00% 0.00% 0.00%EV/EBITDA rel. 0.6 1.0 0.8 #WERT!P/E rel. 0.5 0.8 0.6 #WERT!Performance 1M 3M 6M 12MAbsolute (RON terms) -15.8% -20.2% -20.0% -11.1%Rel. to sector (EUR, ppt) -12.2 -7.6 -0.7 1.0Rel. to universe (EUR, ppt) -5.9 -7.2 -9.3 -4.4

Trakcja Polska Buy Target price PLN 5.2Price (PLN) 1.9 ROCE 2010 9.1% 10e 11e 12e 13eMcap (PLN mn) 306 ROE 2010 8.4% Sales (PLN mn) 482.1 2,236.2 2,688.5 Mcap (EUR mn) 74 Net debt (EURmn, 10) -35 EBITDA margin 9.33% 7.15% 6.99% Free f loat (%) 49% Gearing (2010) -34% EBIT margin 6.97% 5.61% 5.47%Free f loat (EUR mn) 36 Sales CAGR 10-13e #WERT! Net prof it margin 6.69% 3.53% 3.45%Shares outst. (mn) 160.1 EPS CAGR 10-13e #WERT! EPS (PLN) 0.20 0.37 0.40

Dividend/share (PLN) 0.00 0.00 0.00 EV/sales 0.32 0.39 0.30 EV/EBITDA 3.46 5.42 4.30P/E 9.12 4.96 4.77P/CE 7.30 3.11 3.17P/BV 0.73 0.55 0.49 Dividend yield 0.00% 0.00% 0.00% EV/EBITDA rel. 0.4 1.0 0.8 #WERT!P/E rel. 0.6 0.5 0.6 #WERT!Performance 1M 3M 6M 12MAbsolute (PLN terms) -27.7% -38.4% -45.4% -56.1%Rel. to sector (EUR, ppt) -26.8 -26.8 -28.0 -46.4Rel. to universe (EUR, ppt) -20.5 -26.4 -36.6 -51.9

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Wienerberger Accumulate Target price EUR 16.5Price (EUR) 10.0 ROCE 2010 0.1% 10 11e 12e 13eMcap (EUR mn) 1,170 ROE 2010 -3.3% Sales (EUR mn) 1,744.8 1,991.5 2,179.3 2,369.6Mcap (EUR mn) 1,170 Net debt (EURmn, 10) 474 EBITDA margin 12.06% 15.63% 17.06% 18.69%Free f loat (%) 90% Gearing (2010) 19% EBIT margin 0.61% 5.76% 8.04% 10.06%Free f loat (EUR mn) 1,053 Sales CAGR 10-13e 6.9% Net prof it margin -2.00% 3.70% 5.96% 7.71%Shares outst. (mn) 117.4 EPS CAGR 10-13e #ZAHL! EPS (EUR) -0.57 0.35 0.82 1.26

Dividend/share (EUR) 0.10 0.25 0.50 0.70EV/sales 1.52 1.07 0.95 0.85EV/EBITDA 12.57 6.81 5.59 4.56P/E nm 28.87 12.20 7.90P/CE 11.68 4.88 3.91 3.25P/BV 0.83 0.57 0.55 0.53Dividend yield 0.70% 2.51% 5.02% 7.02%EV/EBITDA rel. 1.4 1.3 1.1 1.0P/E rel. - 3.1 1.5 1.1Performance 1M 3M 6M 12MAbsolute (EUR terms) -9.9% -25.3% -35.0% -5.7%Rel. to sector (EUR, ppt) -6.3 -10.8 -15.1 5.9Rel. to universe (EUR, ppt) 0.0 -10.4 -23.7 0.5

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W ienerbergerATX (Rebased)DJ EURO STOXX Construction & Material (Rebased)

Sector Insight Food & Beverages


– Sojaprotein impacted by raw material costs. debt restructuring and FX

Sojaprotein swung to profit in 1H11, but margins hurt by higher raw material costs. Sojaprotein’s top line in 1H11 was still in a declining mode compared to 1H10, due to the transition of non-core sales to linked entities of Victoria Group (63% majority owner). On the other hand, core sales (value added soy products) recorded a 4.2% y/y increase, but this came alongside a high increase in inventories. The EBITDA of RSD 839mn fell 4.6%, due to a 15.4% y/y increase of raw material costs.

Debt restructuring and favorable FX developments boost profit. The reported net profit in 1H11 was at RSD 669mn, compared to an RSD 61.5mn loss in 1H10. The company managed to lower its interest-bearing debt substantially (-57.5%) and the FX developments in 1H11, when the RSD appreciated 2.9%, were exceptionally favorable compared to 1H10, when the local currency depreciated 8.9%. The net financial loss of RSD 949mn in 1H10 was practically erased in 1H11.

Share price adjusted for dividend, but there might also be overreaction. The weaker sales can also be attributed to the overall economic situation, but the best quarters are yet to come and we believe that Sojaprotein will perform in line with our estimates for FY11. The new 5.05mn share issue (share dividend) was implemented recently, adjusting our target price to RSD 816.00. The share price retreated after the ex-div more than we expected, but this move was also helped by the recent shake-up on the global equity markets. We stick to our positive opinion on the company and expect the share price to converge to the RSD 750.00-800.00 range in the mid term.




Agrana EUR 1,196.5 8.6% 9.3% 11.0% 10.2% 9.0% 9.5% 10.5% 9.9% 0.1% 4.7% 5.3% 17.8%Albalact RON 29.3 8.0% 11.3% 16.2% 8.7% 9.6% 10.3% -13.6% -20.9% -24.5% -20.4%Astarta Holding NV EUR 487.4 48.9% 27.7% 32.5% 30.7% 45.9% 38.2% 30.9% 29.2% -17.8% -10.2% -17.8% 13.6%Atlantic Grupa HRK 275.3 9.1% 4.6% 6.6% 8.8% 9.6% 11.2% 11.9% 12.6% -10.6% -16.8% -22.4% -18.8%Colian (Jutrzenka) PLN 81.1 6% 4.4% 4.9% 4.9% 9.7% 7.8% 8.7% 8.7% -24.6% -36.4% -36.5% -37.7%Podravka HRK 204.9 5.5% 7.3% 7.8% 8.9% 10.2% 11.3% 11.6% 12.1% -11.7% -13.6% -11.1% -4.2%Sojaprotein AD RSD 97.9 7.2% 16.4% 15.4% 14.4% 12.5% 21.6% 21.5% 21.3% -11.5% -24.5% 2.6% 53.6%Median - - 8% 8% 9% 9% 10% 10% 11% 12% - - - -Remy Cointreau S.A. EUR - 3,102 10.1% 12.1% 12.8% 14.0% 22.7% 23.5% 24.8% 22.1% 9.3% 13.5% 19.3% 46.7%Finsbury Food Group PGBP - 15 7.7% 9.0% 9.0% 0.0% 0.0% 0.0% 0.0% 17.0% -1.4% 1.3% 31.9%Donegal Creameries PLEUR - 39 5.3% 11.0% 11.0% 9.2% 9.2% 0.0% 0.0% -0.5% -3.0% -4.2% 41.1%Nestle S.A. CHF - 146,611 17.5% 17.6% 18.7% 19.0% 16.3% 20.4% 20.7% 21.0% 2.9% 7.3% 11.0% 16.2%Kraft Foods Inc. USD - 42,521 9.7% 10.3% 10.9% 14.3% 17.0% 18.1% 18.4% 18.5% 0.6% 6.7% 8.0% 5.9%Rieber & Son ASA NOK - 401 15.1% 20.4% 20.2% 19.5% 15.7% 16.6% 16.6% 0.0% -1.6% -9.9% -8.6% 13.8%Laurent-Perrier EUR - 573 5.7% 7.2% 8.7% 9.3% 22.4% 25.3% 26.6% 0.0% -2.6% 13.3% 25.1% 42.3%Median Total - 196,668 9.9% 11.6% 11.9% 14.1% 17.0% 20.4% 22.8% 21.6% - - - -EuroStoxx Food & Beverages

237,997 14.3% 14.6% 14.9% 14.4% 17% 16% 16% 16% -3.7% -4.9% 2.7% 12.1%

CEE to Peer, Prem/Disc - -16% -28% -21% -37% -43% -49% -51% -44% - - - -


2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAgrana 14.1 13.3 11.1 11.2 11.2 6.6 7.1 6.3 6.3 1.2 1.2 1.2Albalact 17.3 11.2 7.1 6.8 5.3 4.1 1.3 1.2 1.1Astarta Holding NV 7.2 7.4 4.5 3.3 3.3 8.7 10.1 5.9 4.2 2.8 1.8 1.2Atlantic Grupa 23.5 31.3 20.7 14.8 14.8 9.2 7.5 6.4 5.5 1.9 1.4 1.3Colian (Jutrzenka) 17.8 12.3 11.2 11.1 11.1 9.5 6.9 6.8 6.7 0.9 0.6 0.5Podravka 19.2 12.3 10.4 8.5 8.5 6.8 5.2 4.7 4.2 1.0 0.8 0.8Sojaprotein AD 9.7 5.0 4.8 4.6 4.6 7.5 4.3 3.9 3.8 0.7 0.8 0.7Median CEE 17.6 12.3 10.7 11.1 11.1 7.7 7.0 6.1 5.5 1.2 1.2 1.1Remy Cointreau S.A. 28.4 22.7 19.9 17.4 23.2 21.4 18.1 16.5 2.9 2.7 2.6 2.4Finsbury Food Group PLC 3.4 3.2 2.9 2.7 0.3 0.3 0.3Donegal Creameries PLC 12.3 5.4 5.3 62.3 4.5 4.2 0.7 0.6 0.6Nestle S.A. 17.2 16.3 14.9 13.5 13.8 13.6 12.2 10.7 3.0 2.9 2.8 2.6Kraft Foods Inc. 16.1 15.5 13.8 12.4 14.9 11.5 10.4 9.3 1.6 1.6 1.5 1.8Rieber & Son ASA 11.2 9.2 8.4 7.9 6.8 6.5 5.9 5.6 1.7 1.9 1.7 1.5Laurent-Perrier 38.8 29.0 22.7 19.2 27.5 25.2 19.1 15.1 2.2 2.1 2.0 1.8Median Total 16.6 15.9 14.4 13.5 18.7 13.6 12.2 11.8 1.9 2.0 1.8 1.9EuroStoxx Food & Beverages 15.3 14.5 12.9 11.9 9.4 9.8 9.2 9.2 2.3 2.1 1.9 1.6

CEE to Peer, Prem/Disc 6% -23% -25% -18% -41% -43% -42% -48% 184% -37% -35% -40%

2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAgrana 1.1 0.8 0.7 0.7 0.7 8.5 7.6 6.8Albalact 0.7 0.6 0.5 7.5 5.9 4.5Astarta Holding NV 0.9 3.1 2.5 1.6 1.2 6.9 6.7 5.2Atlantic Grupa 1.3 2.2 1.0 0.9 0.9 23.4 8.7 7.8Colian (Jutrzenka) 0.5 0.9 0.5 0.5 0.5 9.8 6.9 6.3Podravka 0.7 0.9 0.8 0.7 0.7 8.3 6.8 6.2Sojaprotein AD 0.6 0.8 1.2 1.1 1.1 6.1 5.4 5.1Median CEE 0.9 0.9 0.7 0.7 0.7 8.4 6.9 6.2Remy Cointreau S.A. 3.2 3.2 3.0 2.8 16.2 15.2 13.5 11.8Finsbury Food Group PLC 0.3 0.2 0.2 0.2 4.4 4.1 3.9Donegal Creameries PLC 0.5 0.4 0.4 11.6 4.8 4.1Nestle S.A. 1.8 2.1 2.0 1.9 11.2 10.9 10.4 9.7Kraft Foods Inc. 1.7 1.6 1.5 1.4 10.2 9.7 8.8 8.2Rieber & Son ASA 0.9 0.8 0.7 0.7 6.2 5.2 4.6 4.6Laurent-Perrier 3.9 4.1 3.8 3.5 20.1 19.6 16.1 14.0Median Total 1.7 1.9 1.8 1.9 11.4 10.3 9.6 9.6EuroStoxx Food & Beverages 1.4 1.2 1.1 1.0 8.9 8.2 7.4 6.6

CEE to Peer, Prem/Disc -50% -52% -58% -62% -94% -18% -28% -35%

P/CE P/BV

EV/Sales EV/EBITDA

P/E




Agrana Accumulate Target price EUR 93.0Price (EUR) 84.3 ROCE 2010 5.3% 10 11e 12e 13e

ROE 2010 8.6% Sales (EUR mn) 1,989.2 2,165.9 2,331.3 2,483.1Mcap (EUR mn) 1,197 Net debt (EURmn, 10) 420.8 EBITDA margin 9.01% 9.47% 10.55% 9.85%Free float (%) 9.5% Gearing (2010) 47% EBIT margin 4.57% 5.85% 7.09% 6.57%Free float (EUR mn) 114 Sales CAGR 10-13e 5.2% Net prof it margin 3.82% 3.96% 4.82% 4.51%Shares outst. (mn) 14.2 EPS CAGR 10-13e #ZAHL! EPS (EUR) 5.08 5.95 7.58 7.54


Performance 1M 3M 6M 12MAbsolute (EUR terms) 0.1% 4.7% 5.3% 5.3%Rel. to sector (EUR, ppt) 7.1 10.1 12.0 9.5Rel. to universe (EUR, ppt) 10.0 19.5 16.5 24.1

Albalact Buy Target price RON 0.328Price (RON) 0.2 ROCE 2010 6.1% 10e 11e 12e 13eMcap (RON mn) 124 ROE 2010 8.0% Sales (RON mn) 252.0 285.4 350.5Mcap (EUR mn) 29 Net debt (EURmn, 10) 9.8 EBITDA margin 8.68% 9.57% 10.27%Free float (%) 31.8% Gearing (2010) 45% EBIT margin 4.26% 5.33% 6.53%Free float (EUR mn) 9 Sales CAGR 10-13e #WERT! Net prof it margin 2.82% 3.85% 4.99% Shares outst. (mn) 652.7 EPS CAGR 10-13e #WERT! EPS (RON) 0.01 0.02 0.03

Dividend/share (RON) 0.00 0.00 0.01EV/sales 0.65 0.57 0.46EV/EBITDA 7.52 5.91 4.47P/E 17.32 11.17 7.09 P/CE 6.75 5.31 4.05P/BV 1.34 1.20 1.10Dividend yield 0.00% 0.00% 7.06%EV/EBITDA rel. 11.4 0.7 0.6 #WERT!P/E rel. 1.0 0.9 0.7 #WERT!

Performance 1M 3M 6M 12MAbsolute (RON terms) -13.6% -19.0% -23.9% -23.9%Rel. to sector (EUR, ppt) -6.6 -15.5 -17.8 -28.7Rel. to universe (EUR, ppt) -3.7 -6.1 -13.2 -14.2

Astarta Holding NV Buy Target price EUR 139.2Price (EUR) 81.0 ROCE 2010 33.9% 10 11e 12e 13eMcap (EUR mn) 487 ROE 2010 48.9% Sales (EUR mn) 219.3 251.6 495.2 752.3Mcap (EUR mn) 487 Net debt (EURmn, 10) 110.4 EBITDA margin 45.92% 38.18% 30.92% 29.24%Free float (%) 31.0% Gearing (2010) 53% EBIT margin 39.90% 31.38% 26.00% 25.00%Free float (EUR mn) 151 Sales CAGR 10-13e 55.6% Net prof it margin 36.53% 26.04% 21.73% 19.67%Shares outst. (mn) 25.0 EPS CAGR 10-13e 49.4% EPS (EUR) 3.20 2.62 4.31 5.92


Performance 1M 3M 6M 12MAbsolute (EUR terms) -14.6% -5.8% -14.0% -14.0%Rel. to sector (EUR, ppt) -10.8 -4.8 -11.1 5.3Rel. to universe (EUR, ppt) -7.9 4.6 -6.6 19.9

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Albaraka TurkISE 100 (Rebased)DJ EURO STOXX Banks (Rebased)

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Astarta Holding NVDJ EURO STOXX Food & Beverage (Rebased)WIG food (Rebased)



Atlantic Grupa Accumulate Target price HRK 720.0Price (HRK) 618.0 ROCE 2010 5.6% 10 11e 12e 13eMcap (HRK mn) 2,061 ROE 2010 9.1% Sales (HRK mn) 2,268.6 4,654.6 4,842.9 5,053.9Mcap (EUR mn) 275 Net debt (EURmn, 10) 333.1 EBITDA margin 9.56% 11.20% 11.86% 12.57%Free f loat (%) 27.0% Gearing (2010) 169.0% EBIT margin 7.17% 6.83% 7.44% 8.11%Free f loat (EUR mn) 74 Sales CAGR 10-13e 23.1% Net prof it margin 4.64% 1.67% 2.32% 3.01%Shares outst. (mn) 3.3 EPS CAGR 10-13e 4.9% EPS (HRK) 33.84 19.52 29.82 41.70

Dividend/share (HRK) 0.00 0.00 8.00 10.00EV/sales 2.23 0.97 0.93 0.87EV/EBITDA 23.36 8.71 7.84 6.96P/E 23.48 31.31 20.73 14.82P/CE 9.20 7.52 6.44 5.54P/BV 1.93 1.41 1.35 1.25Dividend yield 0.00% 0.00% 1.29% 1.62%EV/EBITDA rel. 35.5 1.0 1.1 1.1P/E rel. 1.3 2.5 1.9 1.3

Performance 1M 3M 6M 12MAbsolute (HRK terms) -26.8% -37.5% -41.7% -41.7%Rel. to sector (EUR, ppt) -3.5 -11.4 -15.7 -27.1Rel. to universe (EUR, ppt) -0.7 -1.9 -11.2 -12.6

Colian (Jutrzenka) Buy Target price PLN 2.7Price (PLN) 2.4 ROCE 2010 4.5% 10 11e 12e 13eMcap (PLN mn) 337 ROE 2010 5.5% Sales (PLN mn) 621.6 632.6 630.2 630.2Mcap (EUR mn) 81 Net debt (EURmn, 10) 8 EBITDA margin 9.65% 7.84% 8.68% 8.68%Free f loat (%) 36.7% Gearing (2010) 5% EBIT margin 5.69% 4.72% 5.59% 5.59%Free f loat (EUR mn) 30 Sales CAGR 10-13e 2.1% Net prof it margin 5.03% 4.14% 4.79% 4.84%Shares outst. (mn) 143.4 EPS CAGR 10-13e -2.4% EPS (PLN) 0.22 0.18 0.21 0.21



Podravka Accumulate Target price HRK 375.0Price (HRK) 283.0 ROCE 2010 5.1% 10 11e 12e 13eMcap (HRK mn) 1,534 ROE 2010 5.5% Sales (HRK mn) 3,522.3 3,594.3 3,761.4 3,954.8Mcap (EUR mn) 205 Net debt (EURmn, 10) 184 EBITDA margin 10.22% 11.34% 11.63% 12.12%Free f loat (%) 59.7% Gearing (2010) 83% EBIT margin 5.82% 6.61% 6.95% 7.50%Free f loat (EUR mn) 122 Sales CAGR 10-13e 2.5% Net prof it margin 2.39% 3.43% 3.93% 4.55%Shares outst. (mn) 5.4 EPS CAGR 10-13e #ZAHL! EPS (HRK) 15.54 22.78 27.30 33.27


Performance 1M 3M 6M 12MAbsolute (HRK terms) -11.0% -12.9% -10.3% -10.3%Rel. to sector (EUR, ppt) -4.6 -8.2 -4.4 -12.5Rel. to universe (EUR, ppt) -1.8 1.3 0.1 2.1

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Sojaprotein AD Hold Target price RSD 816.2Price (RSD) 660.0 ROCE 2010 4.9% 10 11e 12e 13eMcap (RSD mn) 9,831 ROE 2010 7.2% Sales (RSD mn) 16,806.7 14,845.0 15,392.8 15,947.7Mcap (EUR mn) 98 Net debt (EURmn, 10) 48 EBITDA margin 12.51% 21.60% 21.54% 21.33%Free f loat (%) 37.1% Gearing (2010) 43% EBIT margin 11.03% 19.55% 18.72% 18.55%Free f loat (EUR mn) 36 Sales CAGR 10-13e -3.4% Net prof it margin 5.04% 14.02% 14.20% 14.17%Shares outst. (mn) 14.9 EPS CAGR 10-13e 34.2% EPS (RSD) 56.11 133.93 138.80 142.98

Dividend/share (RSD) 0.00 38.33 83.94 89.89EV/sales 0.76 1.17 1.09 1.05EV/EBITDA 6.11 5.42 5.06 4.93P/E 9.73 5.00 4.75 4.62P/CE 7.46 4.29 3.92 3.81P/BV 0.71 0.77 0.70 0.64Dividend yield 0.00% 5.72% 12.72% 13.62%EV/EBITDA rel. 9.3 0.6 0.7 0.8P/E rel. 0.6 0.4 0.4 0.4

Performance 1M 3M 6M 12MAbsolute (RSD terms) -12.9% -22.0% -1.2% -1.2%Rel. to sector (EUR, ppt) -4.4 -19.1 9.3 45.3Rel. to universe (EUR, ppt) -1.6 -9.6 13.9 59.9

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Sojaprotein ADBELEX 15 (Rebased)DJ STOXX Food & Beverages (Rebased)

Sector Insight Healthcare


– As expected, both Hungarian companies’ bottom lines headed south in April-June 2011, as y/y less favorable forex situation weighed on results – In y/y absence of one-off gains, Bioton’s 1H11 bottom line dived deeper into red – Despite challenging home market conditions, Romanian pharmas posted solid 1H11 performance – Krka and Richter remain our top picks

CEE pharma share performance sluggish. The reporting season was in full swing last month. Reflecting the rather thin holiday season trading activity and prevailingly negative sentiment on equity markets, CEE pharma stocks’ performance remained volatile, with most stocks heading south last month. Although Richter and Egis’ results broadly matched market expectations, their share prices dropped, hitting new lows for this year. Also, two additional pieces of good news from Richter provided only fragile support to the stock. First, the company announced that the International Court of Arbitration awarded Richter USD 40mn in the arbitration proceedings related to the failure of the Polpharma transaction. Secondly, Richter announced that it is entering into a cooperation deal with Stada in the biosimilars area, with two highlighted biosimilar products under development, Rituximab and Trastuzumab. This news was undoubtedly positive, as it shed more light on Richter’s future engagement in this promising field. However, as the timeframe of the projects suggests that investors will have to wait a long time to see the rewards (the first product, Rituximab biosimilar, is only envisaged to be approved by the end of 2017), the share price reaction was lukewarm. The delays in the announced deadline for completion of the Actavis cooperation deal resulted in weakening support for Bioton’s share price.

Reflecting the y/y reversal of forex fortunes, as well as the high comparative base, Richter’s 2Q11 bottom line headed south. Richter published its 2Q11 consolidated results on August 2, 2011. Sales rose by 1.8% y/y to HUF 75,068mn, while operating profit decreased 28.6% y/y to HUF 13,162mn and net profit after minorities slumped by 67.9% y/y to HUF 8,500mn. This translated into 1H11 consolidated results as follows. Sales advanced 6.3% y/y to HUF 145,907mn, while operating profit fell by 21.3% y/y to HUF 23,390mn and net profit after minorities contracted 48.3% y/y to HUF 19,675mn. Reflecting the minimal pricing pressures as well as the benefits from new product launches, Richter’s domestic sales performance in 2Q11 was robust, with sales up 12.7% y/y to HUF 9,693mn. The export picture was mixed this time, with a y/y Gruenenthal OC portfolio-driven pickup in EU sales and a steadily excellent Russia/CIS performance offsetting the drop in US sales, caused by the y/y drying up of the drospirenone related revenue stream. As the y/y firming of the Hungarian forint vs. the USD/EUR and the negative impact from the y/y slump in US sales revenues (including profit sharing) were more than offset by the expanding share of high-margin Russian sales, the Gruenenthal OC portfolio contribution, as well as the shrinking proportion of low-margin wholesale business, Richter’s consolidated gross margin improved y/y from 61.1% in 2Q10 to 63.1% in 2Q11. In the y/y absence of the supportive impact from milestone payments from Forest Laboratories, weighed down by the y/y surging sales & marketing costs (associated with Western markets sales network buildup), the operating profit margin sunk to 17.5% in 2Q11, from the year-earlier 25.0%. The most decisive factor for the bottom line performance was again the financial result. Weighed down by the revaluation losses linked to the changing forex situation (namely, the reassessment of currency related trade receivables and payables and of other currency related items), the financial result swung y/y into negative territory, to a loss of HUF 3.4bn (vs. the year-earlier profit of HUF 9.0bn).

Dragged down by the renewed regulatory burden and y/y reversal of the forex situation, Egis’ 3Q10/11 bottom line surpassed our forecast, but lagged behind the market consensus. Egis announced its 3Q10/11 results on August 9, 2011, after market close. In 3Q10/11, sales advanced 6.6% y/y to HUF 32,377mn, while operating profit slipped 26.9% y/y to HUF 2,780mn and net profit plummeted 55.0% y/y to HUF 2,310mn. In 1-3Q10/11, Egis’ sales amounted to HUF 95,866mn (up 10.8% y/y), operating profit rose 15.2% y/y to HUF 13,116mn and net profit fell 17.6% y/y to HUF 11,525mn (all figures consolidated and according to IFRS). With pricing pressures remaining minimal, the contribution from new introductions showing more power and market uncertainties giving an additional push, domestic sales growth accelerated to 9.7% y/y in the April-June 2011 period. Exports amounted to EUR 86.5mn (up 8.1% y/y) in 3Q10/11. Despite the 8% y/y sales drop in other CIS markets (plagued in part by the currency issues), but supported by the solid Russian showing, Egis' sales in Russia/CIS went up 2.0% y/y to EUR 39.1mn in 3Q10/11. As expected, buoyed by the y/y higher orders from Servier, bulk chemicals and others sales continued to climb in 3Q, expanding 55.1% y/y to EUR 9.8mn. The unfavorable changes in Egis' sales mix (namely the expanding share of low-margin bulk sales), coupled with negative currency developments, were more than compensated for by improving cost efficiencies. Unfortunately, the operating profitability gains were wiped out by the renewed home market regulatory burden, dragging down



the other operating expense/income balance. As the company (with respect to the change in legislation) was forced to also book the cumulative past period burden (HUF 1.8bn) on top of the 3Q10/11 obligation, the total OEP related payments amounted to HUF 2,542mn in 3Q10/11. Consequently, operating profit fell 26.9% y/y in 3Q10/11. It is worth mentioning that, excluding the past period’s one-off, 3Q operating profit would have notched a 21% y/y rise.

In y/y absence of positive one-offs, Bioton’s 1H11 bottom line dived deeply into red. Bioton published its 1H11 results on August 31, 2011, wrapping up the reporting reason the CEE pharma universe. Sales advanced a solid 8.9% y/y to PLN 136.1mn in 1H11. The 1H10 picture was dominated by huge one-off items linked to the disposal of the antibiotics segment, as well as the sell-off of Bioton Wostok, bolstering the operating line and, most importantly, pushing the bottom line out of the red. Nonetheless, in the absence of similar support, the operating loss widened to PLN 33.0mn and the bottom line swung y/y into red territory in 1H11. The company posted a net loss after minorities of PLN 34.3mn (vs. the year-earlier net profit of PLN 24.4mn; all data consolidated according to IFRS standards and compared to the year-earlier period’s results restated to reflect the disposal of the antibiotics business). Separately, the company also announced that it signed an agreement to buy a 50.11% stake in Biolek, which focuses on veterinary products (namely food supplements). The value of the transaction was said to be PLN 60mn. Bioton CEO Ziegert emphasized that the acquisition of Biolek represents a strategically important addition to Bioton’s portfolio, with Biolek envisaged to positively contribute to Bioton’s results in a very short period of time.

Despite challenging home market environment, Romanian pharmas posted solid 1H11 results Antibiotice reported its 1H11 results on August 12. The company presented a strong set of figures for 1H11, with sales advancing 20% y/y to RON 138.5mn and net profit climbing 34% y/y to RON 23.1mn. The sales growth was fueled by higher volumes sold on the domestic market, benefiting from a well diversified product portfolio at affordable prices. On the other hand, deliveries of finished products to the US market were lower than originally expected, while sales in other export markets (North Africa and the Middle East) were hampered by the political turbulence. While Antibiotice’s sales surpassed (by some 2%) our forecast, the operating result, dragged down by expanding sales & marketing expenses (and sliding 21% y/y to RON 25.3mn), lagged 21% behind our forecast in 1H11. Reflecting the y/y improving financial result, net profit increased 34% y/y, but given the drop on the operating line, it still ended 12% below our target of RON 26.3mn. Biofarm announced its 1H11 results the same day as its home peer, i.e. August 12. The 1H11 results confirmed that, while the company managed to further increase sales, the pace of progress slowed compared to the strong 1Q11 showing. In total, Biofarm’s sales advanced 19% y/y to RON 49.5mn. Hurt by elevated raw material expenses, on top of the anticipated hike in sales & marketing costs, operating profit rose just 2.5% y/y to RON 12.8mn, missing our estimate by 7.7%. Bolstered by significant financial gains, net profit soared 14.4% y/y to RON 11.0mn, with the resulting minimal (just 1.3%) negative difference compared to our projections.

Krka and Richter remain our top picks. The coming month is poised to see rather limited news flow from the CEE pharma sector, providing investors with more time to digest the 1H11 results. More details on the Hungarian pharma market regulatory changes and the situation around the finalization of the cooperation deal between Bioton and Iceland-based Actavis are set to continue to attract investors’ attention in the coming period. Importantly, with the outlook for the Hungarian pharmas’ 2011 business performance confirmed and the negative impact of the Hungarian regulatory burden already factored into the market projections (and more than adequately priced in), we believe that Richter and Egis’ current share prices represent attractive entry levels. We stick to our Accumulate recommendation for Egis and Buy call for Richter. While Egis’ valuation gap remains very appealing, we continue to prefer Richter, due not least to the company’s competitive edge in terms of its R&D pipeline. The 1H11 results reassured investors that Krka maintains its regional competitive edge. The company’s prepared secondary listing abroad promises to boost its stock liquidity, with the accompanying news flow (with a decision on the parameters of the listing to be revealed in November this year) to give a new impetus to the stock.




Antibiotice RON 49.6 5.0% 9.2% 9.2% 9.9% 17.8% 18.7% 19.2% 20.4% -12.9% -13.6% -8.9% 3.2%Biofarm RON 49.9 10% 15.9% 13.2% 13.4% 26.0% 28.9% 27.4% 27.5% -7.3% -8.4% -12.8% 9.1%Bioton PLN 142.4 11.2% 2.0% 3.8% 5.2% 37% 19.6% 24.7% 27.9% -3.7% -30.1% -44.7% -50.0%Egis HUF 455.9 11.9% 10.3% 9.1% 9.2% 20% 18% 17.6% 17.9% -13.2% -19.7% -17.2% -18.8%Farmacol PLN 142.8 10.0% 10.9% 9.8% 9.5% 1.9% 2.3% 2.3% 2.2% -11.6% -30.8% -31.7% -42.9%Intercell EUR 109.3 -105% -42.2% -24.6% -15.2% -712% -87.0% -18.1% -2.0% -19.8% -57.7% -74.2% -84.5%Krka EUR 2,037.0 17.4% 15.9% 15.6% 15.3% 29.0% 30.5% 31.0% 31.4% -4.3% -4.2% -6.5% -12.9%Neuca PLN 68.2 17.3% 17.9% 16.8% 15.4% 1.4% 1.6% 1.7% 1.6% -8.7% -21.6% -25.6% -15.5%PGF PLN 107.6 16.6% 12.0% 9.6% 10.2% 2.4% 1.9% 1.8% 1.9% -15.7% -34.7% -35.7% -20.6%Richter Gedeon HUF 2,367.8 15.9% 10.2% 10.3% 11.0% 15.1% 24.1% 24.8% 25.4% -7.5% -6.5% -6.5% -23.7%Median - - 12% 11% 10% 10% 16% 19% 18% 19% - - - -Teva Pharmaceutical IndusILS - 30,108 18.6% 18.0% 17.5% 16.6% 36.4% 33.0% 33.6% 34.7% -2.8% 2.6% -20.8% -17.0%Mylan Inc. USD 7,126 15.1% 20.1% 19.7% 18.6% 25.7% 27.1% 28.2% 28.2% -1.9% -3.8% -3.5% 17.9%Watson Pharmaceuticals InUSD 6,366 12.9% 14.6% 15.7% 16.3% 23.5% 23.2% 25.1% 29.8% 0.0% 13.0% 20.8% 53.0%Stada Arzneimittel AG EUR 1,580 15.2% 14.8% 14.9% 15.6% 18.4% 19.4% 19.9% 20.3% 0.7% -10.3% -1.5% 3.6%Ranbaxy Laboratories Ltd. INR - 3,656 21.8% 16.4% 15.7% 13.8% 18.9% 20.5% 19.8% 15.4% 5.3% 26.1% 1.0% 18.4%Recordati S.p.A. EUR 1,595 18.8% 17.4% 16.7% 16.3% 25.0% 25.0% 25.2% 25.5% 2.0% 6.6% 14.2% 32.8%Dr. Reddy's Laboratories Lt INR - 4,300 23.9% 23.6% 22.3% 20.4% 20.9% 22.4% 22.6% 21.6% 6.5% -0.2% 1.1% 15.9%Median Total - 54,731 18.6% 17.4% 16.7% 16.3% 23.5% 23.2% 25.1% 25.5% - - - -EuroStoxx Healthcare 157,295 14.2% 14.8% 14.3% 14.2% 23% 22% 22% 23% -10.8% -19.3% -19.9% -2.1%CEE to Peer, Prem/Disc - -38% -39% -42% -39% -30% -20% -27% -25% - - - -


2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAntibiotice 19.7 9.7 8.5 7.0 9.6 8.8 5.4 4.6 0.9 0.8 0.7 0.6Biofarm 16.4 8.7 9.7 8.9 13.3 7.6 7.6 6.9 1.5 1.3 1.2 1.1Bioton 6.9 27.1 14.5 10.0 5.2 10.2 7.6 6.0 0.7 0.6 0.5 0.5Egis 10.3 7.8 8.0 7.3 7.1 4.7 5.0 4.6 1.2 0.8 0.7 0.6Farmacol 13.2 6.8 6.9 6.7 6.5 5.8 6.0 5.7 1.2 0.7 0.7 0.6Intercell nm nm nm nm n.m. n.m. n.m. n.m. 4.7 1.3 1.6 1.6Krka 13.0 11.5 10.3 9.3 8.8 7.8 7.0 6.2 2.1 1.7 1.5 1.3Neuca 9.1 6.2 5.9 5.7 5.7 4.1 4.0 3.9 1.5 1.1 0.9 0.8PGF 9.6 7.8 9.0 7.7 5.7 5.1 5.6 5.0 1.5 0.9 0.8 0.8Richter Gedeon 12.2 14.2 13.0 11.3 18.1 9.0 8.3 7.4 1.8 1.4 1.3 1.2Median CEE 12.2 8.7 9.0 7.7 7.1 7.6 6.0 5.7 1.5 1.0 0.9 0.8Teva Pharmaceutical Industrie 9.5 9.1 8.1 7.5 9.5 8.2 7.5 7.2 1.8 1.6 1.6 1.4Mylan Inc. 13.5 11.6 10.0 9.2 10.2 9.2 8.1 6.7 2.0 2.3 2.3 2.0Watson Pharmaceuticals Inc. 18.6 15.3 12.0 10.8 15.0 13.3 11.3 8.6 2.4 2.2 2.2 1.9Stada Arzneimittel AG 12.1 11.1 10.0 8.6 8.0 7.4 6.6 6.1 1.8 1.6 1.6 1.5Ranbaxy Laboratories Ltd. 17.9 21.6 18.6 18.8 11.9 24.1 8.8 15.6 3.9 3.5 3.5 2.9Recordati S.p .A. 14.7 13.9 13.1 11.9 11.7 10.9 10.6 10.3 2.8 2.4 2.4 2.2Dr. Reddy's Laboratories Ltd. 23.4 20.2 17.2 15.6 19.9 14.8 14.2 12.3 5.6 4.8 4.8 3.8Median Total 14.7 13.9 12.0 10.8 11.7 10.9 8.8 8.6 2.4 2.3 2.3 2.0EuroStoxx Healthcare 17.3 17.8 15.7 14.0 11.5 11.9 11.2 10.5 2.5 2.3 2.1 1.9CEE to Peer, Prem/Disc -17% -37% -24% -29% -39% -30% -32% -34% -39% -58% -62% -60%

P/CE P/BVP/E




2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAntibiotice 1.3 1.2 1.0 0.8 7.1 6.4 5.4 4.1Biofarm 1.9 1.7 1.6 1.3 7.2 6.1 5.7 4.9Bioton 2.5 2.0 1.8 1.4 6.7 10.0 7.1 5.2Egis 1.3 0.8 0.7 0.6 6.6 4.3 3.9 3.2Farmacol 0.2 0.1 0.1 0.1 11.0 5.7 5.4 5.3Intercell 15.3 3.1 2.4 1.7 -2.1 -3.6 -13.0 -88.6Krka 2.3 2.0 1.8 1.6 8.0 6.5 5.8 5.2Neuca 0.1 0.1 0.1 0.1 9.0 6.6 6.3 6.0PGF 0.2 0.2 0.2 0.2 9.4 8.5 9.2 8.3Richter Gedeon 2.7 2.0 1.8 1.5 17.7 8.1 7.1 5.9Median CEE 1.6 1.5 1.3 1.1 7.6 6.4 5.7 5.2Teva Pharmaceutical Industrie 4.0 3.4 2.5 2.0 12.1 9.4 7.5 6.1Mylan Inc. 2.1 2.6 2.4 2.1 8.6 10.0 8.9 7.3Watson Pharmaceuticals Inc. 2.0 2.1 2.2 1.8 8.4 9.0 9.7 7.3Stada Arzneimittel AG 1.5 1.4 1.4 1.3 8.3 7.9 7.2 6.5Ranbaxy Laboratories Ltd. 3.3 3.1 2.5 2.2 33.9 16.3 12.0 10.9Recordati S.p.A. 1.5 2.0 2.1 1.9 5.6 7.9 8.3 7.4Dr. Reddy's Laboratories Ltd. 2.9 4.0 3.1 2.6 14.9 19.1 13.7 11.6Median Total 2.1 2.6 2.4 2.0 8.6 9.4 8.9 7.3EuroStoxx Healthcare 2.1 2.4 2.3 2.1 8.7 8.9 8.1 7.2CEE to Peer, Prem/Disc -24% -43% -47% -47% -11% -31% -36% -30%

EV/Sales EV/EBITDA



Antibiotice Accumulate Target price RON 0.568Price (RON) 0.440 ROCE 2010 4.4% 10 11e 12e 13eMcap (RON mn) 210 ROE 2010 5.0% Sales (RON mn) 243.6 268.4 293.4 321.1Mcap (EUR mn) 50 Net debt (EURmn, 10) 15.5 EBITDA margin 17.77% 18.73% 19.20% 20.38%Free float (%) 37.0% Gearing (2010) 25% EBIT margin 12.41% 13.04% 13.65% 14.79%Free float (EUR mn) 18 Sales CAGR 10-13e 9.9% Net profit margin 5.09% 9.21% 9.70% 10.89%Shares outst. (mn) 477.7 EPS CAGR 10-13e 24.65% EPS (RON) 0.03 0.04 0.05 0.06

Dividend/share (RON) 0.00 0.02 0.02 0.03EV/sales 1.27 1.19 1.03 0.83EV/EBITDA 7.14 6.35 5.37 4.09P/E 19.71 9.75 8.55 6.96P/CE 9.65 8.78 5.44 4.60P/BV 0.95 0.84 0.74 0.64Dividend yield 0.00% 4.10% 4.68% 5.75%EV/EBITDA rel. 0.9 1.0 0.9 0.8P/E rel. 1.6 1.1 0.9 0.9Performance 1M 3M 6M 12MAbsolute (RON terms) -12.9% -11.5% -8.2% 2.7%Rel. to sector (EUR, ppt) -6.5 -3.7 5.7 31.0Rel. to universe (EUR, ppt) -3.0 1.3 2.4 9.5

Biofarm Accumulate Target price RON 0.246Price (RON) 0.193 ROCE 2010 12.9% 10 11e 12e 13eMcap (RON mn) 212 ROE 2010 9.7% Sales (RON mn) 82.3 97.1 105.8 114.3Mcap (EUR mn) 50 Net debt (EURmn, 10) -15.8 EBITDA margin 25.98% 28.86% 27.39% 27.51%Free float (%) 57.0% Gearing (2010) -46% EBIT margin 20.34% 23.89% 21.92% 21.78%Free float (EUR mn) 28 Sales CAGR 10-13e 14.2% Net profit margin 16.34% 24.29% 20.25% 20.46%Shares outst. (mn) 1,095 EPS CAGR 10-13e 4.93% EPS (RON) 0.01 0.02 0.02 0.02

Dividend/share (RON) 0.01 0.01 0.01 0.01EV/sales 1.87 1.75 1.55 1.34EV/EBITDA 7.22 6.06 5.67 4.86P/E 16.37 8.74 9.70 8.89P/CE 13.28 7.60 7.63 6.94P/BV 1.54 1.33 1.24 1.15Dividend yield 2.70% 5.15% 4.64% 5.06%EV/EBITDA rel. 0.9 0.9 1.0 0.9P/E rel. 1.3 1.0 1.1 1.2Performance 1M 3M 6M 12MAbsolute (RON terms) -7.3% -6.2% -12.2% 8.5%Rel. to sector (EUR, ppt) -1.0 1.4 1.8 36.9Rel. to universe (EUR, ppt) 2.6 6.4 -1.6 15.3

Bioton Hold Target price PLN 0.150Price (PLN) 0.110 ROCE 2010 8.3% 10 11e 12e 13eMcap (PLN mn) 592 ROE 2010 11.2% Sales (PLN mn) 410 344 377 417Mcap (EUR mn) 142 Net debt (EURmn, 10) 35.0 EBITDA margin 37.44% 19.64% 24.74% 27.88%Free float (%) 69.8% Gearing (2010) 12% EBIT margin 28.14% 9.55% 14.99% 18.54%Free float (EUR mn) 99 Sales CAGR 10-13e 9.8% Net profit margin 26.99% 6.80% 11.43% 14.72%Shares outst. (mn) 5,379.9 EPS CAGR 10-13e #ZAHL! EPS (PLN) 0.02 0.00 0.01 0.01

Dividend/share (PLN) 0.00 0.00 0.00 0.00EV/sales 2.51 1.96 1.75 1.44EV/EBITDA 6.70 9.99 7.07 5.17P/E 6.88 27.13 14.49 9.98P/CE 5.19 10.19 7.62 6.03P/BV 0.73 0.56 0.53 0.50Dividend yield 0.00% 0.00% 0.00% 0.00%EV/EBITDA rel. 0.9 1.6 1.2 1.0P/E rel. 0.6 3.1 1.6 1.3Performance 1M 3M 6M 12MAbsolute (PLN terms) 0.0% -26.7% -42.1% -47.6%Rel. to sector (EUR, ppt) 2.6 -20.2 -30.1 -22.2Rel. to universe (EUR, ppt) 6.2 -15.2 -33.4 -43.8

52 weeks

0,080,100,120,140,160,180,200,220,240,26

BiotonWIG 20 (Rebased)DJ EURO STOXX Health Care (Rebased)

52 weeks

0,15

0,16

0,17

0,18

0,19

0,20

0,21

0,22

0,23

Biofarm BET (Rebased) DJ EURO STOXX Health Care (Rebased)

52 weeks

0,360,380,400,420,440,460,480,500,520,54

Antibiotice BET (Rebased) DJ STOXX Health Care (Rebased)



Egis Accumulate Target price HUF 23,000Price (HUF) 16,035 ROCE 2010 12.3% 10 11e 12e 13eMcap (HUF mn) 124,844 ROE 2010 11.9% Sales (HUF mn) 118,915.0 128,157.0 134,821.5 145,152.5Mcap (EUR mn) 456 Net debt (EURmn, 10) -53.4 EBITDA margin 20.02% 18.47% 17.63% 17.93%Free float (%) 49.1% Gearing (2010) -10% EBIT margin 13.04% 11.45% 10.57% 10.97%Free float (EUR mn) 224 Sales CAGR 10-13e 5.7% Net profit margin 14.11% 12.44% 11.51% 11.77%Shares outst. (mn) 7.8 EPS CAGR 10-13e 5.58% EPS (HUF) 2,155.61 2,048.07 1,992.47 2,194.31

Dividend/share (HUF) 120.00 120.00 120.00 120.00EV/sales 1.32 0.79 0.69 0.57EV/EBITDA 6.61 4.28 3.93 3.20P/E 10.26 7.76 8.05 7.31P/CE 7.11 4.73 4.96 4.57P/BV 1.16 0.76 0.70 0.64Dividend yield 0.54% 0.76% 0.75% 0.75%EV/EBITDA rel. 0.9 0.7 0.7 0.6P/E rel. 0.8 0.9 0.9 0.9Performance 1M 3M 6M 12MAbsolute (HUF terms) -11.7% -17.3% -16.8% -21.7%Rel. to sector (EUR, ppt) -6.9 -9.9 -2.6 9.0Rel. to universe (EUR, ppt) -3.3 -4.9 -5.9 -12.5

Farmacol Hold Target price PLN 34.0Price (PLN) 25.7 ROCE 2010 7.7% 10 11e 12e 13eMcap (PLN mn) 593 ROE 2010 10.0% Sales (PLN mn) 5,101.5 5,048.1 4,906.8 5,054.0Mcap (EUR mn) 143 Net debt (EURmn, 10) 35 EBITDA margin 1.93% 2.30% 2.27% 2.22%Free float (%) 50.0% Gearing (2010) 18% EBIT margin 1.69% 2.01% 1.96% 1.93%Free float (EUR mn) 71 Sales CAGR 10-13e -0.4% Net profit margin 1.40% 1.68% 1.76% 1.76%Shares outst. (mn) 23.1 EPS CAGR 10-13e 3.68% EPS (PLN) 3.05 3.64 3.70 3.81


Intercell Reduce Target price EUR 3.8Price (EUR) 2.3 ROCE 2010 -138.8% 10 11e 12e 13eMcap (EUR mn) 109 ROE 2010 -105.0% Sales (EUR mn) 34.2 40.0 58.5 81.7Mcap (EUR mn) 109 Net debt (EURmn, 10) -41 EBITDA margin -711.80% -87.00% -18.14% -1.95%Free float (%) 77.1% Gearing (2010) -34% EBIT margin -734.19% -105.48% -31.92% -12.85%Free float (EUR mn) 84 Sales CAGR 10-13e 7.3% Net profit margin -745.82% -108.05% -33.59% -14.18%Shares outst. (mn) 48.6 EPS CAGR 10-13e -14.25% EPS (EUR) -5.25 -0.86 -0.37 -0.21

Dividend/share (EUR) 0.00 0.00 0.00 0.00EV/sales 15.27 3.14 2.35 1.73EV/EBITDA nm nm nm nmP/E nm nm nm nmP/CE nm nm nm nmP/BV 4.66 1.34 1.57 1.65Dividend yield 0.00% 0.00% 0.00% 0.00%EV/EBITDA rel. - - - -P/E rel. - -. -. -.Performance 1M 3M 6M 12MAbsolute (EUR terms) -19.8% -57.7% -74.2% -84.5%Rel. to sector (EUR, ppt) -13.5 -47.8 -59.6 -56.7Rel. to universe (EUR, ppt) -9.9 -42.8 -63.0 -78.3

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Intercell ATX (Rebased) DJ EURO STOXX Health Care (Rebased)

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Farmacol WIG (Rebased) DJ EURO STOXX Health Care (Rebased)

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Egis BUX (Rebased) DJ EURO STOXX Health Care (Rebased)



Krka Buy Target price EUR 89.5Price (EUR) 57.5 ROCE 2010 13.8% 10 11e 12e 13eMcap (EUR mn) 2,037 ROE 2010 17.4% Sales (EUR mn) 1,010.0 1,083.8 1,180.0 1,294.1Mcap (EUR mn) 2,037.0 Net debt (EURmn, 10) 127 EBITDA margin 29.03% 30.49% 30.99% 31.42%Free float (%) 70.5% Gearing (2010) 12% EBIT margin 20.94% 21.82% 22.14% 22.43%Free float (EUR mn) 1,435 Sales CAGR 10-13e 7.9% Net profit margin 16.93% 16.38% 16.69% 16.97%Shares outst. (mn) 35.4 EPS CAGR 10-13e 6.0% EPS (EUR) 4.83 5.01 5.56 6.20

Dividend/share (EUR) 1.40 1.15 1.20 1.30EV/sales 2.34 1.98 1.80 1.62EV/EBITDA 8.05 6.51 5.81 5.17P/E 13.03 11.47 10.34 9.27P/CE 8.77 7.85 6.98 6.22P/BV 2.12 1.72 1.51 1.34Dividend yield 2.22% 2.00% 2.09% 2.26%EV/EBITDA rel. 1.1 1.0 1.0 1.0P/E rel. 1.1 1.3 1.1 1.2Performance 1M 3M 6M 12MAbsolute (EUR terms) -4.3% -4.2% -6.5% -12.9%Rel. to sector (EUR, ppt) 2.0 5.7 8.1 14.9Rel. to universe (EUR, ppt) 5.6 10.7 4.7 -6.7

Neuca Buy Target price PLN 100.0Price (PLN) 64 ROCE 2010 8.1% 10 11e 12e 13eMcap (PLN mn) 284 ROE 2010 17.3% Sales (PLN mn) 6,132 6,414 6,222 6,409Mcap (EUR mn) 68 Net debt (EURmn, 10) 104 EBITDA margin 1.40% 1.57% 1.66% 1.62%Free float (%) 43.8% Gearing (2010) 169% EBIT margin 1.04% 1.20% 1.30% 1.27%Free float (EUR mn) 30 Sales CAGR 10-13e 3.0% Net profit margin 0.60% 0.69% 0.77% 0.78%Shares outst. (mn) 4.4 EPS CAGR 10-13e 6.7% EPS (PLN) 8.51 9.95 10.84 11.28

Dividend/share (PLN) 2.30 2.48 2.70 2.81EV/sales 0.13 0.10 0.10 0.10EV/EBITDA 8.95 6.62 6.31 6.01P/E 9.12 6.18 5.92 5.69P/CE 5.71 4.09 4.04 3.93P/BV 1.46 1.07 0.94 0.83Dividend yield 2.97% 4.03% 4.21% 4.38%EV/EBITDA rel. 1.2 1.0 1.1 1.2P/E rel. 0.7 0.7 0.7 0.7Performance 1M 3M 6M 12MAbsolute (PLN terms) -5.2% -17.7% -22.2% -11.4%Rel. to sector (EUR, ppt) -2.4 -11.7 -11.0 12.3Rel. to universe (EUR, ppt) 1.2 -6.7 -14.4 -9.2

PGF Sell Target price PLN 30.0Price (PLN) 36 ROCE 2010 9.4% 10 11e 12e 13eMcap (PLN mn) 447 ROE 2010 16.6% Sales (PLN mn) 5,795.4 6,520.6 6,381.9 6,573.4Mcap (EUR mn) 108 Net debt (EURmn, 10) 158 EBITDA margin 2.42% 1.94% 1.83% 1.88%Free float (%) 60.1% Gearing (2010) 134% EBIT margin 1.90% 1.48% 1.35% 1.42%Free float (EUR mn) 65 Sales CAGR 10-13e 4.9% Net profit margin 1.24% 0.87% 0.79% 0.90%Shares outst. (mn) 12.4 EPS CAGR 10-13e -1.7% EPS (PLN) 5.69 4.45 3.98 4.66

Dividend/share (PLN) 1.23 0.00 0.00 0.93EV/sales 0.23 0.17 0.17 0.16EV/EBITDA 9.44 8.55 9.18 8.29P/E 9.63 7.75 9.05 7.72P/CE 5.67 5.08 5.62 5.05P/BV 1.49 0.91 0.83 0.75Dividend yield 2.24% 0.00% 0.00% 2.58%EV/EBITDA rel. 1.2 1.3 1.6 1.6P/E rel. 0.8 0.9 1.0 1.0Performance 1M 3M 6M 12MAbsolute (PLN terms) -12.5% -31.4% -32.7% -16.8%Rel. to sector (EUR, ppt) -9.4 -24.8 -21.1 7.2Rel. to universe (EUR, ppt) -5.8 -19.8 -24.4 -14.4

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Krka SBI TOP (Rebased) DJ EURO STOXX Health Care (Rebased)

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PGF WIG (Rebased) DJ STOXX Health Care (Rebased)

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Neuca WIG (Rebased) DJ EURO STOXX Health Care (Rebased)



Richter Gedeon Buy Target price HUF 45,500.0Price (HUF) 34,790 ROCE 2010 17.1% 10 11e 12e 13eMcap (HUF mn) 648,398 ROE 2010 15.9% Sales (HUF mn) 275,312.0 287,687.8 311,601.9 342,739.3Mcap (EUR mn) 2,368 Net debt (EURmn, 10) -195 EBITDA margin 15.08% 24.10% 24.77% 25.37%Free float (%) 74.7% Gearing (2010) -12% EBIT margin 22.76% 14.97% 15.73% 16.57%Free float (EUR mn) 1,770 Sales CAGR 10-13e 6.4% Net profit margin 23.48% 15.67% 16.09% 16.82%Shares outst. (mn) 18.6 EPS CAGR 10-13e 3.0% EPS (HUF) 3,459.64 2,409.58 2,679.56 3,082.82

Dividend/share (HUF) 860.00 600.00 670.00 770.00EV/sales 2.67 1.96 1.75 1.50EV/EBITDA 17.68 8.13 7.07 5.92P/E 12.17 14.21 12.98 11.29P/CE 18.10 8.96 8.30 7.40P/BV 1.83 1.39 1.29 1.19Dividend yield 2.04% 1.75% 1.93% 2.21%EV/EBITDA rel. 2.3 1.3 1.2 1.1P/E rel. 1.0 1.6 1.4 1.5Performance 1M 3M 6M 12MAbsolute (HUF terms) -6.0% -3.8% -6.1% -26.4%Rel. to sector (EUR, ppt) -1.2 3.3 8.1 4.1Rel. to universe (EUR, ppt) 2.4 8.3 4.7 -17.4

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Richter GedeonBUX (Rebased)DJ EURO STOXX Health Care (Rebased)

Sector Insight Industrial Goods & Services


– Strong 2Q11 earnings season accompanied by deteriorating leading indicators – Andritz downgraded to Hold; new target price: EUR 72.4– CAToil – Accumulate confirmed; new target price: EUR 6.4 – E-Star: Successful closure of corporate bond program

Strong 2Q11earnings season; economic indicators deteriorate further. The August reporting season developed as expected. Companies reported very strong results across the board. Almost all companies confirmed their FY11 outlook. Input pricing pressure is easing a bit. The recently released Eurozone PMI for August clocked in at 49.7; indicating contraction in activity for the first time in two years. The Ifo business expectations posted a very steep drop, from 105 in July to 100 in August – the lowest level since October 2009. In manufacturing, German firms no longer assess the current business situation as favorable. The firms have downgraded further their expectations for export business. The August flash PMI for China came in at 49.8, a two-month high but nevertheless below the level of 50, indicating continued contraction of activity. We have decided to lower our FY12 estimates for most stocks we cover, in light of the recent market developments. However, we certainly do not expect that the global economy is to fall off a cliff, similar to developments in 2008/09. This time around, companies are still cautious and inventories are empty. Thus, weakening end demand will not result in collapsing business, due to high inventory levels. Based on our assessment, the market has currently priced in a modest slowdown in 2012. If things turn out to be worse, then a further correction is possible.

Andritz downgraded to Hold; new target price: EUR 72.4. On the basis of lower estimates for 2012 and 2013, we have cut our target price from EUR 81.5 to EUR 72.4. We have therefore cut our recommendation from Accumulate to Hold. Andritz delivered a strong set of figures for 2Q11. New orders rose 41.8% y/y, to a new record level of EUR 1.9bn. A large pulp mill order worth almost EUR 800mn gave new orders a decisive boost. 2Q11 sales rose 31% and operating profit rose 38.3%, to EUR 71.1mn. Due to its sizable net cash pile of EUR 955.2mn, CEO Leitner indicated that Andritz might buy back its own shares if the share price weakens further. The emerging market outlook is the biggest risk factor for Andritz. In its recent annual report, the BIS pointed out that major emerging economies (Brazil, China and India) are currently building up imbalances similar to the developments that caused the financial crisis in advanced economies. In our opinion, a significant slowdown of emerging market activity is the biggest risk factor for the investment case of Andritz.

SBO: Hold recommendation confirmed; new target price: EUR 58.1. The unimpressive market outlook triggers lower EPS estimates for 2011 and beyond for SBO. We consequently cut our target price to EUR 58.1 (from EUR 71.4). Due to SBO’s strong competitive position and the growth dynamics of the oilfield service industry, we nevertheless stick to our Hold recommendation. Leading indicators (PMIs, ISM and Ifo Index) point to slowing growth or even a contraction of global industrial activity in 2H11. The recent market turmoil, focused on the public finances of major economies (the US, France, Italy), has increased the pressure on governments to aggressively cut spending. In our opinion, these spending cuts will be an additional burden on economic growth in the years ahead. We believe that the inventory situation is different compared to 2008. Lead times are lower and we therefore do not expect a dramatic collapse of demand for industrial goods similar to the situation witnessed in 2008. Nevertheless, we expect demand to be weaker in 2012 when compared to 2011. Due to the supply and demand metrics of the global oil industry (the declining supply side, due to ageing oil fields, meeting a gradually rising demand side), we consider SBO a very attractive secular growth story. We would therefore view lower prices as favorable entry points into the stock.

In line with CAToil’s FY11 guidance, we have somewhat lowered our FY11 EPS estimate from EUR 0.44 to EUR 0.37. We also lowered our FY12 and FY13 EPS estimates. We consequently reduced our target price to EUR 6.4 (after EUR 9.4). CAToil’s 2Q11 performance was roughly in line with expectations. Despite the ongoing capacity expansion, CAToil still has a net cash position of EUR 1mn as of June 30, 2011. For 2011, management expects sales to exceed the current order book level of EUR 239mn (e: EUR 267.2mn) and the EBITDA margin should be close to the level of 2010. Management indicated that inflationary pressure, as well as effects from the expansion program, will have a negative impact on CAToil’s profitability going forward. At the end of July, CAToil put its first conventional drilling rig into operation. An additional eight conventional rigs are to be delivered and put into operation in 3Q11 and 4Q11. This new service area should add around EUR 70mn to CAToil’s top line in 2012, with the potential to earn an additional EBITDA volume of around EUR 21-24mn. We still consider CAToil an attractive player in the Russian oilfield service industry. However, in light of the current uncertain global economic outlook, we stick to our Accumulate recommendation, despite the current attractive valuation level.



E-Star completed its corporate bond program in August. The company received authorization from the Hungarian market watchdog for the issue of corporate bonds in a total value of HUF 10bn. The program started in 2010 and had to end August 31, 2011. It is positive that E-Star managed to convince so many investors to subscribe its bonds (with a yield of over 10%, which might have been appealing in the eyes of investors) at a time when regional banks are reluctant to grant new loans. The money collected will be used for the international expansion of the company - more precisely, the CAPEX requirement of the Romanian projects. According to our calculations, total CAPEX spending might amount to HUF 11-12bn in 2011, which can be covered by the corporate bond program and the cash flow from the company’s operation. After completion of the modernization of district heating systems, Zalau is expected to increase E-Star’s EBITDA by HUF 1.5bn per annum and the project in Targu Mures might contribute HUF 1.2bn per year to the company’s EBITDA. (To achieve these goals, however, it will be important that the number of consumers E-Star calculated with earlier joins the system.)




Andritz EUR 3,322.1 25.9% 24.6% 21.2% 21.7% 8.8% 8.3% 7.7% 8.0% -2.2% -11.7% 6.2% 31.6%Apator PLN 141.5 27.5% 22.3% 22.6% 16.7% 17.2% 17.9% -16.9% -20.5% -21.4% -18.0%Aselsan TRY 682.3 33.7% 27.2% 25.9% 24.6% 22.8% 22.6% 22.6% 23.6% -20.8% -23.8% -10.3% -12.1%Atlantska plovidba HRK 98.6 2.9% 4.0% 7.4% 6.4% 32.5% 45.0% 46.7% 41.8% -13.5% -27.3% -30.2% -37.0%CAToil EUR 250.9 9.0% 7.8% 11.7% 11.8% 24.7% 22.8% 25.2% 25.0% -17.9% -31.5% -30.2% -25.2%E-Star HUF 66.8 49.9% 42.2% 39.3% 28.9% 28.2% 21.7% 33.2% 30.8% -22.1% -23.1% -13.5% 16.1%Palfinger EUR 634.9 8.0% 15.3% 18.2% 19.2% 8.8% 12.2% 14.4% 15.4% -21.5% -34.5% -33.4% 6.6%Rafako PLN 179.1 11.2% 10.3% 12.3% 5.9% 5.0% 5.8% -15.9% -4.5% -13.4% -19.0%SBO EUR 864.0 11.0% 18.2% 16.5% 16.4% 27.6% 29.6% 29.3% 29.8% -20.2% -19.5% -14.2% 27.0%Zumtobel EUR 665.9 14.3% 16.2% 18.3% 19.1% 10.4% 10.5% 11.3% 11.7% -6.2% -27.7% -28.2% 17.8%Median - - 13% 17% 18% 19% 20% 19% 20% 24% - - - -EuroStoxx Industrial Goods & Services

335,203 15.2% 15.8% 16.6% 16.7% 12% 14% 14% 15% -13.2% -22.1% -28.0% -14.4%

CEE to Peer, Prem/Disc - -16% 9% 10% 15% 68% 40% 39% 62% - - - -


2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAndritz 19.7 16.8 17.5 15.5 14.9 13.2 13.6 12.4 4.7 3.9 3.5 3.2Apator 10.7 11.5 10.4 8.3 8.6 8.1 2.7 2.5 2.2Aselsan 7.8 6.0 5.7 5.1 6.3 4.7 4.4 3.8 2.3 1.6 1.4 1.2Atlantska plovidba 18.0 13.2 6.7 7.3 2.9 4.1 2.7 2.8 0.5 0.5 0.5 0.5CAToil 19.0 13.8 8.5 7.7 7.2 4.8 3.7 3.5 1.6 1.0 0.9 0.9E-Star 12.5 10.8 7.7 7.5 12.1 8.2 5.7 5.3 5.6 3.8 2.5 1.9Palf inger 42.0 12.2 9.0 7.4 16.1 8.4 6.8 5.9 3.2 1.8 1.5 1.3Rafako 16.8 17.2 14.3 12.8 11.6 10.5 1.7 1.8 1.7SBO 37.6 16.7 16.4 14.7 16.6 10.1 10.0 9.4 3.9 2.9 2.6 2.3Zumtobel 20.5 10.4 8.2 6.9 10.0 5.5 4.7 4.1 2.8 1.6 1.4 1.2Median CEE 18.5 12.7 8.7 7.4 11.0 8.3 6.2 4.7 2.7 1.8 1.6 1.3EuroStoxx Industrial Goods & Services

17.1 14.0 11.3 9.9 10.4 9.3 8.3 7.3 2.4 2.1 1.9 1.7

CEE to Peer, Prem/Disc 8% -9% -23% -25% 6% -11% -25% -36% 15% -17% -14% -24%

2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAndritz 0.8 0.5 0.5 0.4 8.6 5.9 6.5 5.6Apator 1.5 1.3 1.2 9.0 7.6 6.8Aselsan 1.2 0.9 0.7 0.5 5.3 3.8 2.9 2.1Atlantska plovidba 2.0 2.7 2.7 2.2 6.2 6.1 5.8 5.3CAToil 1.5 1.0 0.8 0.7 6.0 4.6 3.3 2.9E-Star 2.8 2.1 2.1 2.0 9.8 9.6 6.5 6.4Palf inger 1.9 1.0 0.9 0.8 21.5 8.6 6.3 5.0Rafako 0.5 0.5 0.5 9.1 9.3 7.8SBO 3.5 2.2 2.1 1.9 12.7 7.4 7.3 6.5Zumtobel 1.1 0.7 0.6 0.5 10.2 6.5 5.4 4.6Median CEE 1.5 1.0 0.9 0.7 9.0 7.0 6.4 5.1EuroStoxx Industrial Goods & Services

1.2 1.0 0.8 0.8 9.7 7.8 6.5 5.6

CEE to Peer, Prem/Disc 24% 6% 5% -3% -7% -11% -2% -8%

P/CE P/BV

EV/Sales EV/EBITDA

P/E




Andritz Hold Target price EUR 72.4Price (EUR) 64.9 ROCE 2010 123.6% 10 11e 12e 13e

ROE 2010 25.9% Sales (EUR mn) 3,553.8 4,339.6 4,515.6 4,813.7Mcap (EUR mn) 3,322.1 Net debt (EURmn, 10) -935.1 EBITDA margin 8.78% 8.26% 7.66% 7.97%Free f loat (%) 69.0% Gearing (2010) -118% EBIT margin 7.02% 6.70% 6.16% 6.54%Free f loat (EUR mn) 2,292 Sales CAGR 10-13e 10.8% Net profit margin 5.06% 4.78% 4.42% 4.67%Shares outst. (mn) 51.2 EPS CAGR 10-13e 10.8% EPS (EUR) 3.48 3.85 3.70 4.18


Performance 1M 3M 6M 12MAbsolute (EUR terms) -2.2% -11.7% 6.2% 31.6%Rel. to sector (EUR, ppt) 8.2 7.0 15.9 14.6Rel. to universe (EUR, ppt) 7.7 3.1 17.4 37.9

Apator Buy Target price PLN 24.7Price (PLN) 16.7 ROCE 2010 16.6% 10e 11e 12e 13eMcap (PLN mn) 588 ROE 2010 27.5% Sales (PLN mn) 403.3 464.9 505.3Mcap (EUR mn) 141 Net debt (EURmn, 10) 10.1 EBITDA margin 16.72% 17.24% 17.86%Free f loat (%) 73.0% Gearing (2010) 19% EBIT margin 12.97% 13.74% 14.63%Free f loat (EUR mn) 103 Sales CAGR 10-13e #WERT! Net profit margin 13.63% 10.58% 11.15%Shares outst. (mn) 35 EPS CAGR 10-13e #WERT! EPS (PLN) 1.51 1.39 1.60

Dividend/share (PLN) 0.70 0.85 1.00EV/sales 1.50 1.31 1.22EV/EBITDA 8.98 7.58 6.83P/E 10.67 11.52 10.43P/CE 8.30 8.64 8.08P/BV 2.65 2.49 2.24Dividend yield 4.36% 5.29% 5.94%EV/EBITDA rel. 1.0 1.1 1.1 #WERT!P/E rel. 0.6 0.9 1.2 #WERT!


Aselsan Buy Target price TRY 11.1Price (TRY) 7.1 ROCE 2010 15.5% 10 11e 12e 13eMcap (TRY mn) 1,679 ROE 2010 33.7% Sales (TRY mn) 1,190 1,467 1,683 1,870Mcap (EUR mn) 682 Net debt (EURmn, 10) -223.1 EBITDA margin 22.84% 22.58% 22.58% 23.58%Free f loat (%) 15.3% Gearing (2010) -55% EBIT margin 18.04% 17.58% 17.58% 17.58%Free f loat (EUR mn) 104 Sales CAGR 10-13e 15.9% Net profit margin 20.25% 17.58% 17.58% 17.58%Shares outst. (mn) 235.2 EPS CAGR 10-13e -3% EPS (TRY) 1.02 1.10 1.26 1.40


Performance 1M 3M 6M 12MAbsolute (TRY terms) -18.7% -18.3% -0.8% 11.6%Rel. to sector (EUR, ppt) -10.4 -5.1 -0.5 -29.2Rel. to universe (EUR, ppt) -10.9 -9.0 1.0 -5.9

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AndritzATX (R ebased)D J EURO STOXX Industria l Goods & Services (Rebased)

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141516171819202122232425

ApatorW IG (Rebas ed)D J E URO STOXX Indus tria l Goods & S ervices (Rebased)

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5,05,56,06,57,07,58,08,59,09,5

AselsanISE 100 (Rebased)DJ EURO STOXX Industrial Goods & Services (Rebased)



Atlantska plovidba Accumulate Target price HRK 788.0Price (HRK) 527.0 ROCE 2010 4.3% 10 11e 12e 13eMcap (HRK mn) 738 ROE 2010 2.9% Sales (HRK mn) 875.0 601.2 763.6 837.7Mcap (EUR mn) 99 Net debt (EURmn, 10) 143.6 EBITDA margin 32.46% 44.99% 46.69% 41.76%Free f loat (%) 78.5% Gearing (2010) 76% EBIT margin 12.12% 19.32% 24.89% 21.89%Free f loat (EUR mn) 77 Sales CAGR 10-13e 4.0% Net profit margin 4.43% 9.47% 14.76% 12.35%Shares outst. (mn) 1.4 EPS CAGR 10-13e #ZAHL! EPS (HRK) 28.43 39.52 78.23 71.77


Performance 1M 3M 6M 12MAbsolute (HRK terms) -26.8% -37.5% -41.7% -41.7%Rel. to sector (EUR, ppt) -3.1 -8.6 -20.4 -54.1Rel. to universe (EUR, ppt) -3.6 -12.5 -18.9 -30.8

CAToil Accumulate Target price EUR 6.4Price (EUR) 5.1 ROCE 2010 9.8% 10 11e 12e 13e

ROE 2010 9.0% Sales (EUR mn) 228.8 267.2 323.3 344.0Mcap (EUR mn) 251 Net debt (EURmn, 10) -33 EBITDA margin 24.66% 22.80% 25.24% 25.04%Free f loat (%) 30.0% Gearing (2010) -15% EBIT margin 12.04% 10.14% 13.52% 13.93%Free f loat (EUR mn) 75 Sales CAGR 10-13e 10.8% Net profit margin 8.51% 6.80% 9.13% 9.53%Shares outst. (mn) 48.9 EPS CAGR 10-13e 40.5% EPS (EUR) 0.40 0.37 0.60 0.67


Performance 1M 3M 6M 12MAbsolute (EUR terms) -17.9% -31.5% -30.2% -25.2%Rel. to sector (EUR, ppt) -7.5 -12.8 -20.5 -42.3Rel. to universe (EUR, ppt) -8.0 -16.6 -19.0 -19.0

E-Star Buy Target price HUF 9920.0Price (HUF) 7,995.0 ROCE 2010 23.4% 10e 11e 12e 13e

ROE 2010 49.9% Sales (HUF mn) 8,479 15,437 16,174 17,473Mcap (EUR mn) 67 Net debt (EURmn, 10) 18 EBITDA margin 28.15% 21.67% 33.23% 30.82%Free f loat (%) 24.8% Gearing (2010) 150% EBIT margin 24.99% 17.97% 27.70% 24.91%Free f loat (EUR mn) 17 Sales CAGR 10-13e 45.4% Net profit margin 17.36% 11.20% 15.35% 14.63%Shares outst. (mn) 2.3 EPS CAGR 10-13e 33.7% EPS (HUF) 642.09 726.83 1,040.92 1,071.48

Dividend/share (HUF) 0.00 0.00 0.00 0.00EV/sales 2.77 2.09 2.14 1.97EV/EBITDA 9.83 9.64 6.45 6.41P/E 12.52 10.83 7.68 7.46P/CE 12.08 8.16 5.65 5.32P/BV 5.57 3.76 2.53 1.89Dividend yield 0.00% 0.00% 0.00% 0.00%EV/EBITDA rel. 1.1 1.4 1.0 1.2P/E rel. 0.7 0.9 0.9 1.0

Performance 1M 3M 6M 12MAbsolute (HUF terms) -20.8% -20.8% -13.1% 11.8%Rel. to sector (EUR, ppt) -11.7 -4.4 -3.7 -1.0Rel. to universe (EUR, ppt) -12.2 -8.3 -2.3 22.3

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Atlantska plovidbaCROBEX (Rebased)DJ STOXX Industrial Goods & Services (Rebased)

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CAToilPrime All Share (Rebased)DJ EURO STOXX Industrial Goods & Services (Rebased)

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E-Star DJ EURO STOXX Industrial Goods & Services (Rebased)



Palfinger Hold Target price EUR 30.5Price (EUR) 18.0 ROCE 2010 7.1% 10 11e 12e 13e

ROE 2010 8.0% Sales (EUR mn) 651.8 807.2 894.5 991.3Mcap (EUR mn) 635 Net debt (EURmn, 10) 204 EBITDA margin 8.81% 12.16% 14.42% 15.43%Free f loat (%) 35.6% Gearing (2010) 62% EBIT margin 5.32% 9.13% 11.77% 13.07%Free f loat (EUR mn) 226 Sales CAGR 10-13e 18.3% Net profit margin 4.18% 7.01% 8.63% 9.48%Shares outst. (mn) 35.3 EPS CAGR 10-13e #ZAHL! EPS (EUR) 0.68 1.47 2.00 2.43


Performance 1M 3M 6M 12MAbsolute (EUR terms) -21.5% -34.5% -33.4% 6.6%Rel. to sector (EUR, ppt) -11.1 -15.8 -23.7 -10.4Rel. to universe (EUR, ppt) -11.6 -19.7 -22.2 12.9

Rafako Sell Target price PLN 12.4Price (PLN) 10.7 ROCE 2010 15.9% 10e 11e 12e 13eMcap (PLN mn) 744.0 ROE 2010 11.2% Sales (PLN mn) 1,055.0 1,251.0 1,358.5Mcap (EUR mn) 179 Net debt (EURmn, 10) -41 EBITDA margin 5.91% 5.05% 5.82%Free f loat (%) 50.0% Gearing (2010) -38% EBIT margin 4.50% 3.80% 4.60%Free f loat (EUR mn) 90 Sales CAGR 10-13e #W ERT! Net profit margin 4.33% 3.56% 4.11%Shares outst. (mn) 69.6 EPS CAGR 10-13e #W ERT! EPS (PLN) 0.61 0.60 0.75

Dividend/share (PLN) 0.43 0.60 0.75EV/sales 0.54 0.47 0.45EV/EBITDA 9.09 9.31 7.75P/E 16.83 17.21 14.33P/CE 12.81 11.63 10.51 P/BV 1.75 1.78 1.74Dividend yield 4.16% 5.81% 6.98%EV/EBITDA rel. 1.0 1.3 1.2 #WERT!P/E rel. 0.9 1.4 1.6 #WERT!

Performance 1M 3M 6M 12MAbsolute (PLN terms) -12.7% 0.2% -9.4% -15.2%Rel. to sector (EUR, ppt) -5.5 14.2 -3.7 -36.1Rel. to universe (EUR, ppt) -6.0 10.3 -2.2 -12.8

SBO Hold Target price EUR 58.1Price (EUR) 54.0 ROCE 2010 9.3% 10 11e 12e 13e

ROE 2010 11.0% Sales (EUR mn) 307.7 407.6 403.3 423.5Mcap (EUR mn) 864 Net debt (EURmn, 10) 53 EBITDA margin 27.65% 29.57% 29.30% 29.83%Free f loat (%) 64.0% Gearing (2010) 20% EBIT margin 17.10% 21.20% 21.00% 22.00%Free f loat (EUR mn) 553 Sales CAGR 10-13e 13.9% Net profit margin 8.88% 12.67% 12.98% 13.80%Shares outst. (mn) 16.0 EPS CAGR 10-13e 39.9% EPS (EUR) 1.71 3.24 3.28 3.67


Performance 1M 3M 6M 12MAbsolute (EUR terms) -20.2% -19.5% -14.2% 27.0%Rel. to sector (EUR, ppt) -9.7 -0.8 -4.5 9.9Rel. to universe (EUR, ppt) -10.3 -4.6 -3.0 33.2

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PalfingerATX (Rebased)DJ EURO STOXX Industria l Goods & Services (Rebased)

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RafakoW IG (Rebased)DJ EURO STOXX Industrial Goods & Services (Rebased)

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SBOATX (Rebased)DJ EURO STOXX Industrial Goods & Services (Rebased)



Zumtobel Accumulate Target price EUR 20.5Price (EUR) 15.6 ROCE 2010 9.4% 10 11e 12e 13e

ROE 2010 14.3% Sales (EUR mn) 1,228.2 1,327.5 1,447.3 1,573.5Mcap (EUR mn) 665.9 Net debt (EURmn, 10) 247 EBITDA margin 10.36% 10.53% 11.30% 11.73%Free f loat (%) 49.0% Gearing (2010) 65% EBIT margin 6.17% 6.57% 7.39% 7.78%Free f loat (EUR mn) 326 Sales CAGR 10-13e 9.0% Net profit margin 4.29% 4.85% 5.66% 6.15%Shares outst. (mn) 42.8 EPS CAGR 10-13e - EPS (EUR) 1.19 1.50 1.91 2.25


Performance 1M 3M 6M 12MAbsolute (EUR terms) -6.2% -27.7% -28.2% 17.8%Rel. to sector (EUR, ppt) 4.2 -9.0 -18.4 0.7Rel. to universe (EUR, ppt) 3.7 -12.8 -16.9 24.0

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ZumtobelATX (Rebased)DJ EURO STOXX Industrial Goods & Services (Rebased)

Sector Insight Insurance


– Estimates to be increased for PZU – medium-term outlook might soften, though – VIG saw again strong premium growth in CEE – despite estimates to be cu slightly view on stock remains positive – UNIQA below expectations – PIIGS exposure 8.8% of financial assets

PZU presented strong 1H11 figures, beating both our and consensus estimates. Gross written premiums increased 3.8% to PLN 7,676mn, which was roughly in line with expectations. However, the operating result and net result came in better than expected. The main reasons for this favorable development were improved profitability in the property and casualty segments, mainly in relation to motor and property insurance products, and a lack of natural catastrophes (in 1H11, PZU’s results were burdened by a net amount of PLN 394mn.

We expected steady development of PZU’s operating results. Since the figures for 1H11 were significantly higher than our estimates, we have to increase our estimates. We are also looking for other positive earnings revisions in that regard. While we are optimistic in the short term, we have become more cautious in the medium term. An economic slowdown is becoming more and more likely; this would also have an impact on PZU’s top line. At the moment, the Polish market seems to be very attractive. We can see a hardening of premiums in the property and casualty business and favorable development in the life business. The outstanding balance sheet confirms our positive stance on the share.

Vienna Insurance Group presented its 1H11 figures, which included the top line increasing by 3.1% to EUR 4.73bn. The property and casualty business grew by 7.6% to EUR 2.56bn, while life insurance premium income declined by 2.7% to EUR 1.99bn, due mainly to the significant drop in single-premium income in Austria and Liechtenstein. Region-wise, Austria faced a premium decline of 3.8%, which, however, was compensated for by strong growth of 14.4% in the CEE region. The Czech Republic (+12%) and Poland (+43.7%) registered especially outstanding growth rates. As a consequence, VIG was ranked no. 3 in Poland for the first time. Also for the first time, the CEE business not only contributed more premium income but also more than 50% of the group’s bottom line.

The combined ratio improved from 98.3% to 97.1%. The company’s pre-tax profit rose by 10.4% to EUR 282.2mn, while VIG’s bottom line increased 9.5% to EUR 215.1mn. The company reiterated its guidance for low percentage growth of premium for the FY, as well as pre-tax growth of some 10%. However, the guidance was based on the assumption that the economic and legal framework would not deteriorate significantly. VIG presented EPS net of hybrid interests for the first time. The company has a hybrid capital position of slightly below EUR 500mn, with an interest rate of 8%. The impact on the company’s bottom line (after tax) is some EUR 30mn or EUR 0.23 per share. We will also deduct the hybrid interest from our EPS estimates in future. In addition, we will also include some more conservative assumptions regarding the overall economic outlook in our next update. Hence, we will also cut our target price; however, we will stick to our positive stance on the share. In the conference call, management said that its current solvency ratio amounts to 210-220%. The company’s overall sovereign debt exposure in PIIGS countries currently amounts to EUR 109mn, which is approx. 0.4% of the group’s total financial assets. Compared to other composite insurers, this number is quite low. Allianz and AXA have both invested 7.7% in PIIGS countries, while the Italian-based Generali has almost 20% of its total financial assets invested in sovereign debt in these countries.

UNIQA presented its 1H11 results, including gross written premiums increasing some 1.6% to EUR 2,901mn, below our estimated EUR 2,964mn. Including the savings portion of premiums from unit-linked and index-linked life insurance, the top line declined 1.1% to EUR 3,226mn. The reason for this weaker than expected development of the top line was the significantly declining single premiums in the life insurance business, which recorded a drop of almost a third, to EUR 364mn. The recurring premium income, on the other hand, showed a healthy increase of 5.3% to EUR 2,828mn. Region-wise, Austria recorded a premium decline of 2.5%, while Western Europe registered a rise of 2.5%. The CEE region, however, disappointingly stagnated at the same level as last year. The combined ratio fell to 100.7% (from 105.2% in 1H10). Thanks to a lack of natural catastrophes, the loss ratio sank to 66.8% (from 71%). The cost ratio also slightly declined to 33.9% (from 34.1%). Net investment income fell 39.3% to EUR 378mn, partly due to a write-down of Greek sovereign debt exposure of EUR 58mn. As a result, pre-tax profit slightly declined to EUR 72mn and therefore missed our expectation of EUR 79mn. The net result also fell short of our expectations, declining 12.3% to EUR 34mn.



UNIQA also showed its current PIIGS sovereign debt exposure, which still amounts to EUR 1,578mn (or 8.8% of the group’s financial assets) and thus exceeds the group’s shareholders’ equity of EUR 1,277mn (excl. minorities). In the conference call, management said that, for the rest of 2011, it can be assumed that the positive trend in the core operational business will continue to be positive. Nevertheless, the measures required for the group’s repositioning in the view of the capital increase planned for 2013 will already have a negative impact in 2011. It is not the first time that we will probably have to cut our EPS estimates, at least for the current fiscal year. Of more concern to us is the low equity ratio 5.3% (VIG has 12.7%; Allianz and AXA have 7.1% and 6.9%, respectively). The sovereign debt PIIGS exposure is also extremely high. Due to the fact that UNIQA (1) has a rather weak balance sheet and (2) is still traded at high multiples (P/E 2011 >20x before negative earnings revisions), we still recommend that investors not invest in this stock. We will incorporate the overall weaker economic outlook and hence also reduce our target price. We keep our negative stance on the share.




Aksigorta TRY 145.4 -0.3% 2.6% 3.5% -0.7% 1.2% 1.5% #WERT! -29.7% -35.8% -41.5% -51.5%Anadolu Hayat TRY 383.9 17.1% 20.3% 22.9% 24.3% 23.8% 25.7% #WERT! -16.4% -26.1% -20.5% -36.1%Anadolu Sigorta TRY 164.5 2.5% 3.3% 3.7% 1.7% 2.2% 2.2% #WERT! -29.0% -33.8% -35.7% -44.0%Gunes Sigorta TRY 110.3 -6.2% -1.6% -2.1% -2.3% -0.6% -0.6% #WERT! -22.0% -27.9% -9.0% -24.9%PZU PLN 7,357.4 20.6% 20.7% 19.2% 17.6% 21.4% 23.6% 24.5% 24.3% -9.8% -13.5% -1.4% -9.9%Uniqa EUR 1,883.7 3.5% 7.5% 7.6% 8.5% 2.8% 3.3% 3.5% 3.9% -4.0% -12.9% -14.5% -4.7%Vienna Insurance Group EUR 4,185.6 9.5% 10.4% 10.3% 10.2% 5.9% 6.5% 6.6% 6.7% -12.2% -16.4% -22.9% -12.6%Yapi Kredi Sigorta TRY 414.4 15.1% -1.5% -0.9% 7.0% -0.7% -0.4% #WERT! -24.5% -27.7% -18.8% -12.6%Median - - 6.5% 5.4% 5.7% 10.2% 4.4% 2.7% 2.9% #WERT! - - - -Allianz SE EUR 42,023 11.4% 10.9% 11.5% 11.3% 6.7% 7.4% 8.1% 8.1% 0.4% -12.4% -7.9% 3.8%AXA S.A. EUR 31,225 7.9% 9.0% 8.9% 9.2% 4.9% 7.3% 7.2% 7.6% -9.7% -14.2% -12.6% -6.9%Assicurazioni Generali S.p.AEUR 20,878 9.7% 12.1% 12.5% 12.3% 4.2% 5.0% 5.5% 6.2% -4.0% -16.9% -15.4% -13.8%Mapfre S.A. EUR 7,668 14.3% 14.1% 13.9% 13.0% 8.4% 9.6% 9.4% 9.6% 2.3% -10.5% 0.8% -3.5%Sampo Oyj EUR 12,157 12.4% 13.5% 13.5% 13.5% 25.9% 36.9% 37.2% 38.9% 1.4% -3.9% 0.1% 14.1%Median Total - 113,951 11.4% 12.1% 12.5% 12.3% 6.7% 7.4% 8.1% 8.1% - - - -EuroStoxx Insurance 198,566 9.7% 9.8% 11.0% 10.9% 7% 9% 9% 8% -2.8% -12.0% -17.8% -11.4%CEE to Peer, Prem/Disc - -43% -56% -55% -17% -35% -63% -65% #WERT! - - - -

ROE EBT margin Performance (EUR terms)

2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAksigorta nm 34.4 26.6 0.8 0.9 0.9 0.0% 1.9% 2.4%Anadolu Hayat 18.2 9.1 8.1 3.0 2.0 1.8 3.8% 7.5% 8.4%Anadolu Sigorta 16.9 13.2 12.4 0.4 0.5 0.4 0.0% 0.0% 0.0%Gunes Sigorta nm nm nm 0.9 1.1 1.2 0.0% 0.0% 0.0%PZU 12.0 10.7 10.4 10.2 2.3 2.1 1.9 1.7 3.7% 4.1% 4.2% 4.5%Uniqa 45.0 18.5 16.8 14.2 1.6 1.3 1.2 1.2 2.7% 3.0% 3.0% 3.8%Vienna Insurance Group 13.1 9.4 8.9 8.3 1.2 0.9 0.9 0.8 2.6% 3.4% 3.7% 4.0%Yapi Kredi Sigorta 18.6 nm nm 2.6 3.1 3.1 2.2% 0.0% 0.0%Median CEE 17.5 12.0 11.4 10.2 1.4 1.2 1.2 1.2 0.0 0.0 0.0 0.0Allianz SE 8.3 8.1 7.2 6.8 0.9 0.9 0.8 0.8 4.9% 5.1% 5.6% 6.1%AXA S.A. 7.9 6.7 6.4 5.9 0.6 0.6 0.6 0.5 5.1% 5.6% 6.3% 7.0%Assicurazioni Generali S.p.A. 12.2 9.2 8.3 7.7 1.2 1.1 1.0 0.9 3.4% 4.3% 4.8% 5.2%Mapfre S.A. 8.0 7.6 7.2 7.0 1.1 1.1 1.0 0.9 6.0% 6.4% 6.8% 7.1%Sampo Oyj 11.0 9.6 9.0 8.3 1.4 1.3 1.2 1.1 5.3% 5.7% 6.1% 6.5%Median Total 11.0 9.6 9.0 8.3 1.4 1.3 1.2 1.1 5.1% 5.6% 6.1% 6.5%EuroStoxx Insurance 8.0 8.6 7.1 6.4 0.8 0.8 0.7 0.7 5.5% 5.6% 6.1% 6.5%CEE to Peer, Prem/Disc 59% 25% 28% 22% 3% -5% -1% 4% -54% -57% -55% -38%

2008 2009 2010 2010* 2008 2009 2010 2010* 2008 2009 2010 2010*AksigortaAnadolu HayatAnadolu SigortaGunes SigortaPZUUniqa 0.4 0.3 0.3 0.3 1.3 0.8 1.0 0.9 1.6 1.3 1.6 1.4Vienna Insurance Group 0.4 0.6 0.6 0.5 0.7 1.0 1.0 0.8 1.1 1.6 1.6 1.4Yapi Kredi SigortaMedian CEE 0.4 0.4 0.5 0.4 1.0 0.9 1.0 0.8 1.4 1.5 1.6 1.4Allianz SE (Life) 0.4 0.4 0.4 0 2.7 1.7 1.5 1.6 3.4 3.2 3.0 3.1AXA SA (Group) 0.4 0.4 0.3 0 1.0 1.2 0.8 0.9 1.7 3.2 2.0 2.2Generali (Group) 0.4 0.4 0.3 0 1.2 1.1 0.8 0.8 - - - -Mapfre SA (Life) 0.5 0.5 0.4 0 3.0 3.9 n.a. 1.0 8.4 12.2 n.a. 1.6Sampo Oyj (Life) 1.6 2.0 2.2 2 12.0 8.3 n.a. n.a. 36.4 12.6 n.a. n.a.Median Peer Group 0.4 0.4 0.4 0 2.7 1.7 0.8 0.9 5.9 7.7 2.5 2.2EuroStoxx Insurance - - - - - - - - - - - -CEE to Peer, Prem/Disc - - - - - - - - - - - -

P/E PBV Dividend yield

Price/premium Price/Embedded Value Price/NAV




Aksigorta Under review Target price TRY Price (TRY) 1.2 Op. profit margin (10) -0.9% 10e 11e 12e 13eMcap (TRY mn) 358 ROE (2010) -0.3% GW Premium (TRY mn) 886.3 1,019.2 1,146.6Mcap (EUR mn) 145 Combined ratio (2010) Net earned prem. (TRY mn) 629.3 727.7 823.3 Free f loat (%) 38.0% EmbV (TRY mn, 2010) EBT. (TRY mn) -5.8 12.0 16.8 Free f loat (EUR mn) 55 GPW CAGR 10-13e #WERT! Net prof it margin -0.52% 0.94% 1.17% #WERT!Shares outst. (mn) 306.0 EPS CAGR 10-13e #WERT! EPS (TRY) -0.02 0.03 0.04

Dividend/share (TRY) 0.00 0.02 0.03Combined ratio Claims rat io Cost ratioP/E nm 34.36 26.62P/BV 0.82 0.95 0.93Dividend yield 0.00% 1.89% 2.44%P/BV rel. 0.6 0.8 0.8 #WERT!P/E rel. - 2.9 2.3 #WERT!


Anadolu Hayat Under review Target price TRYPrice (TRY) 3.2 Op. profit margin (10) 32.7% 10 11e 12e 13eMcap (TRY mn) 945 ROE (2010) 17.1% GW Premium (TRY mn) 357.6 501.5 564.2Mcap (EUR mn) 384 Combined ratio (2010) 2.3 Net earned prem. (TRY mn) 265.2 372.4 418.9Free f loat (%) 17.0% EmbV (TRY mn, 2010) EBT. (TRY mn) 86.8 119.1 145.3Free f loat (EUR mn) 146 GPW CAGR 10-13e #WERT! Net prof it margin 19.97% 19.00% 20.60% #WERT!Shares outst. (mn) 300.0 EPS CAGR 10-13e #WERT! EPS (TRY) 0.24 0.32 0.39

Dividend/share (TRY) 0.16 0.22 0.26Combined ratioClaims rat ioCost ratioP/E 18.16 9.14 8.13P/BV 2.97 1.96 1.77Dividend yield 3.82% 7.51% 8.36%P/BV rel. 2.1 1.6 1.5 #WERT!P/E rel. 1.0 0.8 0.7 #WERT!


Anadolu Sigorta Under review Target price TRY Price (TRY) 0.8 Op. profit margin (10) 2.2% 10e 11e 12e 13eMcap (TRY mn) 405 ROE (2010) 2.5% GW Premium (TRY mn) 1,420.5 1,633.5 1,837.7Mcap (EUR mn) 165 Combined ratio (2010) 132.4 Net earned prem. (TRY mn) 1,108.0 1,277.4 1,440.8 Free f loat (%) 42.7% EmbV (TRY mn, 2010) EBT. (TRY mn) 24.4 35.3 40.8Free f loat (EUR mn) 70 GPW CAGR 10-13e #WERT! Net prof it margin 1.37% 1.73% 1.77% #WERT!Shares outst. (mn) 500.0 EPS CAGR 10-13e #WERT! EPS (TRY) 0.04 0.06 0.07

Dividend/share (TRY) 0.00 0.00 0.00Combined ratio Claims rat ioCost ratioP/E 16.86 13.23 12.42P/BV 0.40 0.47 0.45Dividend yield 0.00% 0.00% 0.00%P/BV rel. 0.3 0.4 0.4 #WERT!P/E rel. 1.0 1.1 1.1 #WERT!


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Anadolu HayatISE 100 (Rebased)DJ EURO STOXX Insurance (Rebased)

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AksigortaISE 100 (Rebased)DJ EURO STOXX Insurance (Rebased)

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Anado lu SigortaIS E 100 (Rebased)DJ E URO STOXX Insurance (Rebas ed)



Gunes Sigorta Under review Target price TRY Price (TRY) 1.8 Op. profit margin (10) -4.0% 10e 11e 12e 13eMcap (TRY mn) 272 ROE (2010) -6.2% GW Premium (TRY mn) 772.0 887.8 998.8Mcap (EUR mn) 110 Combined ratio (2010) -1.4 Net earned prem. (TRY mn) 440.0 506.9 571.3 Free f loat (%) 20.8% EmbV (TRY mn, 2010) EBT. (TRY mn) -17.7 -5.0 -6.1 Free f loat (EUR mn) 23 GPW CAGR 10-13e #WERT! Net prof it margin -1.83% -0.45% -0.49% #WERT!Shares outst. (mn) 150.0 EPS CAGR 10-13e #WERT! EPS (TRY) -0.09 -0.03 -0.03

Dividend/share (TRY) 0.00 0.00 0.00Combined ratio Claims rat io Cost ratioP/E nm nm nmP/BV 0.93 1.13 1.16Dividend yield 0.00% 0.00% 0.00%P/BV rel. 0.7 0.9 1.0 #WERT!P/E rel. - - - #WERT!

Performance 1M 3M 6M 11MAbsolute (TRY terms) -19.9% -22.6% 0.6% -22.6%Rel. to sector (EUR, ppt) -12.8 -14.7 0.8 -16.5Rel. to universe (EUR, ppt) -12.1 -13.0 2.2 -18.7

PZU Accumulate Target price PLN 400.0Price (PLN) 354.0 Op. profit margin (10) 10e 11e 12e 13eMcap (PLN mn) 30,569 ROE (2010) 20.6% GW Premium (PLN mn) 14,279.8 14,548.1 14,979.7 15,464.3Mcap (EUR mn) 7,357 Combined ratio (2010) 831.6 Net earned prem. (PLN mn) 14,144.1 14,326.1 14,713.8 15,180.6Free f loat (%) 54.8% EmbV (TRY mn, 2010) 5,987.3 EBT. (PLN mn) 3,057.8 3,429.6 3,665.8 3,750.5Free f loat (EUR mn) 4,032 GPW CAGR 10-13e 1.9% Net prof it margin 17.13% 18.86% 19.58% 19.40%Shares outst. (mn) 86.4 EPS CAGR 10-13e -5.5% EPS (PLN) 28.33 31.77 33.96 34.75

Dividend/share (PLN) 12.50 14.00 15.00 16.00Combined ratioClaims rat io Cost ratio P/E 12.01 10.67 10.42 10.19P/BV 2.29 2.13 1.90 1.71Dividend yield 3.67% 4.13% 4.24% 4.52%P/BV rel. - 1.7 1.6 1.5P/E rel. - 0.9 0.9 1.0

Performance 1M 3M 6M 11MAbsolute (PLN terms) -6.3% -9.2% 3.1% -9.2%Rel. to sector (EUR, ppt) -0.6 -0.3 8.4 -1.5Rel. to universe (EUR, ppt) 0.0 1.4 9.8 -3.7

Uniqa Reduce Target price EUR 13.8Price (EUR) 13.3 Op. profit margin (10) 3.0% 10 11e 12e 13e

ROE (2010) 3.5% GW Premium (EUR mn) 5,379.1 5,521.3 5,733.0 5,995.9Mcap (EUR mn) 1,884 Combined ratio (2010) -9.5 Net earned prem. (EUR mn) 5,140.8 5,237.0 5,437.5 5,686.1Free f loat (%) 8.0% EmbV (TRY mn, 2010) 2,168.0 EBT. (EUR mn) 152.8 182.2 200.8 232.6Free f loat (EUR mn) 151 GPW CAGR 10-13e 4.6% Net prof it margin 0.86% 1.85% 1.96% 2.21%Shares outst. (mn) 142.2 EPS CAGR 10-13e 71.7% EPS (EUR) 0.33 0.72 0.79 0.93

Dividend/share (EUR) 0.40 0.40 0.40 0.50Combined ratio 1.05 1.02 1.02 1.01Claims rat io 0.72 0.68 0.68 0.68Cost ratioP/E 45.01 18.49 16.76 14.19P/BV 1.62 1.31 1.25 1.17Dividend yield 2.72% 3.02% 3.02% 3.77%P/BV rel. 1.1 1.1 1.0 1.0P/E rel. 2.6 1.5 1.5 1.4

Performance 1M 3M 6M 11MAbsolute (EUR terms) -4.0% -12.9% -14.5% -12.9%Rel. to sector (EUR, ppt) 5.2 0.4 -4.7 3.7Rel. to universe (EUR, ppt) 5.9 2.0 -3.3 1.5

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Vienna Insurance Group Buy Target price EUR 50.0Price (EUR) 32.7 Op. profit margin (10) 6.5% 10 11e 12e 13e

ROE (2010) 9.5% GW Premium (EUR mn) 8,593.0 8,873.0 9,393.5 9,871.9Mcap (EUR mn) 4,186 Combined ratio (2010) 172.7 Net earned prem. (EUR mn) 7,860.4 8,196.7 8,680.0 9,126.5Free f loat (%) 29.0% EmbV (TRY mn, 2010) 5,062.7 EBT. (EUR mn) 507.8 580.2 616.4 661.1Free f loat (EUR mn) 1,214 GPW CAGR 10-13e 5.3% Net prof it margin 4.42% 5.02% 5.02% 5.12%Shares outst. (mn) 128.0 EPS CAGR 10-13e 10.4% EPS (EUR) 2.97 3.48 3.68 3.95

Dividend/share (EUR) 1.00 1.10 1.20 1.30Combined ratio 0.98 0.96 0.96 0.00Claims rat io 0.67 0.66 0.66 0.00Cost ratioP/E 13.11 9.40 8.88 8.28P/BV 1.20 0.94 0.88 0.82Dividend yield 2.57% 3.36% 3.67% 3.98%P/BV rel. 0.9 0.8 0.7 0.7P/E rel. 0.7 0.8 0.8 0.8


Yapi Kredi Sigorta Under review Target price TRYPrice (TRY) 12.8 Op. profit margin (10) 8.8% 10e 11e 12e 13eMcap (TRY mn) 1,020 ROE (2010) 15.1% GW Premium (TRY mn) 790.4 908.9 1,022.5Mcap (EUR mn) 414 Combined ratio (2010) 700.0 Net earned prem. (TRY mn) 632.3 722.6 807.8Free f loat (%) 33.7% EmbV (TRY mn, 2010) EBT. (TRY mn) 55.7 -6.4 -3.9Free f loat (EUR mn) 140 GPW CAGR 10-13e #WERT! Net prof it margin 5.64% -0.56% -0.30% #WERT!Shares outst. (mn) 80.0 EPS CAGR 10-13e #WERT! EPS (TRY) 0.56 -0.06 -0.04

Dividend/share (TRY) 0.22 0.00 0.00Combined ratioClaims rat ioCost ratioP/E 18.59 nm nmP/BV 2.57 3.12 3.15Dividend yield 2.15% 0.00% 0.00%P/BV rel. 1.8 2.5 2.6 #WERT!P/E rel. 1.1 - - #WERT!


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Sector Insight Media


– Agora 2Q11 results beat market consensus – CME beats market consensus; strong local currencies supported results – TVN 2Q11 results slightly below our estimates, missing market consensus – Cyfrowy 2Q11 results beat estimates, recent acquisition pushed financials up y/y – Slight increase in estimates for Austrian Post after strong results

Agora released its 2Q11 figures, with revenues at PLN 319.3mn, up 13.5% y/y, slightly above our estimate of PLN 310.3mn. EBITDA reached PLN 52.3mn, up 13.0% y/y, with EBIT at PLN 26.4mn, up 9.5% y/y, and net profit at PLN 21.5mn, up 7% y/y. Revenues were almost in line with our expectations. Total ad revenues reached PLN 194.3mn (0.5% below our estimate). Circulation revenue was down 4.5% y/y to PLN 49.3mn. Agora was able to keep its operating costs under control, despite the significant growth of raw materials (up 35.4% y/y – newsprint paper, energy, etc.). Operating costs were improved via the reduced budget on advertising and marketing (down 20.2%, or PLN 8mn). On the other hand, it had a negative impact on the circulation of the flagship, Gazeta Wyborcza (down more than 10% y/y). Operational costs were up 13.9%, while revenues were up 13.5% y/y. Management reiterated its total Polish ad market growth at 3-5% y/y. This is basically in line with the view of TVN, which yesterday confirmed its outlook of low single-digit growth in 2011. Agora clearly did better than the market anticipated, although the market consensus was set relatively low. Agora is cash positive, is traded at P/E 2011e of close to 10 and seems to be the safe play in the current market environment.

CME released its 2Q11 results, more or less in line with our estimates, but significantly above the market consensus. Results on a y/y basis were positively influenced by the strong local currencies against the USD. The CZK added some 19%, the EUR 13%, while the RON added some 14.5%. Revenues reached USD 249.7mn (up 23.8% y/y), slightly above our estimates at USD 239.1mn (+4.4%) and the market consensus at USD 234.4mn (+6.5%). OIBDA significantly increased and reached USD 62.7mn (up 35.7% y/y), a notch above our estimates at USD 61.5mn (+1.9%), while significantly above the market consensus at USD 56.4mn (+11.2%). The net profit level was partly harmed by a one-off cost of approx. USD 4.6mn relating to the recent debt repurchase and issuance of new convertible bonds, while supported by FX gains in the total amount of USD 4.1mn. The cost side developed almost in line with our estimates (no major surprises at all). Looking at the respective markets, the Czech operations, largest for CME, saw revenues up more than 15% y/y in USD, (excluding positive FX movement, the Czech operation was slightly down). The rebound continued in Slovenia and Croatia, where revenues increased more than 9% y/y (Slovenia) and 20% y/y (Croatia) in local currencies (or up 26% y/y and up 35% y/y, respectively, in USD). Slovakian operations delivered strong figures as well, having added more than 5% y/y (in local currency) and up 20.7% y/y in USD. On the other hand, Romania was still down almost 8% y/y (in local currency), as the TV ad market in Romania is still bottoming.

The seasonally strong 2Q results showed that the all of CME’s operations (excluding Romania) reported strong figures. Moreover, CME was able to increase OIBDA in almost every one of its markets (Czech Republic +13.7% y/y, Croatia +54% y/y, Slovakia +160% and Slovenia by 33% y/y, while Romania was down 13% y/y). Management is still confident (as usual) towards ad market development in 2H11, as it expects all of its markets to grow in 2H11 (they previously expected all markets to grow in 2011). CME is fully on track to reach our FY 2011 estimates (OIBDA at USD 167.6mn) and we do not change our recommendation.

TVN released its 2Q11 results, with revenues at PLN 723.5mn (up 9.9% y/y), EBITDA at PLN 223.7mn (down 1.3% y/y), EBIT at PLN 158.1mn (down 3.1% y/y) and net profit at PLN 67.9mn. The results were a notch below our estimates, but significantly below the market consensus. The main segments were in line with our estimates. The TV segment achieved EBITDA of PLN 209mn, in line with our estimate of PLN 212mn. The online segment experienced more than 22% revenue growth, with EBITDA at PLN 26.6mn, just below our estimate of PLN 27.7mn. On the other hand, the ‘n’ platform posted strong figures, with positive EBITDA at PLN 7.2mn, while we expected only PLN 1.8mn. The main negative surprise came from the higher than expected growth of head office expenses, which were at PLN -19.1mn (last year PLN -9.1mn). The TV ad market in Poland increased by 6.5% y/y in 2Q, while TV ad revenues grew 6.3% y/y, due to the slight decrease in market share (34.7%, previously: 35.2%).

TVN reported relatively good figures, which were more or less in line with our estimates (excluding the growth in head office costs). The Polish TV ad market added some 6.5% y/y in 2Q, which is positive news. Moreover, TVN seems to be confident regarding the future as presented in its 2011 and 2012 outlook, although this was below



our forecast and the market consensus. TVN sees 2011 EBITDA at PLN 680mn (market consensus at PLN 755mn), while in 2012, EBITDA could reach PLN 770mn (market consensus PLN 895mn). TVN expects TV ad market growth in low single digits in 2011, but it expects improvements in 2012 (upper single digits). The positive news is the better than expected performance of the ‘n’ platform, which was supported by higher ARPU (up 4.5% y/y).

Cyfrowy released its 2Q11 figures, with revenues at PLN 628.4mn, up 66.6% y/y, in line with the market consensus or PLN 629mn. EBITDA reached PLN 217.5mn, up 100% y/y and almost 8% above the market consensus. EBIT reached PLN 172.8mn, up 92.5% y/y (6% above consensus), with net profit of PLN 69.5mn, up 3.7% y/y. The DTH segment performed more or less in line with our estimates (almost flat q/q in terms of new additions, ARPU at PLN 36.3 – in line with estimates), while the recent acquisition of Telewizja Polsat (April 20) significantly pushed up Cyfrowy’s financials y/y. Moreover, it performed markedly better compared to our estimates. Ad revenues reached PLN 207mn, well above our estimate of PLN 171mn, which weighed positively on the operating side as well. Cyfrowy was able to increase its TV ad market share from 21.9% in 2Q10 to 23% in 2Q11, mainly due to strong performance in audience share (up 2.5% to 21.2% in the 16-49 all day audience share), which pushed its financials up. Moreover, this will have a positive impact on the coming quarters, as Cyfrowy will have greater power to attract new advertisers and outperform the market.

Cyfrowy performed markedly better compared to our forecast and the market consensus. Cyfrowy is able to increase its audience and market share and monetize it, which is definitely positive news. It seems that Cyfrowy is in better shape to deliver strong results in the quarters to come compared to TVN, which is losing market share. Given the current share price, we prefer a long position in Cyfrowy before TVN.

Austrian Post presented strong figures for the first half of the current fiscal year. On a comparable basis (considering the deconsolidation of the meiller companies), revenues increased 2.9% to EUR 1,138mn. Top line growth was supported by strong development of the Parcel & Logistics division, which recorded revenue growth of 6.2%. The Mail division registered like-for-like growth of 4.6%, while the Branch Network division once again reported declining revenues (-6.2%), due to Austrian Post’s restructuring efforts.

EBITDA came in at the same level of the previous year (EUR 124.8mn), despite the fact that the Austrian Post had to build provisions for under-utilization in the amount of EUR 15.6mn. EBIT increased 9.1% to EUR 81.3mn, while net profit went up 14.7% to EUR 62mn and therefore was a touch above our forecast and the consensus estimate. Strong operating cash flow of EUR 76.1mn (+29.4% y/y) underlined the quality of Austrian Post’s 1H11 figures. The cash flow before changes in working capital amounted to EUR 93.3mn and thus increased by 15.6% y/y.

After the strong development of the company’s top line in 1H11, management is now optimistic that it will achieve a revenue growth rate similar to that for the first half of this year (2.9%). Until now, Austrian Post expected growth of 1-2%. Management reiterated that the EBITDA margin should come in at the upper end of the target range of 10-12%.

We increased our estimates for 2011-13 to EUR 1.83, EUR 1.90 and EUR 1.93, respectively. Our new estimates are based on the assumption of slight GDP growth in Austria in the coming year. We are aware that a possible recession would also have an impact on stocks such as Austrian Post. To reflect the economic slowdown, we have cut our EBIT margin assumption for the terminal value to 7%. We therefore cut our target price to EUR 26 (from EUR 27.1), but reiterate our Buy recommendation.

Better than expected second quarter from Allami Nyomda. Allami Nyomda posted a HUF 227mn net profit in the second quarter, better than our and the consensus expectation. The better than expected bottom line is due mainly to the lower than expected tax payment in 2Q11. The 121% increase in net result y/y is a result of the low basis, as 2Q10 was hit by a one-off negative effect. The total revenue of HUF 4.2bn is in line with our expectations and with the revenue achieved in the same period last year. Lack of revenue from parliamentary elections was offset by the consolidation of the acquired GPV Mail Services, and also by the improving sales of tax stamps and vehicle registration documents. The company missed our EBIT and EBITDA forecasts, due to the higher than estimated operating expenditures. These results show that the recovery was very good at Allami Nyomda, after weak profitability last year. As Hungarians living in foreign countries can now more easily get Hungarian citizenship, ID card and passport sales might be boosted in the second half of the year. This should make it easier for the company to reach its targets. We maintain our profit forecast for 2011 of HUF 1,088mn.




Agora PLN 182.7 5.0% 6.5% 8.0% 8.2% 13.5% 15.0% 15.8% 15.7% -11.8% -31.1% -46.4% -43.1%Allami Nyomda HUF 39.5 15.7% 18.3% 17.8% 17.5% 9.1% 12.2% 12.7% 13.1% -2.3% -7.1% 4.3% 10.1%Austrian Post EUR 1,501.0 17.4% 17.7% 18.0% 17.8% 11.1% 12.0% 11.7% 11.4% 7.7% -1.9% -1.0% 9.5%Cinema City EUR 350.6 16% 15.0% 16.7% 17.7% 17.2% 18.8% 20.9% 21.6% -14.3% -26.6% -26.0% -36.9%CME USD 552.4 12% 0.5% 3.5% 7.0% 14.7% 21.0% 27.7% 29.0% -34.5% -40.5% -37.0% -49.9%Cyfrowy Polsat PLN 952.6 n.m. 26.8% 22.0% 22.1% 27.7% 27.9% 29.4% 31.1% -13.1% -16.3% -9.0% -3.2%Multimedia Polska PLN 250.2 n.m. 22.2% 19.3% 18.0% 53.5% 52.2% 51.9% 51.4% -6.8% -8.9% -8.9% -9.1%TVN PLN 1,202.2 n.m. 18.8% 23.7% 21.9% 28.8% 29.9% 34.6% 33.7% -15.9% -18.4% -18.1% -18.4%Median - - 16% 18% 18% 18% 15% 19% 21% 22% - - - -St. Ives PLC GBP 109 0.0% 0.0% 0.0% 0.0% -5.7% -9.4% -7.9% 6.7%Edipresse I CHF - 585 0.0% 0.0% 0.0% 0.0% 35.6% 34.6% 79.2% 170.4%Roularta Media Group N.V. EUR 277 9.7% 10.4% 10.2% 9.2% 10.8% 11.7% 11.7% 10.9% -8.6% -14.9% -18.7% 26.3%Dogan Yayin Holding A.S. TRY - 786 -20% 0.3% 2% 3.8% 8.0% 9.7% 10.6% 11.3% -10.9% -44.2% -49.9% -43.7%Grupo Televisa S.A. de C.VMXN 7,585 17.4% 15.5% 16.4% 16.3% 38.0% 37.4% 38.1% 38.2% -7.7% -1.2% -8.8% 8.6%TV Azteca S.A.B. de C.V. MXN 1,121 28.6% 18.5% 17.5% 16.1% 40.9% 40.3% 41.1% 40.9% -1.7% 11.3% 11.1% 27.1%ProSiebenSat.1 Media AG EUR 4,039 40.2% 38.3% 37.3% 35.7% 30.2% 30.1% 31.8% 31.8% 0.6% -3.7% -18.3% 32.9%Bloomsbury Publishing PLCGBP 95 5.1% 5.9% 6.1% 6.6% 9.5% 9.8% 9.9% 10.5% -8.8% -14.9% -4.7% -5.7%Median Total - 14,863 9.7% 10.4% 10.2% 10.0% 16.6% 18.0% 20.2% 19.2% - - - -EuroStoxx Media 69,461 12.3% 13.2% 14.3% 15.2% 23% 21% 23% 24% -7.5% -13.8% -19.3% -5.3%CEE to Peer, Prem/Disc - 62% 70% 74% 77% -11% 4% 3% 12% - - - -




2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAgora 12.1 9.2 7.3 6.9 5.3 4.4 3.9 3.7 0.6 0.6 0.6 0.6Allami Nyomda 12.1 9.8 9.4 8.9 7.3 5.6 5.3 5.0 1.8 1.7 1.6 1.5Austrian Post 14.1 12.1 11.7 11.5 9.4 6.8 6.9 6.8 2.4 2.1 2.1 2.0Cinema City 11.0 10.0 7.6 6.1 6.7 6.2 4.9 4.1 1.6 1.4 1.2 1.0CME 5.0 116.1 15.9 7.3 3.6 8.4 5.6 3.9 0.5 0.6 0.5 0.5Cyfrowy Polsat 14.4 18.8 12.7 10.6 11.2 12.3 9.2 7.9 9.7 3.1 2.5 2.2Multimedia Polska 12.8 11.6 11.1 9.9 4.1 4.0 3.8 3.5 2.8 2.4 2.0 1.6TVN 24.5 13.8 9.5 8.7 11.2 8.0 6.3 6.0 2.7 2.5 2.1 1.8Median CEE 12.1 11.6 11.1 8.9 6.7 6.2 5.3 4.1 1.8 1.7 1.6 1.5St. Ives PLC 9.1 6.4 5.5Edipresse IRoularta Media Group N.V. 7.9 6.8 6.5 6.8 5.0 4.4 3.9 4.7 0.8 0.7 0.7 0.6Dogan Yayin Holding A.S. 249.8 35.5 18.8 3.4 2.9 1.4 0.8 0.8 0.7Grupo Televisa S.A. de C.V. 19.3 19.7 17.2 15.8 11.2 12.8 10.3 9.1 3.4 3.1 2.8 2.6TV Azteca S.A.B. de C.V. 12.0 13.8 12.8 12.1 9.3 12.7 12.0 12.5 3.4 2.6 2.2 2.0ProSiebenSat.1 Media AG 9.8 9.0 8.7 8.1 8.1 7.5 3.5 4.6 3.9 3.5 3.3 2.9Bloomsbury Publishing PLC 14.3 12.7 11.8 10.4 8.3 16.5 10.4 12.9 0.7 0.7 0.7 0.7Median Total 10.9 12.8 10.3 10.4 8.3 10.1 3.9 4.7 1.4 0.9 0.8 0.7EuroStoxx Media 12.1 12.2 11.0 10.2 7.5 7.8 7.1 6.4 1.9 1.8 1.7 1.6CEE to Peer, Prem/Disc 11% -9% 8% -15% -20% -39% 34% -12% 32% 99% 102% 106%

2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAgora 0.8 0.6 0.6 0.5 5.8 4.3 3.7 3.3Allami Nyomda 0.7 0.6 0.6 0.6 7.2 4.9 4.7 4.4Austrian Post 0.8 0.7 0.7 0.7 6.9 5.8 5.8 5.8Cinema City 1.0 1.0 0.8 0.6 6.0 5.3 4.0 2.7CME 2.5 2.4 2.1 1.8 nm 11.4 7.8 6.2Cyfrowy Polsat 2.5 3.0 2.5 2.4 9.1 10.6 8.6 7.7Multimedia Polska 3.0 2.6 2.4 2.0 5.6 4.9 4.5 4.0TVN 3.0 2.7 2.5 2.2 10.6 9.1 7.1 6.6Median CEE 1.0 1.0 0.8 0.7 6.4 5.3 4.7 4.4St. Ives PLC 0.3 0.3 3.3 2.2Edipresse IRoularta Media Group N.V. 0.6 0.5 0.4 0.4 5.8 4.2 3.7 3.6Dogan Yayin Holding A.S. 1.3 0.8 0.6 0.6 16.3 8.3 5.7 5.0Grupo Televisa S.A. de C.V. 3.0 2.6 2.4 2.2 7.9 7.0 6.4 5.8TV Azteca S.A.B. de C.V. 1.9 1.7 1.5 1.3 4.7 4.2 3.6 3.3ProSiebenSat.1 Media AG 2.6 1.9 2.0 2.0 8.8 6.4 6.4 6.1Bloomsbury Publishing PLC 0.6 0.5 0.6 0.6 6.6 5.0 6.3 5.4Median Total 1.6 1.0 0.9 0.8 7.2 5.5 5.7 5.0EuroStoxx Media 1.4 1.3 1.2 1.1 7.9 6.6 5.9 5.3CEE to Peer, Prem/Disc -34% 5% -3% -13% -11% -4% -17% -13%

P/CE P/BV

EV/Sales EV/EBITDA

P/E




Agora Hold Target price PLN 27.5Price (PLN) 14.9 ROCE 2010 4.4% 10e 11e 12e 13eMcap (PLN mn) 759 ROE 2010 5.0% Sales (PLN mn) 1,095.7 1,284.5 1,423.2 1,507.8Mcap (EUR mn) 183 Net debt (EURmn, 10) 33.9 EBITDA margin 13.52% 14.99% 15.78% 15.69%Free float (%) 53.5% Gearing (2010) 11% EBIT margin 6.54% 8.19% 9.40% 9.36%Free float (EUR mn) 98 Sales CAGR 10-13e 8.0% Net profit margin 5.53% 6.15% 7.27% 7.31%Shares outst. (mn) 50.9 EPS CAGR 10-13e 24.1% EPS (PLN) 1.19 1.55 2.03 2.16


Allami Nyomda Buy Target price HUF 1010.0Price (HUF) 753.0 ROCE 2010 13.7% 10f 11e 12e 13eMcap (HUF mn) 10,824 ROE 2010 15.7% Sales (HUF mn) 17,129.1 16,765.4 17,342.2 17,944.2Mcap (EUR mn) 40 Net debt (EURmn, 10) 2.3 EBITDA margin 9.14% 12.21% 12.68% 13.14%Free float (%) 29.3% Gearing (2010) 10% EBIT margin 5.17% 7.47% 7.58% 7.75%Free float (EUR mn) 12 Sales CAGR 10-13e 6.4% Net profit margin 5.28% 7.02% 7.22% 7.34%Shares outst. (mn) 14 EPS CAGR 10-13e 3.6% EPS (HUF) 59.91 75.33 80.36 84.66

Dividend/share (HUF) 0.00 47.93 48.96 52.23EV/sales 0.66 0.60 0.60 0.58EV/EBITDA 7.20 4.90 4.70 4.39P/E 12.14 9.84 9.37 8.89P/CE 7.29 5.64 5.30 5.05P/BV 1.80 1.73 1.61 1.51Dividend yield 0.00% 6.47% 6.50% 6.94%EV/EBITDA rel. 1.1 0.9 1.0 1.0P/E rel. 1.0 0.8 0.8 1.0Performance 1M 3M 6M 12MAbsolute (HUF terms) -0.7% -4.3% 4.7% 6.1%Rel. to sector (EUR, ppt) 7.1 8.6 18.3 24.0Rel. to universe (EUR, ppt) 7.6 7.8 15.5 16.3

Austrian Post Buy Target price EUR 26.0Price (EUR) 22.2 ROCE 2010 13.9% 10 11e 12e 13e

ROE 2010 17.4% Sales (EUR mn) 2,351 2,317 2,341 2,366Mcap (EUR mn) 1,501 Net debt (EURmn, 10) 132.4 EBITDA margin 11.11% 11.98% 11.65% 11.35%Free float (%) 47.0% Gearing (2010) 19% EBIT margin 6.63% 7.52% 7.63% 7.47%Free float (EUR mn) 46 Sales CAGR 10-13e 0.1% Net profit margin 5.04% 5.34% 5.49% 5.51%Shares outst. (mn) 67.6 EPS CAGR 10-13e 13.1% EPS (EUR) 1.75 1.83 1.90 1.93

Dividend/share (EUR) 1.60 1.65 1.70 1.75EV/sales 0.77 0.69 0.68 0.66EV/EBITDA 6.90 5.80 5.82 5.77P/E 14.11 12.12 11.69 11.52P/CE 9.44 6.78 6.92 6.77P/BV 2.42 2.12 2.07 2.03Dividend yield 6.47% 7.43% 7.65% 7.88%EV/EBITDA rel. 1.1 1.1 1.2 1.3P/E rel. 1.2 1.0 1.1 1.3Performance 1M 3M 6M 12MAbsolute (EUR terms) 7.7% -1.9% -1.0% 9.5%Rel. to sector (EUR, ppt) 17.1 13.8 13.0 23.4Rel. to universe (EUR, ppt) 17.6 13.0 10.2 15.7

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Cinema City Accumulate Target price PLN 50.0Price (PLN) 28.5 ROCE 2010 13.2% 10e 11e 12e 13eMcap (PLN mn) 1,457 ROE 2010 15.9% Sales (EUR mn) 332.8 327.1 362.9 409.8Mcap (EUR mn) 351 Sales CAGR 10-13e -1.4 EBITDA margin 17.25% 18.78% 20.89% 21.55%Free float (%) 46.1% Gearing (2010) -1% EBIT margin 11.40% 12.16% 14.22% 15.28%Free float (EUR mn) 162 Sales CAGR 10-13e 18.0% Net profit margin 9.54% 10.65% 12.60% 14.06%Shares outst. (mn) 51.1 EPS CAGR 10-13e 23.9% EPS (EUR) 0.62 0.69 0.90 1.13

Dividend/share (EUR) 0.00 0.00 0.00 1.13EV/sales 1.03 1.00 0.83 0.58EV/EBITDA 5.99 5.35 3.97 2.69P/E 10.98 10.01 7.64 6.06P/CE 6.66 6.19 4.93 4.14P/BV 1.62 1.39 1.18 0.99Dividend yield 0.00% 0.00% 0.00% 16.48%EV/EBITDA rel. 0.9 1.0 0.8 0.6P/E rel. 0.9 0.9 0.7 0.7Performance 1M 3M 6M 12MAbsolute (PLN terms) -10.9% -23.0% -22.6% -33.9%Rel. to sector (EUR, ppt) -4.8 -10.9 -11.9 -22.9Rel. to universe (EUR, ppt) -4.4 -11.7 -14.7 -30.6

CME Accumulate Target price USD 23.5Price (USD) 12.4 ROCE 2010 1% 10e 11e 12e 13eMcap (USD mn) 787 ROE 2010 12% Sales (USD mn) 728.4 796.2 878.6 993.0Mcap (EUR mn) 552 Sales CAGR 10-13e 832 EBITDA margin 14.74% 21.05% 27.66% 29.04%Free float (%) 52.1% Gearing (2010) 82% EBIT margin 3.73% 10.88% 18.05% 20.41%Free float (EUR mn) 288 Sales CAGR 10-13e 8.6% Net profit margin -9.77% 0.84% 5.64% 10.82%Shares outst. (mn) 63.5 EPS CAGR 10-13e #ZAHL! EPS (USD) 2.30 0.11 0.78 1.69

Dividend/share (USD) 0.00 0.00 0.00 0.00EV/sales 2.51 2.39 2.14 1.81EV/EBITDA 17.05 11.35 7.75 6.24P/E 5.00 116.10 15.87 7.33P/CE 3.62 8.44 5.63 3.91P/BV 0.54 0.56 0.54 0.50Dividend yield 0.00% 0.00% 0.00% 0.00%EV/EBITDA rel. 2.6 2.1 1.7 1.4P/E rel. 0.4 10.0 1.4 0.8Performance 1M 3M 6M 12MAbsolute (USD terms) -34.3% -41.2% -35.1% -44.3%Rel. to sector (EUR, ppt) -24.8 -25.5 -21.1 -30.4Rel. to universe (EUR, ppt) -24.4 -26.3 -23.9 -38.1

Cyfrowy Polsat Accumulate Target price PLN 19.0Price (PLN) 14.8 ROCE 2010 65% 10e 11e 12e 13eMcap (PLN mn) 3,958 ROE 2010 74% Sales (PLN mn) 1,501 2,469 2,923 3,057Mcap (EUR mn) 953 Sales CAGR 10-13e -9 EBITDA margin 27.71% 27.94% 29.44% 31.07%Free float (%) 34.8% Gearing (2010) -10% EBIT margin 22.71% 22.39% 24.04% 25.72%Free float (EUR mn) 331 Sales CAGR 10-13e 24.4% Net profit margin 17.54% 10.61% 13.79% 15.82%Shares outst. (mn) 268.3 EPS CAGR 10-13e 11.9% EPS (PLN) 0.98 0.75 1.16 1.39

Dividend/share (PLN) 0.00 0.49 0.75 0.90EV/sales 2.51 2.96 2.53 2.40EV/EBITDA 9.05 10.58 8.60 7.72P/E 14.45 18.80 12.74 10.62P/CE 11.24 12.34 9.16 7.94P/BV 9.72 3.15 2.53 2.19Dividend yield 0.00% 3.46% 5.10% 6.12%EV/EBITDA rel. 1.4 2.0 1.8 1.8P/E rel. 1.2 1.6 1.1 1.2Performance 1M 3M 6M 12MAbsolute (PLN terms) -9.7% -12.2% -4.8% 1.4%Rel. to sector (EUR, ppt) 260.3 311.3 267.3 253.9Rel. to universe (EUR, ppt) 260.7 310.5 264.5 246.1

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Multimedia Polska Hold Target price PLN 10.0Price (PLN) 9.1 ROCE 2010 10.6% 10e 11e 12e 13eMcap (PLN mn) 1,039 ROE 2010 16.1% Sales (PLN mn) 563.6 600.6 632.6 661.0Mcap (EUR mn) 250 Sales CAGR 10-13e 173 EBITDA margin 53.49% 52.23% 51.90% 51.37%Free f loat (%) 18.6% Gearing (2010) 194% EBIT margin 24.05% 24.63% 23.37% 22.72%Free f loat (EUR mn) 46 Sales CAGR 10-13e 5.9% Net profit margin 13.86% 14.28% 14.81% 15.90%Shares outst. (mn) 114.9 EPS CAGR 10-13e 22.0% EPS (PLN) 0.68 0.75 0.82 0.91


Performance 1M 3M 6M 12MAbsolute (PLN terms) -3.2% -4.4% -4.7% -4.7%Rel. to sector (EUR, ppt) 6.2 11.3 9.3 9.2Rel. to universe (EUR, ppt) 6.7 10.4 6.5 1.5

TVN Buy Target price PLN 21.0Price (PLN) 14.7 ROCE 2010 9.2% 10e 11e 12e 13eMcap (PLN mn) 4,995 ROE 2010 13.0% Sales (PLN mn) 2,498.8 2,745.9 3,050.9 3,213.5Mcap (EUR mn) 1,202 Sales CAGR 10-13e 700 EBITDA margin 28.80% 29.93% 34.58% 0.00%Free f loat (%) 43.6% Gearing (2010) 159% EBIT margin 19.59% 20.95% 26.09% 25.72%Free f loat (EUR mn) 524 Sales CAGR 10-13e 10.9% Net profit margin 7.85% 12.65% 17.31% 17.87%Shares outst. (mn) 340.9 EPS CAGR 10-13e 13.5% EPS (PLN) 0.58 1.02 1.55 1.68


Performance 1M 3M 6M 12MAbsolute (PLN terms) -12.6% -14.3% -14.4% -14.6%Rel. to sector (EUR, ppt) -3.1 1.4 -0.4 -0.6Rel. to universe (EUR, ppt) -2.7 0.5 -3.1 -8.4

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Sector Insight Oil & Gas


– OMV: 2Q figures below expectations, forecast and target price cut – Petkim, Aygaz and Turcas all trailed estimates in 2Q, Tupras continues to outperform

EBIT disappoints in OMV’s second quarter report. In its 2Q11 figures presentation, OMV disappointed on the EBIT line, but was able to beat market estimates on the bottom line. It reported clean CCS EBIT of EUR 468mn (-25% y/y) in 2Q11, clearly trailing our forecast and the market consensus. The average realized crude oil price for OMV was USD 100.2/bbl (vs. USD 94.1/bbl in 1Q11), well below the average Brent price of USD 117.0/bbl in 2Q11, as hedging losses hurt. Clean E&P EBIT was the main reason for the company missing estimates, as it dropped 35% q/q (-22% y/y) to EUR 439mn in the second quarter, due to the oil production in Libya and Yemen standing still throughout the quarter. Exploration expenses increased significantly and the weakening of the USD also weighed on the result. Clean CCS EBIT in the R&M segment did not recover as we expected in 2Q11 (EUR 11mn), as OMV’s own refining margin dropped to a very low level (USD 1.5/bbl). Petrol Ofisi contributed clean CCS EBIT of EUR 20mn to the segment’s result. OMV recorded EUR 11mn in inventory gains. Seasonal effects and sustained margin pressure caused the retreat in the G&P segment’s clean EBIT (EUR 26mn) vs. the previous quarter. While the G&P result was ahead of our forecast, the R&M segment disappointed. Revenues were EUR 7,960mn (+39% y/y) in 2Q11, above our forecast. Clean CCS net profit after minorities was reported at EUR 236mn (-25% y/y), exceeding our estimate and the market consensus (EUR 216mn). This was mainly due to the tax rate being lower than anticipated. The gearing ratio stood at 34% at the end of March 2011. The outlook has not changed much. OMV still expects upstream production to be below the 2010 level, due to the disruption in the MENA region. Production in Yemen has restarted after the damaged pipeline was repaired.

Effects of Libyan outages underestimated, production could have reached low point. The effect of the outages in oil production in Libya and Yemen were clearly underestimated by analysts. This caused forecasts on the E&P EBIT line and tax line to be too high. Thus, the company managed to surpass expectations on the bottom line. In terms of the production rate, 2Q11 could be the low point for this year, with the Haban field in Yemen having been restarted. More importantly, the news on rebels advancing in Libya has sparked hopes of a resumption of oil production in Libya, which has supported the share price in the past weeks. However, the oil price is a risk and, should it fall, profitability in E&P, OMV’s most important segment, could be under pressure going forward. A correction leading to a sustained lower level of oil prices would certainly bite into the company’s financials and require adjustments in our forecasts. On the positive side, it would also limit hedging losses and provide relief for refining margins (at least in the short term).

Estimates cut, target price down to EUR 34.0, Buy maintained. In a company update following the 2Q11 results, we lowered our target price for OMV shares from EUR 40.0 to EUR 34.0, as a consequence of our estimates falling considerably and the multiples-based target value (50% weight) being diminished by the recent market turmoil. Nonetheless, the current upside is still highly attractive and, trading at a P/E of slightly above 6 (on 2011 estimates), the stock is still far from expensive. For 2011, we now expect EPS of EUR 3.73 (vs. EUR 5.13 previously) and EBIT (reported) of EUR 2,528mn. After a disappointing performance in 1H11, we now have lowered our forecasts significantly for the R&M segment for 2011 and beyond. In the upstream segment, we have reduced our forecast for OMV’s realized oil price further and reflected the recent weakness of the USD in our estimates. Additionally, higher exploration expenses weigh on the segment’s profitability forecast.

Petrom posts strong 2Q11 results, exceeding forecasts. Clean CCS EBIT came in at RON 1,266mn (+86% y/y) in 2Q11, well ahead of our forecast (RON 1,141mn) and the market consensus (RON 1,125mn). Petrom managed to top the already strong figure from 1Q11, despite higher exploration costs in the E&P segment and seasonally weak sales in the G&P segment. Clean upstream EBIT remained nearly flat at RON 1,260mn, exceeding our estimate of RON 1,215mn. Clean CCS EBIT in the R&M segment climbed into positive territory, recording profit of RON 9mn in 2Q11 (after a loss of RON -52mn in 1Q11), on the back of seasonally stronger sales in the marketing business, which offset weak refining margins. Seasonally weak sales and margin pressure burdened the gas business, leading to clean EBIT of RON -9mn for the G&P segment. Finally, the bottom line (clean CCS net profit after minorities) arrived at profit of RON 935mn, higher than our estimate of RON 890mn and the market forecast (RON 845mn). Petrom’s outlook for 2011 remains unchanged - for 2011, Petrom expects the Romanian market to continue its gradual recovery. The focus in E&P will be to largely offset the natural decline and unlock potential; in G&P, the start of operations in the power business is planned for 2H11.



Petrom presented another very strong set of results, topping our forecasts and the market consensus. Clearly, the company benefitted from the high level of oil prices throughout the quarter, as one would expect from an upstream-heavy oil and gas company. The downside is that the company is also exposed to falling oil prices, as is currently the case. We have not yet adjusted our 2011 USD 110/bbl forecast for Brent, but could do so in the future, should the sell-off of risky assets continue. For now, we see no reason to change our positive stance on the stock. Separately, representatives of Petrom are negotiating with the Romanian authorities for a three-year postponement of the resources prospecting deadline on 10 blocks. The result of the negotiations will be announced by September 12.

Tupras’ 2Q11 figures were strong and well ahead of market consensus. Clean profitability improved substantially compared to the first quarter. Sales increased 58% y/y to TRY 10,454mn, on the back of increased demand as well as higher crude and oil product prices, while EBITDA arrived at TRY 517mn for 2Q11 (+32% y/y). Whereas EBITDA was boosted by enormous inventory gains in 1Q11 (TRY 289mn), profitability in the second quarter stemmed from strong product demand and a friendlier margin environment. The EBITDA figure beat our estimates by 12% and the market consensus by 37%. Reported net profit after minorities rose 16% vs. the same period last year, standing at TRY 258mn for the first quarter of 2011. This was exactly in line with our forecasts, but 19% above the market consensus. The company produced net profit of TRY 564mn and is on track to meet our TRY 1,091mn forecast for 2011. Sales increased 58% y/y, as capacity utilization (on crude oil processed) reached 77.4% in 2Q11, compared to 70.6% in 2Q10. In 1H11, the utilization rate (crude) reached 72.4% (vs. 62.5% a year earlier), while the overall utilization rate (including semi finished products) was 78.2% (vs. 71.1% in 1H10). Revenues clearly beat our forecast and the market consensus. In 1H11, higher domestic product demand in jet fuel, diesel and asphalts contributed to the increased utilization rates.

Tupras shares are attractive, continuing to beat benchmark margin. Once again, Tupras reported very good results in a challenging market environment. Particularly on a clean basis, the improvement over the previous quarter was substantial. Despite a much friendlier market environment a year ago (the Med complex refining margin was USD 3.55/bbl in 2Q10, vs. USD 1.65/bbl in 2Q11), the company nearly reached the EBITDA level recorded last year. Regardless of the market environment, Tupras’ net refining margin has been beating its benchmark with ease for quite a while now. Strong growth in the Turkish economy, the refinery locations and Tupras’ competitive position help to achieve that. At this point, with volatility at highly elevated levels in all sorts of risky assets, a collapse of oil prices and ensuing inventory losses is among the main risks that could really hurt the company’s financials. However, we do not assume a collapse of oil prices similar to 2008. On the other hand, falling oil prices should provide relief to the refining margin and thus support profitability. Our full-year estimates do not appear to require significant changes. We are comfortable with our target price, while our recommendation would need to be upgraded should prices remain depressed. At these price levels, Tupras shares are among the most attractive in our oil & gas coverage universe.

Aygaz publishes solid 2Q11 figures, but misses market estimates. Aygaz’ 2Q11 figures were solid, despite falling below the market consensus (CNBC-e) on the sales and EBIT lines. Revenues were stable compared to the first quarter of 2011 and 19% above last year’s figure. We attribute this increase to a general rise in product prices. As input prices rose even higher than sales prices, profitability margins retreated compared to 2Q10. Nonetheless, gross profit in 2Q11 was still 10% ahead of 2Q10, arriving at TRY 115mn. Aygaz incurred higher marketing and distribution expenses this year than last year and thus the operating profit fell below last year’s mark and the market consensus. Aygaz recorded EBITDA of TRY 58mn (-7% y/y and -2%) while holding the EBITDA margin steady compared to the previous quarter. EBIT retreated from TRY 46mn in 2Q10 to TRY 43mn in 2Q11. Similarly, reported net profit after minorities declined 7% y/y, standing at TRY 42mn for 1Q11. This was in line with the market consensus. The company produced net profit of TRY 288mn in 1H11. EBIT and net income lines 1Q11 were boosted by the sale of the 49.6% stake in Entek, which produced TRY 197mn in additional income (reported as other operating income).

Forecasts will need to revised downwards. The results were a bit below market expectations, but solid nonetheless. Fuel retailing is a very important part of the company’s business and this sector has been under pressure in Turkey over the past year. Despite having already recorded about 58% of our FY11 net profit estimate in 1H11, Aygaz is now below the pace to reach this projection and thus we will have to revise our forecasts downwards. While the target price will be adjusted accordingly, we still feel comfortable with our Accumulate recommendation.



2Q11 figures well below estimates as Shell-Turcas JV disappoints. Turcas Petrol’s 2Q11 profit lines were much weaker than we had anticipated (there was no reliable consensus available). Sales plunged compared to 2Q10 while increasing vs. the previous quarter, arriving at TRY 3.5mn. From 2011, the gas trading business has been conducted in the SOCAR-Turcas JV, leaving the Turcas Petrol sales line with electricity trading revenues as its only support. Gross profit was marginally higher than our forecast. EBIT trailed our projection and was also below the figure for 2Q10, as the Shell royalty refund (which lifted the other operating income line) was lower than last year. Profit from the Shell-Turcas JV was a huge disappointment, falling to only TRY 0.3mn, while it was above TRY 15mn in 2Q10 as well as 1Q11. The amortization of substantial CAPEX spending associated with the dealer contract renewals in September 2010 is a major burden for the company, depressing profitability. In addition, the weakness of the TRY led to FX losses in the financial result of the Shell-Turcas JV. Turcas Petrol also incurred FX losses for the same reason, which weighed on the bottom line. As a consequence, net profit missed our TRY 25.6mn estimate by a wide margin, dropping to TRY 3.0mn. Similarly, 2Q11 net profit was well below that of the second quarter last year as well as the previous quarter.

Estimates, especially for Shell-Turcas, will need to be cut. Obviously, the second quarter results were disappointing. With Shell-Turcas just barely recording a profit, the reason is easily identified. The amortization of CAPEX spending seems to be a bigger burden for Shell-Turcas’ financials than we expected. Furthermore, we underestimated FX sensitivity in the JV. We will need to make adjustments to our forecasts for Shell-Turcas, which will also impact our valuation of Turcas Petrol negatively. With the TRY sliding further vs. the USD and the EUR in the current quarter, we anticipate FX losses widening in 3Q11. Despite the need for a downward revision of our estimates, the Shell-Turcas JV remains very valuable and the most important part of Turcas Petrol when it comes to our valuation. The estimate cuts to be implemented will likely cause our target price to come down.

Kulczyk Oil’s 2Q11 results in line with estimates, recording operating loss. Oil and gas revenues (solely from KUB-Gas) amounted to USD 4.2mn in 2Q11, beating our estimate marginally. The average selling price of natural gas for KUB-Gas in Ukraine was USD 9.0/Mcf, compared to USD 8.03/Mcf in 1Q11 and 7.93 per Mcf in 4Q10. The operating loss was in line with our forecast at USD -2.3mn in 2Q11. It widened from the previous quarter, as a consequence of higher costs. On the EBITDA level, the company slid from a small profit in 1Q11 back to a loss of USD 0.9mn. The net loss amounted to USD 3.8mn in 2Q11. The cash position at the end of June 2011 was USD 9.4mn (excluding restricted cash) after KUB-Gas drew the first USD 10mn in loan proceeds from the USD 40mn facility granted by the EBRD.

Funding issues could lead to cuts in exploration activities and revision of our valuation. The results were very much in line with our forecasts. The operation in Ukraine is advancing and production should rise further. As expected, costs have risen from 2Q11, as the company incurred expenses in connection with the planned listing on the AIM in London. As we have indicated in our last reports, KOV will need to raise funds in order to finance its exploration activities. Funding issues are the main risk for such an early stage E&P asset. With more time passing without positive results in the search for additional sources of funds, cuts in exploration spending become more likely and thus a revision of our valuation of these assets becomes increasingly likely as well.

2Q11 results review. In general, Polish oil & gas companies reported results that were in line with expectations; only Lotos’ result was below the market estimate. However, the result was more or less in line with our estimate.

MOL to spend USD 1.0bn on new oil deposits, instead on Lotos. The CEO of MOL disclosed that the company may spend around USD 1.0bn on investments in the near future. He added that the company is currently considering purchasing new oil deposits. Earlier, the company’s management suggested that MOL may purchase a 53% stake of Lotos that is currently being sold by the Polish state Treasury.

PKN: Refining market still challenging. The company revealed that the macro environment in July was slightly worse on a m/m basis. The model refining margin stood in July at USD 2.3/bbl, while the BU differential arrived at USD 1.2/bbl. In June, the model refining margin was lower at USD 1.4/bbl, but it was supported by the higher BU differential, which stood at USD 2.3/bbl. Moreover, petchem business refining margins dropped in July to EUR 687/t, vs. the EUR 807/t seen a month ago. The news is slightly negative for PKN and confirms that the refining market is still challenging.

PKN: Lithuanian state railways agreed to rebuild railway link to Orlen Lietuva. According to daily Dziennik, the Lithuanian state railways agreed to rebuild a link from Orlen Lietuva to the border with Latvia. The construction



of the link, which will shorten PKN’s shipping costs to Lietuva, will start in March 2012.This is positive news for Orlen Lietuva, which suffers from expensive shipping costs, after damage to its oil supply pipeline.

PKN in talks with Gaz System concerning purchase of LNG via Swinoujscie gas terminal. According to daily Parkiet, PKN is in talks with Gaz System (the Polish gas network operator) concerning purchases of LNG from the Swinoujscie gas terminal. If this happens within the next 2-3 years, PGNiG may lose part of its supplies to one of its biggest Polish clients, which would be negative for PGNiG. The PKN Orlen group consumes around 1.2bn cm of gas annually (incl. 0.4bn cm at Anwil).

Lotos: Macro environment still not favorable in 3Q11. The CFO of Lotos disclosed that the macro environment has not been favorable in 3Q11. Refining margins in July were low. Despite the margin improvement in August, the environment did not improve, as the BU differential fell. He added that, if the situation does not change, the current softening crude oil price may have a negative effect on the 3Q11 results. On the other hand, the negative effects resulting from the macro side may be offset by increased oil throughput. The CFO added that oil throughput in 2Q11 should be comparable to that seen for 1Q11 (around 2.2m tons). For 3Q11, the company expects a slight improvement. Volume sales in the retail segment are picking up, due to seasonality, but margins are low, due to high product prices. Thus, the result in the retail business should be lower q/q, due to the price barrier.

Lotos reinitiated construction of 250 MW power plant for PLN 2.0bn. After a half-year delay, LTS reinitiated the construction of a 250 MW power plant together with Energa Invest for a total of PLN 2.0bn. Construction should start in 2H12, while finalization is scheduled for 2014. Financing of the project is expected to happen in cooperation with financial investors via a JV vehicle.




Aygaz TRY 1,026.2 13.7% 22.9% 14.1% 13.7% 6.9% 10.4% 7.3% 7.1% -21.2% -24.2% -6.9% -1.7%FX Energy USD 211.6 -5% 13.3% 8.7% 7.1% 28.8% 38.3% 44.3% 47.9% -40.2% -30.9% -49.0% 52.7%INA HRK 5,610.3 3.6% 19.9% 23.9% 22.6% 15% 18.4% 21.3% 22.8% -0.7% -0.7% 13.8% 150.1%Kulczyk Oil Ventures USD 114.2 -17.4% -4.7% -3.2% -3.2% -151% -1.7% 13.1% 14.3% -33.6% -34.6% -37.3% -29.6%Lotos Group PLN 944.0 9.6% 11.2% 12.0% 11.5% 6% 6.1% 7.1% 7.6% -24.3% -38.4% -28.3% -4.8%MOL HUF 6,121.0 7.6% 12.4% 14.8% 12.6% 12% 11.8% 12.6% 12.5% -14.3% -29.7% -27.7% -17.0%OMV EUR 8,897.6 10.7% 11.8% 11.5% 11.6% 17% 13.1% 12.8% 12.9% -0.9% -4.7% -12.5% 5.0%Petrom RON 4,479.7 15.9% 18.2% 15.3% 15.7% 31% 32.8% 31.7% 31.0% -13.0% -19.3% -13.6% 3.6%PKN Orlen PLN 4,045.7 12.6% 21.0% 8.8% 8.3% 7% 6.3% 6.0% 6.2% -18.3% -30.1% -17.4% -6.2%Tupras TRY 3,306.4 20.4% 26.7% 24.5% 23.2% 5% 4.6% 4.8% 4.8% -22.8% -27.5% -25.7% -28.4%Turcas Petrol AS TRY 257.8 11.3% 13.7% 13.1% 15.6% 17% 251.2% 208.2% 186.0% -18.8% -31.2% -26.9% -35.7%Unipetrol CZK 1,364.9 2.5% 4.5% 4.6% 3.8% 6% 5.1% 5.9% 5.4% 5.5% 2.4% 4.8% -17.2%Median - - 11% 14% 13% 13% 12% 12% 13% 13% - - - -Repsol YPF S.A. EUR 26,963 8.4% 9.4% 11.5% 11.0% 14.4% 13.9% 14.9% 15.9% -1.0% -8.4% -4.0% 21.0%Royal Dutch Shell PLC (CL GBP 163,943 12.2% 15.8% 15.6% 15.5% 13.0% 13.4% 14.6% 15.0% 8.4% -0.8% 1.1% 20.7%Total S.A. EUR 90,486 17.0% 18.4% 16.5% 15.6% 17.3% 19.2% 20.3% 20.0% -0.1% -10.8% -9.4% -0.5%Compania Espanola de PetEUR 7,447 8.8% 8.6% 9.3% 6.0% 5.1% 4.9% 3.5% 0.3% -1.2% 29.0% 61.8%Hellenic Petroleum S.A. EUR 1,926 7.4% 7.8% 11.3% 12.3% 5.9% 5.1% 6.4% 6.2% -3.1% -11.8% -9.4% 4.1%Turkiye Petrol Rafinerileri ATRY - 4,337 19.1% 24.1% 23.5% 21.6% 6.0% 4.5% 4.4% 4.2% 6.1% -19.4% -9.8% 1.0%OMV Petrol Ofisi A.S. TRY - 1,324 4.1% 3.8% 3.7% 3.6% -8.1% -24.9% -27.4% -31.6%Lukoil Holdings USD 39,554 15.2% 14.9% 13.1% 12.0% 14.9% 14.3% 14.2% 14.0% 13.2% 2.9% 2.5% 6.0%Median Total - 397,580 12.8% 14.9% 13.9% 14.3% 13.0% 13.4% 14.2% 14.0% - - - -EuroStoxx Oil & Gas 247,678 11.3% 12.3% 13.4% 14.7% 17% 19% 20% 20% -7.9% -9.1% -9.0% 0.4%CEE to Peer, Prem/Disc - -17% -8% -5% -12% -10% -12% -9% -8% - - - -


2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAygaz 10.1 4.7 7.5 7.3 7.5 4.1 6.2 6.1 1.3 1.1 1.0 1.0FX Energy nm 43.9 40.4 41.6 194.3 24.7 16.4 13.2 11.7 3.9 3.2 2.7INA 71.1 15.1 10.8 9.9 13.4 9.0 7.0 6.7 2.5 2.8 2.4 2.1Kulczyk Oil Ventures nm nm nm nm n.m. n.m. n.m. n.m. 1.4 1.0 1.0 1.0Lotos Group 7.0 4.2 3.7 3.5 4.1 2.4 2.5 2.4 0.6 0.5 0.4 0.4MOL 19.2 9.1 7.0 7.8 4.9 3.6 3.2 3.3 1.4 1.1 1.0 1.0OMV 10.1 7.3 6.9 6.4 3.3 2.7 2.7 2.5 1.0 0.8 0.8 0.7Petrom 6.9 5.3 5.7 5.1 3.2 2.7 2.8 2.5 1.0 0.9 0.8 0.8PKN Orlen 7.8 3.3 7.7 8.0 3.9 2.2 3.7 3.8 0.9 0.7 0.7 0.7Tupras 12.7 6.9 7.5 7.3 9.8 5.5 5.8 5.5 2.5 1.9 1.8 1.6Turcas Petrol AS 14.9 7.3 7.4 5.5 14.5 7.2 7.3 5.5 1.6 1.0 0.9 0.8Unipetrol 38.4 18.8 17.2 20.5 7.9 6.4 6.3 6.7 0.9 0.8 0.8 0.8Median CEE 10.1 7.1 7.4 7.3 6.2 3.9 4.7 4.6 1.4 1.0 1.0 1.0Repsol YPF S.A. 13.3 11.4 8.7 8.5 4.6 4.2 3.7 3.4 1.1 1.1 1.0 0.9Royal Dutch Shell PLC (CL A) 11.8 8.7 8.0 7.3 6.9 5.5 5.1 4.8 1.4 1.4 1.2 1.1Total S.A. 8.4 7.0 6.9 6.6 4.6 4.2 3.9 3.7 1.4 1.3 1.1 1.0Compania Espanola de Petrole 14.8 14.4 12.5 15.4 5.5 6.3 5.7 1.3 1.2 1.2Hellenic Petroleum S.A. 10.9 10.0 6.5 5.5 18.0 30.3 5.1 0.8 0.8 0.7 0.7Turkiye Petrol Rafinerileri A.S. 12.1 10.3 10.0 9.6 4.5 7.7 7.7 7.1 2.3 2.5 2.3 2.1OMV Petrol Ofisi A.S. 14.8 15.7 15.7Lukoil Holdings 5.7 5.1 5.2 5.2 3.8 3.5 3.6 3.6 0.9 0.8 0.7 0.6Median Total 11.3 10.0 8.0 7.3 4.6 4.9 4.5 3.7 1.2 1.2 1.1 0.9EuroStoxx Oil & Gas 15.7 13.2 10.5 9.2 6.7 6.4 5.3 4.9 1.4 1.5 1.4 1.3CEE to Peer, Prem/Disc -11% -29% -7% 0% 35% -21% 4% 27% 12% -11% -7% 2%

P/CE P/BVP/E



2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAygaz 0.5 0.3 0.4 0.3 6.9 3.3 5.0 4.7FX Energy 11.7 7.3 6.5 5.9 40.5 18.9 14.8 12.4INA 1.6 1.5 1.4 1.3 10.7 8.0 6.4 5.8Kulczyk Oil Ventures 30.9 10.8 10.3 10.4 -20.5 -619.9 79.0 72.8Lotos Group 0.5 0.3 0.3 0.3 9.4 5.5 4.9 4.3MOL 0.8 0.6 0.5 0.5 6.4 4.7 4.1 4.1OMV 0.8 0.5 0.5 0.4 4.5 3.9 3.8 3.4Petrom 1.2 0.9 0.9 0.9 3.8 2.8 3.0 2.8PKN Orlen 0.4 0.2 0.3 0.3 5.5 3.9 4.7 4.4Tupras 0.3 0.2 0.3 0.3 5.2 4.7 5.3 5.2Turcas Petrol AS 15.2 89.2 78.6 62.3 87.5 35.5 37.7 33.5Unipetrol 0.4 0.3 0.3 0.4 6.5 6.5 6.0 6.7Median CEE 0.8 0.6 0.5 0.5 6.4 4.7 5.0 4.7Repsol YPF S.A. 0.6 0.6 0.5 0.5 4.2 4.2 3.6 3.4Royal Dutch Shell PLC (CL A) 0.7 0.6 0.5 0.5 5.0 4.2 3.7 3.5Total S.A. 0.7 0.6 0.6 0.6 3.9 3.1 2.9 3.0Compania Espanola de Petrole 0.3 0.3 0.3 0.2 4.6 6.1 5.6 6.5Hellenic Petroleum S.A. 0.4 0.4 0.4 0.3 6.9 8.1 5.8 5.5Turkiye Petrol Rafinerileri A.S. 0.3 0.3 0.3 0.3 4.8 5.6 6.1 6.6OMV Petrol Ofisi A.S. 0.1 2.9Lukoil Holdings 0.5 0.5 0.5 0.5 3.6 3.4 3.4 3.2Median Total 0.6 0.5 0.5 0.5 4.4 4.2 3.6 3.4EuroStoxx Oil & Gas 1.3 1.2 1.0 0.9 8.0 6.8 6.8 5.3CEE to Peer, Prem/Disc 33% 5% 5% 5% 46% 12% 38% 37%

EV/Sales EV/EBITDA




Aygaz Accumulate Target price TRY 11.8Price (TRY) 8.4 ROCE 2010 13.0% 10 11e 12e 13eMcap (TRY mn) 2,526 ROE 2010 13.7% Sales (TRY mn) 4,657.7 5,131.6 5,358.2 5,502.6Mcap (EUR mn) 1,026 Net debt (EURmn, 10) -113.6 EBITDA margin 6.87% 10.41% 7.27% 7.12%Free float (%) 24.3% Gearing (2010) -12% EBIT margin 4.96% 9.07% 6.01% 7.46%Free float (EUR mn) 249 Sales CAGR 10-13e 9.8% Net profit margin 5.16% 9.74% 6.35% 6.30%Shares outst. (mn) 300.0 EPS CAGR 10-13e 2.3% EPS (TRY) 0.80 1.66 1.13 1.15


Performance 1M 3M 6M 12MAbsolute (TRY terms) -19.0% -18.6% 2.9% 24.7%Rel. to sector (EUR, ppt) -11.5 -7.8 6.1 -7.3Rel. to universe (EUR, ppt) -11.3 -9.3 4.4 4.5

FX Energy Accumulate Target price USD 9.6Price (USD) 5.8 ROCE 2010 -2.1% 10 11e 12e 13eMcap (USD mn) 302 ROE 2010 -4.5% Sales (USD mn) 25.0 43.5 54.2 61.6Mcap (EUR mn) 212 Net debt (EURmn, 10) 12.4 EBITDA margin 28.82% 38.33% 44.26% 47.92%Free float (%) 83.8% Gearing (2010) 70% EBIT margin 18.32% 26.34% 23.82% 14.37%Free float (EUR mn) 177 Sales CAGR 10-13e 43.2% Net profit margin -3.03% 15.63% 14.01% 12.21%Shares outst. (mn) 52 EPS CAGR 10-13e #ZAHL! EPS (USD) -0.02 0.13 0.14 0.14

Dividend/share (USD) 0.00 0.00 0.00 0.00EV/sales 11.67 7.26 6.53 5.93EV/EBITDA 40.48 18.95 14.77 12.37P/E nm 43.94 40.44 41.62P/CE 194.34 24.66 16.37 13.18P/BV 11.68 3.89 3.19 2.72Dividend yield 0.00% 0.00% 0.00% 0.00%EV/EBITDA rel. 6.3 4.0 3.0 2.6P/E rel. - 6.2 5.4 5.7

Performance 1M 3M 6M 12MAbsolute (USD terms) -40.0% -31.7% -47.4% 69.7%Rel. to sector (EUR, ppt) -30.5 -14.5 -36.0 47.1Rel. to universe (EUR, ppt) -30.3 -16.0 -37.8 58.9

INA Hold Target price HRK 4,500.0Price (HRK) 4,200.0 ROCE 2010 4.0% 10 11e 12e 13eMcap (HRK mn) 42,000 ROE 2010 3.6% Sales (HRK mn) 25,863.0 33,861.0 36,976.0 36,909.1Mcap (EUR mn) 5,610 Net debt (EURmn, 10) 1,366.0 EBITDA margin 14.64% 18.45% 21.29% 22.79%Free float (%) 7.7% Gearing (2010) 78.8% EBIT margin 8.03% 12.89% 15.56% 15.30%Free float (EUR mn) 432 Sales CAGR 10-13e 13.4% Net profit margin 3.59% 7.95% 10.48% 11.34%Shares outst. (mn) 10.0 EPS CAGR 10-13e #ZAHL! EPS (HRK) 44.30 275.27 387.26 422.43


Performance 1M 3M 6M 12MAbsolute (HRK terms) 0.0% 0.0% 14.8% 157.4%Rel. to sector (EUR, ppt) 9.0 15.6 26.7 144.6Rel. to universe (EUR, ppt) 9.2 14.2 25.0 156.4

52 weeks

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

INA CROBEX (Rebased) DJ EURO STOXX Oil & Gas (Rebased)

52 weeks

3456789

101112

FX Energy DJ STOXX Oil & Gas (Rebased)

52 weeks

5

6

7

8

9

10

11

12

Aygaz ISE 100 (Rebased) DJ EURO STOXX Oil & Gas (Rebased)



Kulczyk Oil Ventures Buy Target price USD 2.4Price (USD) 1.2 ROCE 2010 -11.3% 10 11e 12e 13eMcap (USD mn) 163 ROE 2010 -17.4% Sales (USD mn) 7.5 17.9 21.5 23.7Mcap (EUR mn) 114 Net debt (EURmn, 10) -1.5 EBITDA margin -150.99% -1.74% 13.05% 14.32%Free f loat (%) 28.3% Gearing (2010) -1.1% EBIT margin -187.69% -28.34% -7.77% -26.20%Free f loat (EUR mn) 32 Sales CAGR 10-13e #DIV/0! Net profit margin -248.22% -49.47% -30.88% -27.51%Shares outst. (mn) 402.1 EPS CAGR 10-13e -40.5% EPS (USD) -0.06 -0.02 -0.01 -0.01

Dividend/share (USD) 0.00 0.00 0.00 1.00EV/sales 30.91 10.76 10.31 10.43EV/EBITDA nm nm 79.00 72.85P/E nm nm nm nmP/CE nm nm nm nmP/BV 1.36 0.98 1.00 1.02Dividend yield 0.00% 0.00% 0.00% 247.08%EV/EBITDA rel. - - 15.9 15.5P/E rel. - - - -

Performance 1M 3M 6M 12MAbsolute (USD terms) -26.8% -37.5% -41.7% -41.7%Rel. to sector (EUR, ppt) -23.9 -18.3 -24.4 -35.2Rel. to universe (EUR, ppt) -23.7 -19.8 -26.1 -23.4

Lotos Group Accumulate Target price PLN 55Price (PLN) 30.2 ROCE 2010 6.9% 10 11e 12e 13eMcap (PLN mn) 3,922 ROE 2010 9.6% Sales (PLN mn) 19,681 28,233 27,514 27,779Mcap (EUR mn) 944 Net debt (EURmn, 10) 1,513 EBITDA margin 5.86% 6.11% 7.13% 7.60%Free f loat (%) 41.8% Gearing (2010) 80% EBIT margin 3.88% 4.10% 5.00% 4.69%Free f loat (EUR mn) 394 Sales CAGR 10-13e 18.0% Net profit margin 3.45% 3.13% 3.89% 3.97%Shares outst. (mn) 129.9 EPS CAGR 10-13e 2.3% EPS (PLN) 5.24 6.81 8.25 8.51


Performance 1M 3M 6M 12MAbsolute (PLN terms) -21.3% -35.4% -25.0% -0.3%Rel. to sector (EUR, ppt) -14.6 -22.1 -15.3 -10.4Rel. to universe (EUR, ppt) -14.4 -23.6 -17.0 1.4

MOL Accumulate Target price HUF 27,500.0Price (HUF) 17,265.00 ROCE 2010 5.0% 10 11e 12e 13eMcap (HUF mn) 1,676,160 ROE 2010 7.6% Sales (HUF mn) 4,298,709 5,505,097 5,899,795 5,707,525Mcap (EUR mn) 6,121 Net debt (EURmn, 10) 2,858 EBITDA margin 11.79% 11.77% 12.55% 12.46%Free f loat (%) 26.5% Gearing (2010) 40% EBIT margin 5.44% 6.60% 7.69% 6.19%Free f loat (EUR mn) 1,622 Sales CAGR 10-13e 15% Net profit margin 2.47% 4.31% 4.96% 4.66%Shares outst. (mn) 97.1 EPS CAGR 10-13e 23.8% EPS (HUF) 1,070.80 1,875.06 2,464.63 2,210.89



52 weeks

15.00016.00017.00018.00019.00020.00021.00022.00023.00024.00025.00026.000

MOL BUX (Rebased) DJ EURO STOXX Oil & Gas (Rebased)

52 weeks

25

30

35

40

45

50

Lotos GroupWIG 20 (Rebased)DJ EURO STOXX Oil & Gas (Rebased)

52 weeks

1,0

1,2

1,4

1,6

1,8

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2,2

2,4

Kulczyk Oil VenturesW IG (Rebased)DJ EURO STO XX Oil & Gas (Rebased)



OMV Buy Target price EUR 34.000Price (EUR) 27.3 ROCE 2010 7.7% 10 11e 12e 13e

ROE 2010 10.7% Sales (EUR mn) 23,323.4 34,202.1 36,641.1 40,779.9Mcap (EUR mn) 8,898 Net debt (EURmn, 10) 6,263 EBITDA margin 16.77% 13.10% 12.82% 12.88%Free float (%) 48.5% Gearing (2010) 55% EBIT margin 10.01% 7.39% 7.38% 7.44%Free float (EUR mn) 4,315 Sales CAGR 10-13e 22.8% Net profit margin 5.21% 4.63% 4.75% 4.76%Shares outst. (mn) 326.1 EPS CAGR 10-13e 22.4% EPS (EUR) 3.08 3.73 3.93 4.30


Performance 1M 3M 6M 12MAbsolute (EUR terms) -0.9% -4.7% -12.5% 5.0%Rel. to sector (EUR, ppt) 8.8 11.7 0.5 -0.6Rel. to universe (EUR, ppt) 9.0 10.2 -1.2 11.2

Petrom Buy Target price RON 0.5Price (RON) 0.3 ROCE 2010 10.1% 10 11e 12e 13eMcap (RON mn) 18,976 ROE 2010 15.9% Sales (RON mn) 18,615.7 24,208.1 24,583.8 27,436.1Mcap (EUR mn) 4,480 Net debt (EURmn, 10) 718 EBITDA margin 31.14% 32.84% 31.68% 0.00%Free float (%) 6.2% Gearing (2010) 16% EBIT margin 16.04% 19.96% 18.12% 16.36%Free float (EUR mn) 278 Sales CAGR 10-13e 14.3% Net profit margin 14.65% 14.89% 13.72% 13.66%Shares outst. (mn) 56,644.1 EPS CAGR 10-13e 44.1% EPS (RON) 0.05 0.06 0.06 0.07

Dividend/share (RON) 0.02 0.03 0.03 0.03EV/sales 1.17 0.93 0.95 0.86EV/EBITDA 3.77 2.82 2.99 2.76P/E 6.88 5.27 5.68 5.11P/CE 3.16 2.74 2.77 2.54P/BV 1.03 0.90 0.84 0.77Dividend yield 5.32% 9.49% 8.80% 9.78%EV/EBITDA rel. 0.6 0.6 0.6 0.6P/E rel. 0.7 0.7 0.8 0.7

Performance 1M 3M 6M 12MAbsolute (RON terms) -13.0% -17.3% -13.0% 3.1%Rel. to sector (EUR, ppt) -3.3 -2.9 -0.6 -2.0Rel. to universe (EUR, ppt) -3.1 -4.4 -2.4 9.8

PKN Orlen Hold Target price PLN 54.0Price (PLN) 39.3 ROCE 2010 8.1% 10 11e 12e 13eMcap (PLN mn) 16,809 ROE 2010 12.6% Sales (PLN mn) 83,547.4 89,803.3 84,999.8 83,094.1Mcap (EUR mn) 4,046 Net debt (EURmn, 10) 2,007 EBITDA margin 6.64% 6.32% 5.99% 0.00%Free float (%) 62.2% Gearing (2010) 33% EBIT margin 3.74% 3.54% 3.11% 2.96%Free float (EUR mn) 2,518 Sales CAGR 10-13e 5.2% Net profit margin 2.94% 5.24% 2.45% 2.39%Shares outst. (mn) 427.7 EPS CAGR 10-13e 12.8% EPS (PLN) 5.94 11.25 5.12 4.89


Performance 1M 3M 6M 12MAbsolute (PLN terms) -15.1% -26.7% -13.6% -1.8%Rel. to sector (EUR, ppt) -8.6 -13.8 -4.5 -11.8Rel. to universe (EUR, ppt) 326.3 289.0 288.3 260.0

52 weeks

20

22

24

26

28

30

32

34

36

OMV ATX (Rebased) DJ EURO STOXX Oil & Gas (Rebased)

52 weeks

0,260,280,300,320,340,360,380,400,420,440,46

Petrom BET (Rebased) DJ EURO STOXX Oil & Gas (Rebased)

52 weeks

30

35

40

45

50

55

60

PKN OrlenWIG 20 (Rebased)DJ EURO STOXX Oil & Gas (Rebased)



Tupras Hold Target price TRY 43.5Price (TRY) 32.500 ROCE 2010 28.8% 10 11e 12e 13eMcap (TRY mn) 8,138.6 ROE 2010 20.4% Sales (TRY mn) 26,218.7 35,254.3 35,276.7 36,704.3Mcap (EUR mn) 3,306.4 Net debt (EURmn, 10) -1,414 EBITDA margin 4.79% 4.58% 4.76% 0.00%Free float (%) 49.0% Gearing (2010) -75% EBIT margin 3.94% 3.84% 3.88% 3.69%Free float (EUR mn) 1,620 Sales CAGR 10-13e 15.8% Net profit margin 2.83% 3.12% 3.10% 3.05%Shares outst. (mn) 250.4 EPS CAGR 10-13e 8.2% EPS (TRY) 2.94 4.36 4.34 4.43

Dividend/share (TRY) 2.80 2.90 3.00 3.00EV/sales 0.25 0.22 0.25 0.25EV/EBITDA 5.23 4.74 5.35 5.25P/E 12.68 6.87 7.49 7.33P/CE 9.76 5.51 5.79 5.54P/BV 2.50 1.91 1.76 1.64Dividend yield 7.50% 9.68% 9.23% 9.23%EV/EBITDA rel. 0.8 1.0 1.1 1.1P/E rel. - 1.0 1.0 1.0

Performance 1M 3M 6M 12MAbsolute ( terms) -20.7% -22.2% -17.9% -9.1%Rel. to sector (EUR, ppt) -13.1 -11.2 -12.8 -33.9Rel. to universe (EUR, ppt) -10.8 -7.4 -6.7 -2.9

Turcas Petrol AS Buy Target price TRY 4.9Price (TRY) 2.8 ROCE 2010 11.5% 10 11e 12e 13eMcap (TRY mn) 634.5 ROE 2010 11.3% Sales (TRY mn) 52.3 5.6 6.2 6.8Mcap (EUR mn) 257.8 Net debt (EURmn, 10) -22 EBITDA margin 17.40% 251.19% 208.20% 0.00%Free float (%) 28.7% Gearing (2010) -8% EBIT margin 14.53% 232.16% 193.22% 1870.99%Free float (EUR mn) 74 Sales CAGR 10-13e -37.7% Net profit margin 107.73% 1423.74% 1382.16% 1683.89%Shares outst. (mn) 225.0 EPS CAGR 10-13e 43% EPS (TRY) 0.25 0.36 0.38 0.51

Dividend/share (TRY) 0.05 0.07 0.08 0.10EV/sales 15.23 89.24 78.57 62.28EV/EBITDA 87.50 35.53 37.74 33.49P/E 14.90 7.31 7.42 5.54P/CE 14.45 7.21 7.34 5.50P/BV 1.59 1.03 0.93 0.81Dividend yield 1.34% 2.74% 2.69% 3.61%EV/EBITDA rel. 13.7 7.6 7.6 7.1P/E rel. - 1.0 1.0 0.8


Unipetrol Reduce Target price CZK 170.0Price (CZK) 182.0 ROCE 2010 3.4% 10 11e 12e 13eMcap (CZK mn) 33,002.9 ROE 2010 2.5% Sales (CZK mn) 85,966.5 107,062.9 97,713.4 95,792.8Mcap (EUR mn) 1,364.9 Net debt (EURmn, 10) -99 EBITDA margin 6.02% 5.15% 5.87% 0.00%Free float (%) 37.0% Gearing (2010) -6% EBIT margin 1.95% 2.02% 2.47% 2.08%Free float (EUR mn) 505 Sales CAGR 10-13e 9.2% Net profit margin 1.09% 1.65% 1.96% 1.68%Shares outst. (mn) 181.3 EPS CAGR 10-13e EPS (CZK) 5.17 9.76 10.58 8.90

Dividend/share (CZK) 0.00 2.93 3.90 5.29EV/sales 0.39 0.34 0.35 0.36EV/EBITDA 6.47 6.53 5.96 6.71P/E 38.43 18.76 17.21 20.45P/CE 7.89 6.39 6.29 6.72P/BV 0.92 0.81 0.79 0.77Dividend yield 0.00% 1.60% 2.15% 2.91%EV/EBITDA rel. 1.0 1.4 1.2 1.4P/E rel. - 2.6 2.3 2.8

Performance 1M 3M 6M 12MAbsolute (CZK terms) 5.6% 0.9% 4.1% -19.0%Rel. to sector (EUR, ppt) 15.3 17.2 17.0 -24.5Rel. to universe (EUR, ppt) 15.5 15.8 15.3 -12.7

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Turcas Petrol ASISE 100 (Rebased)DJ EURO STOXX Oil & Gas (Rebased)

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Tupras ISE 100 (Rebased) DJ EURO STOXX Oil & Gas (Rebased)

Sector Insight Personal & Household Goods


– Vestel WG 2Q11 net profit lower than expected – �� – Gorenje: 1H11 performance in line with expectations – PM CR 1H11 net profit up 1% y/y, in line with expectations

Turkish white goods: New record set in domestic white good sales in July. According to the White Goods Industrialists' Association (TURKBESD), total domestic white goods sales in July 2011 surged 20.5% y/y (up 3.1% m/m) and came in at 635k units, marking a historically high monthly figure. Total domestic sales increased 21.2% y/y to 3.7mn units in 7M11. Exports, on the other hand, declined 0.5% y/y (down 3.2% m/m) to 1,203k units in July 2011. YTD export sales increased 5.0% to 7.7mn in 7M11. Domestic demand was strong in the first seven months of the year. We observed pull-forward domestic demand in June and July. We expect this growth in domestic demand to decline and turn to contraction in the remainder of the year, on the back of the expected slowdown of the economy and declining consumer credits. We also expect to see a moderate increase in exports in the remainder of the year. Thus, we maintain our growth expectations for the full year; we expect domestic demand for white goods to increase 8.0% and export sales to increase 5.5% in 2011.

Vestel WG reported TRY 9.3mn net profit in 2Q11 (2Q10: TRY 10.7mn, 1Q11: TRY 8.6mn), thus below our expectation of TRY 13.9mn and the consensus estimate of TRY 12.7mn. The deviation between our estimate and the announced net profit mainly stemmed from the higher than expected OPEX and losses from FX forward contracts (net FX loss of TRY 5.2mn in 2Q11). Vestel WG's unit sales rose 16% y/y in Turkey and 11% y/y in Europe in the first half of this year. The company increased revenues 49% y/y to TRY 532mn (our expectation: TRY 451mn, consensus: TRY 465mn) in 2Q11, thanks to higher than expected unit sales (strong domestic market and Eastern European sales) and appreciation of the EUR against the TRY this quarter. EBITDA rose 83% y/y to TRY 36.6mn (our expectation: TRY 30.6mn, consensus: TRY 31.4mn), while the EBITDA margin improved 1.3pp y/y to 6.9% in 2Q11 (our expectation and consensus: 6.8%), mainly due to strong revenues, and despite rising raw material prices. The company financed its working capital requirement through short-term financial loans, all denominated in USD and EUR. Consequently, net debt jumped TRY 160mn to TRY 244mn in 2Q11, the highest figure since 2007; the net debt to EBITDA ratio increased to 2.7 in 2Q11, from 1.2 in 1Q11. Note that the company distributed a TRY 22.4mn cash dividend in May. The company revised down its export volume growth guidance to 8-10% (from 10%), while maintaining its total unit growth guidance of 10%. On the profitability front, it expects the recent easing in commodity prices and significant depreciation of the TRY to compensate for the negative impact of the pricing pressure.

Arcelik reported TRY 137.2mn net profit for 2Q11 (up 9% q/q, up 12% y/y), in line with our expectation of TRY 138mn and the consensus estimate of TRY 142mn. Although the EBITDA margin is lower than expected, the announced top line and net profit figures are very much in line with our estimates and the market consensus. The deviation between our estimate and the announced EBITDA stemmed from slightly lower than expected gross profit. However, the higher than expected profit from subsidiaries and lower than expected tax expenses resulted in the same net profit figure as our expectation. The company increased its consolidated revenues 15% y/y to TRY 2,029mn (our expectation: TRY 2,075mn, consensus: TRY 2,063mn) in 2Q11. EBITDA increased 14% y/y and 10% q/q to TRY 222mn (our expectation: TRY 235mn, consensus: TRY 236mn) and the EBITDA margin declined 0.1pp y/y (1.0pp q/q deterioration) to 10.9% in 2Q11 (our expectation: 11.3%, consensus: 11.4%). On a product basis, white goods revenues increased 23% y/y, electronics revenues declined 14% y/y and other business revenues (including air conditioner sales) jumped 20% y/y in 2Q11. The gross margin in the white goods segment contracted, while the gross margin improved in electronics and other segments. Domestic revenues increased 18% y/y in TRY terms and international revenues declined 3% y/y in EUR terms in 2Q11. The company’s export revenues from the Middle East & Africa decreased 9% in this period in TRY terms, due to recent unrest in that region.

Gorenje published its unaudited 1H11 report last month. Sales advanced 22.1% y/y to EUR 744.6mn, operating profit slipped 9.1% y/y to EUR 17.9mn and net profit after minorities jumped 46.4% y/y to EUR 6.4mn (all figures consolidated and according to IFRS standards). On a comparable basis, i.e. excluding the effect of the Asko acquisition, 1H11 net sales amounted to EUR 669.5mn (up 9.7% y/y), EBIT totaled EUR 22.5mn (up 14.2% y/y) and net profit before minorities climbed 153.1% y/y to EUR 12.4mn. In 2Q11 alone, sales soared 17.3% y/y to EUR 374.4mn, EBIT decreased 24.3% y/y to EUR 9.0mn and net profit rose 15.2% y/y to EUR 4.5mn. Although the operating profitability performance excluding Asko was once again very solid, the progress of



the restructuring of the Asko operations will undoubtedly be watched by investors in the coming periods. The company stated that the negative effect of Asko on the group operating result should be fully neutralized next year, by when Asko is envisaged to rebound to positive figures. Currently, the company is preparing a new strategic plan for the period until 2015, scheduled for completion in September. With 1H11 results fully in line with our forecasts, we see no reason to change our projections at the moment. We continue to think that, after the recent sell-off, Gorenje’s share price levels (translating into P/BV 11e of a mere 0.3) are very attractive and we stick to Buy.

Philip Morris CR reported 1H11 net profit up 1% y/y to CZK 1.13bn, in line with the CZK 1.14bn consensus, but below our estimate. EBIT was also up 1%. Revenue increased 1.5% y/y to CZK 5.62bn (1% below the consensus). The Czech market share of PM CR declined 2.4 percentage points to 52.3%, according to ACNielsen data. PM CR’s shipments in the Czech market declined 5.8% y/y and in Slovakia 3.8% y/y. Total shipments increased 1.7%, thanks to exports, which typically bring lower margins. PM CR warned that its shipment volume remains under pressure in both the Czech Republic and Slovakia, due primarily to continued consumer down-trading to cheaper tobacco products. PM CR sees the rest of 2011 as uncertain.

The results were worse than we expected, due to the continued decline in market share in the Czech Republic, which resulted in lower average selling prices and margins. Exports were stronger than expected, but this could not compensate for the decline in the Czech Republic. We maintain our cautious stance on the stock.




Arcelik TRY 370.0 19.5% 15.7% 15.8% 16.1% 11.8% 11.4% 11.4% 11.4% -23.7% -32.9% -22.4% -34.8%BWT EUR 252.4 14.4% 10.6% 10.4% 11.4% 10.2% 9.2% 9.3% 9.7% -7.7% -24.3% -26.7% -16.7%Gorenje EUR 112.9 5.3% 3.6% 4.9% 5.9% 7.9% 6.1% 6.5% 6.7% -16.4% -30.0% -41.9% -43.6%Philip Morris CR CZK 1,214.2 29.9% 29.8% 25.0% 24.9% 33.1% 32.5% 28.9% 29.0% 5.8% 16.5% 16.5% 22.8%Vestel TRY 159.0 4.8% 9.1% 11.4% 11.7% 5.6% 7.0% 7.5% 7.5% -24.0% -34.7% -37.2% -55.7%Wolford EUR 120.4 6.2% 12.6% 12.5% 12.2% 10.1% 13.9% 14.2% 14.3% -2.8% -6.9% 1.6% 31.9%Median - - 10% 12% 12% 12% 10% 10% 10% 11% - - - -EuroStoxx Personal & Household Goods

237,186 14.6% 15.2% 15.5% 14.8% 17.8% 18.8% 19.4% 20.1% -7.3% -17.4% -17.7% -16.8%

CEE to Peer, Prem/Disc - -29% -24% -23% -19% -43% -45% -47% -48% - - - -


2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eArcelik 1.3 6.9 6.8 6.0 1.0 5.0 5.0 4.4 1.1 1.1 1.0 0.9BWT 16.6 14.1 13.4 11.4 9.1 7.2 6.7 6.1 2.3 1.4 1.4 1.2Gorenje 10.8 7.8 5.6 4.4 2.2 1.2 1.2 1.2 0.5 0.3 0.3 0.3Philip Morris CR 11.3 10.3 11.9 11.8 9.6 8.9 10.0 10.0 3.2 3.0 3.0 2.9Vestel 12.4 7.0 5.5 4.9 4.0 3.8 3.5 3.3 0.6 0.7 0.6 0.6Wolford 26.2 10.7 9.7 9.1 9.3 6.2 5.8 5.7 1.6 1.3 1.2 1.1Median CEE 11.9 9.1 8.3 7.5 6.5 5.6 5.4 5.0 1.3 1.2 1.1 1.0EuroStoxx Personal & Household Goods

19.7 16.8 14.3 12.3 12.7 11.9 10.5 9.5 2.7 2.5 2.3 1.9

CEE to Peer, Prem/Disc -40% -46% -42% -39% -49% -53% -49% -47% -51% -52% -53% -48%

2010 2011e 2012e 2013e 2010 2011e 2012e 2013eArcelik 0.6 0.6 0.6 0.5 5.3 5.3 5.2 4.6BWT 0.9 0.7 0.6 0.6 8.9 7.2 6.9 6.1Gorenje 0.5 0.3 0.3 0.3 5.7 5.5 4.9 4.5Philip Morris CR 2.3 2.1 2.1 2.0 6.8 6.3 7.2 7.0Vestel 0.2 0.2 0.2 0.2 3.9 2.8 2.3 2.0Wolford 1.0 0.9 0.8 0.7 10.1 6.3 5.7 5.2Median CEE 0.8 0.6 0.6 0.6 6.2 5.9 5.4 4.9EuroStoxx Personal & Household Goods

1.4 1.4 1.3 1.2 9.2 8.6 7.2 6.2


P/CE P/BV

EV/Sales EV/EBITDA

P/E




Arcelik Buy Target price TRY 9.9Price (TRY) 6 ROCE 2010 13.0% 10e 11e 12e 13eMcap (TRY mn) 911 ROE 2010 19.5% Sales (TRY mn) 7,004.8 7,828.5 8,667.7 9,515.4Mcap (EUR mn) 370 Net debt (EURmn, 10) 500.1 EBITDA margin 11.80% 11.40% 11.40% 11.40%Free float (%) 25.0% Gearing (2010) 51% EBIT margin 9.11% 8.89% 8.99% 9.02%Free float (EUR mn) 93 Sales CAGR 10-13e 9.6% Net profit margin 8.26% 7.26% 7.28% 7.51%Shares outst. (mn) 151.8 EPS CAGR 10-13e 8.7% EPS (TRY) 3.61 0.80 0.89 1.00



BWT Buy Target price EUR 28.2Price (EUR) 15.0 ROCE 2010 11.2% 10 11e 12e 13e

ROE 2010 14.4% Sales (EUR mn) 460.7 468.8 501.9 539.2Mcap (EUR mn) 252 Net debt (EURmn, 10) 39.3 EBITDA margin 10.17% 9.20% 9.30% 9.65%Free float (%) 54.0% Gearing (2010) 28% EBIT margin 6.78% 5.63% 5.64% 6.13%Free float (EUR mn) 136.3 Sales CAGR 10-13e 7.7% Net profit margin 4.92% 3.83% 3.75% 4.11%Shares outst. (mn) 17 EPS CAGR 10-13e 0.0% EPS (EUR) 1.32 1.07 1.12 1.32


Performance 1M 3M 6M 12MAbsolute (EUR terms) -7.7% -24.3% -26.7% -16.7%Rel. to sector (EUR, ppt) -2.3 -16.3 -20.8 -12.1Rel. to universe (EUR, ppt) 2.2 -9.4 -15.5 -10.4

Gorenje Buy Target price EUR 12.0Price (EUR) 7.1 ROCE 2010 3.9% 10 11e 12e 13e

ROE 2010 5.3% Sales (EUR mn) 1,382 1,548 1,592 1,666Mcap (EUR mn) 113 Gearing (2010) 401 EBITDA margin 7.94% 6.11% 6.47% 6.69%Free float (%) 53.4% Gearing (2010) 115% EBIT margin 4.12% 2.77% 3.14% 3.42%Free float (EUR mn) 60 Sales CAGR 10-13e 8.9% Net profit margin 1.46% 0.95% 1.28% 1.54%Shares outst. (mn) 15.9 EPS CAGR 10-13e #ZAHL! EPS (EUR) 1.25 0.91 1.27 1.60



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Philip Morris CR Reduce Target price CZK 9600.0Price (CZK) 10,694.0 ROCE 2010 66.7% 10e 11e 12e 13eMcap (CZK mn) 29,359 ROE 2010 29.9% Sales (CZK mn) 11,699.6 12,460.5 12,304.4 12,301.1Mcap (EUR mn) 1,214 Gearing (2010) -172 EBITDA margin 33.09% 32.53% 28.89% 29.00%Free f loat (%) 22.4% Gearing (2010) -67% EBIT margin 28.98% 28.70% 25.08% 25.30%Free f loat (EUR mn) 272 Sales CAGR 10-13e 1.3% Net profit margin 23.13% 22.92% 20.03% 20.21%Shares outst. (mn) 2.7 EPS CAGR 10-13e -0.2% EPS (CZK) 985.42 1,039.84 897.19 905.31

Dividend/share (CZK) 890.04 929.96 794.97 808.01EV/sales 2.25 2.06 2.07 2.04EV/EBITDA 6.80 6.34 7.17 7.04P/E 11.35 10.35 11.92 11.81P/CE 9.63 8.86 10.01 9.98P/BV 3.21 2.96 2.99 2.90Dividend yield 7.96% 8.64% 7.43% 7.56%EV/EBITDA rel. 1.1 1.1 1.3 1.4P/E rel. 1.0 1.1 1.4 1.6

Performance 1M 3M 6M 12MAbsolute (CZK terms) -26.8% -37.5% -41.7% -41.7%Rel. to sector (EUR, ppt) 11.2 24.5 22.4 27.3Rel. to universe (EUR, ppt) 15.7 31.4 27.7 29.0

Vestel Hold Target price TRY 3.5Price (TRY) 2.1 ROCE 2010 4.1% 10e 11e 12e 13eMcap (TRY mn) 391 ROE 2010 4.8% Sales (TRY mn) 1,415.6 1,565.6 1,708.0 1,836.9Mcap (EUR mn) 159 Gearing (2010) -4 EBITDA margin 5.60% 7.00% 7.50% 7.50%Free f loat (%) 19.2% Gearing (2010) -2% EBIT margin 1.96% 4.17% 5.14% 5.42%Free f loat (EUR mn) 30 Sales CAGR 10-13e 9.1% Net profit margin 1.81% 3.28% 4.19% 4.32%Shares outst. (mn) 190.0 EPS CAGR 10-13e -9.4% EPS (TRY) 0.13 0.27 0.38 0.42



Wolford Buy Target price EUR 30.0Price (EUR) 24.6 ROCE 2010 5.0% 10 11e 12e 13e

ROE 2010 6.2% Sales (EUR mn) 152 164 170 176Mcap (EUR mn) 120 Gearing (2010) 26 EBITDA margin 10.09% 13.94% 14.25% 14.27%Free f loat (%) 52.0% Gearing (2010) 41% EBIT margin 4.70% 9.26% 9.70% 9.86%Free f loat (EUR mn) 63 Sales CAGR 10-13e 5% Net profit margin 3.24% 6.75% 7.18% 7.42%Shares outst. (mn) 4.9 EPS CAGR 10-13e 50.8% EPS (EUR) 1.03 2.29 2.52 2.70


Performance 1M 3M 6M 12MAbsolute (EUR terms) -2.8% -6.9% 1.6% 31.9%Rel. to sector (EUR, ppt) 2.5 1.1 7.5 36.4Rel. to universe (EUR, ppt) 7.0 7.9 12.8 38.1

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Sector Insight Real Estate


– Immofinanz: Full-year figures in line – CA Immo: Net income below expectations, on higher taxes – S Immo: 1H results pretty much in line with our estimates – conwert: 1H results in line with expectations, share buyback resumed at lower speed – Emlak Konut REIT: TRY 29mn net profit in 2Q11 significantly lower than expected – Sinpas REIT: Strong financial results on back of robust delivery – Is REIT: TRY 9.6mn net profit for 2Q11 lower than expected

Immofinanz 2010/11 figures in line, but share suffers from CB conversions. The Immofinanz full-year figures (fiscal year-end April) were in line with our estimates and, as expected, a EUR 0.10 share dividend will be proposed to the AGM on September 28. As an extra bonus for Austrian retail shareholders, this dividend will be tax-free. Full-year rents were up 6.9% y/y, at EUR 579mn, driven by the strong performance of the retail segment. Income from asset management was flat at EUR 440mn, on higher maintenance and refurbishment expenses needed to work off the investment backlog. Property sales from the investment portfolio, as well as development, were up strongly compared to last year. Net profit shot up from EUR 81mn to EUR 316mn, as minorities from Immoeast were still included last year. The NAV gained 13.3% to EUR 5.71. In terms of outlook, no concrete guidance was given, but CEO Zehetner said in the conference call that the goal is for an increase compared to 2010/11. Likewise, the EBITDA target of EUR 600mn was reconfirmed, as well as the goal to step up the dividend from EUR 0.10 this year to EUR 0.15 in 2011/12 and to EUR 0.20 in 2012/13. We will update our estimates in the upcoming sector report, but Immofinanz will remain our top pick in the sector. The share additionally suffered from convertible bond holders from the CB 2011 switching into shares (conversion price: EUR 2.00), which they can still do until October.

The 2Q results were basically in line with our expectations, falling short only on the bottom line, on higher than expected taxes. 2Q rental revenues were up more than 50% to EUR 64mn, on the inclusion of the Europolis portfolio. Due to lower sales from the trading portfolio and higher operating expenses (Europolis, refurbishment program of vacant properties), NOI was only up 8% to EUR 53.3mn. The revaluation result was positively influenced by the upward revaluation of the largest development project - Tower 185 in Frankfurt. Net income fell 60% to EUR 4.3mn, on higher taxes on upward revaluations in Germany. The full-year targets (5% ROE, dividend payment of 2% of NAV, continued improvement in operating results in the coming quarters) were confirmed. The focus in 2H will be on real estate sales in Germany (especially from the land bank). The company is confident that it will reach its full-year sales program of EUR 300-350mn. UniCredit again started to buy back shares from mid- to end-July (start of black-out before 2Q numbers) to a limited extent (roughly 580tsd) at a maximum price of EUR 12.35. The future strategy is unclear, but the low share price levels would speak in favor of further buybacks. However, we would doubt a fresh takeover offer in the current market phase. We will cut our estimates and recommendation in our next sector report.

S Immo was slightly better on the EBITDA level, but a slightly worse than expected financial result(probably due to exchange rate effects) and a higher tax expense led to a net result that was perfectly in line with expectations. The positive deviation was due to a good selling result (EUR +3.9mn in 1H). Both rental income and direct property expenses were a notch above our estimate.

The EPRA NAV as reported by the company amounts to EUR 8.54 (after EUR 8.45 as of March 31, 2011). The BVPS amounts to EUR 7.31 as of June 30, 2011 (after EUR 7.32 as of March 31, 2011) – slightly negatively impacted by exchange rate effects and a minor loss in the fair value of hedging instruments. The NAV of the certificate amounts to EUR 77.72 as of June 30, 2011 (after EUR 76.67 as of March 31, 2011). The company already bought back a total of 8.5% of the certificates, which is a positive surprise and shows strong progress. The company expects an ‘equally successful’ second half of 2011.

In light of the minor deviations from our 1H estimates and the given positive outlook, we currently do not see much need to change our 2011 projections. For 2012/13, we will probably lower our estimates, due to the recent deterioration of the economic outlook, which will also result in a moderately lower target price. At current levels, the stock definitely remains a Buy.

conwert had a rough month. Following the steep share price decline, conwert moved the publication of its 1H11 results a bit forward, enabling the company to restart the share buyback program a couple of days earlier than originally planned. This buyback program seems to have held the share price pretty stable until July 27 – the last



buyback day before the pre-results ‘quiet period’. The share price dropped more than 25% in the following couple of days. The company resumed the program on August 18, albeit at a much lower intensity.

In addition, Petrus Advisers seems willing to increase its stake in conwert to close to 30% (from currently around 22%). Above that level, Petrus would have to make a public takeover bid, which it probably wants to avoid.

Concerning the 1H results, the FFO was clearly better than expected (due to the selling result compared to historical book values). The EPS and BVPS development was slightly below our estimates. The full-year earnings guidance was confirmed, nevertheless. Total property sales should reach EUR 600mn in the full-year and the dividend was basically confirmed at last year’s level. Following these results, we may have to moderately reduce our estimates and target price. Nevertheless, at a level below EUR 10, the stock is clearly an interesting opportunity.

We initiated our coverage of Emlak Konut REIT with a Buy recommendation and a 12-month target price of TRY 3.20. Emlak Konut REIT trades at a slight discount to current NAV, mainly due to its promising land bank and ongoing projects. Emlak Konut REIT, the largest REIT on the ISE, focuses on residential development for the upper-middle and middle income segments, and its sales revenues depend on residential unit sales. The company is projected to generate a total of TRY 5bn in revenue in 2011-13. Most ongoing projects are projected to be completed in 2012-13, so we expect a dramatic increase in revenues in those years. Upside includes (i) the acquisition of new parcels of land from TOKI; (ii) launching new projects; (iii) a decrease in interest rates and improvement in consumer confidence. Downside includes (i) a potential SPO (not expected in 2011); (ii) increasing construction costs; (iii) permit problems for land and delays in projects; and (iv) lower than expected revenues from revenue sharing projects.

Emlak Konut REIT reported TRY 29.3mn net profit in 2Q11 (2Q10: TRY 53.4mn, 1Q11: TRY 73.2mn), thus significantly below our expectation of TRY 71mn and the consensus estimate of TRY 69mn. The deviation between our estimate and the announced net profit mainly stemmed from the lower than expected revenues and drop in the gross margin of revenue sharing model (RSM) projects (from 76% to 22% in 2Q11). The decline in the gross margin mainly stemmed from the delivery of units from lower-margin RSM projects, which are not dominant in the company's portfolio. We believe that margins in RSM projects will increase again to high levels in the coming period. The company sold a total of 2.1k units (worth TRY 583mn) in 2Q11, lower than the 3.9k units sold (worth TRY 752mn) in 1Q11. Emlak will be able to record sales revenues in its P&L following the delivery of these units. Revenues fell 15% y/y to TRY 191mn (our expectation: TRY 221mn, consensus: TRY 204mn) in 2Q11, due to lower than expected revenue generation from RSM projects. Emlak generated TRY 92.7mn in revenue (2Q10: TRY 182mn) from RSM projects and TRY 98.4mn in revenue (2Q10: TRY 46mn) from the delivery of residential and commercial units in 2Q11. EBITDA dropped 83% y/y to TRY 21mn (our expectation: TRY 78mn, consensus: TRY 74mn); thus, the EBITDA margin contracted 44pp y/y to 11% (our expectation: 35%, consensus: 37%), mainly due to the significant drop in margins of RSM projects. The gross margin for RSM projects declined in 2Q11, while the gross margin in residential and commercial unit sales increased. The company did not hold any tenders in 2009, so we do not expect any major delivery this year. We expect a dramatic increase in revenues in 2012-13, following a weak 2011.

Emlak Konut REIT has received a construction permit for an additional 903 residential units and nine commercial units in a revenue sharing project planned to be developed on the Sultangazi Habipler land in Istanbul. The company was previously awarded construction permits for 1,020 residential units and a commercial unit in the same project. The tendered plot of land constituted 5.4% of the company's total portfolio (TRY 6.8bn) as of June 2011. Following the full construction permit, the portfolio value of this property is expected to increase by TRY 52mn, which would increase the company's existing NAV by 1%.

We initiated our coverage of Sinpas REIT with a Buy recommendation and a 12-month target price of TRY 2.60. Currently, the REIT trades at a deep discount to current NAV. Sinpas REIT is a pure residential project developer, focusing on upper and upper-middle customer segments. The REIT derives its revenues from the sale of these residential units. The company has five ongoing residential projects and a total land bank of 955k sqm to be developed. 1,775 units are expected to be delivered in 2011, the proceeds from which will be reflected in the P&L this year. Sinpas REIT aims to launch three new residential projects with 1,685 residential units in 2H11, expecting to generate a total of TRY 1.1bn in revenue from these projects by 2013. Upsides include (i) new sales campaigns to boost sales; (ii) launch of new projects; and (iii) improvement in consumer confidence. Downsides include (i) increasing construction costs and interest rates; (ii) permit problems for land and delays in projects; and (iii) lower than expected pre-sales.



Sinpas REIT reported TRY 107.4mn net profit for 2Q10, significantly higher than our expectation of TRY 78mn. The deviation between our estimate and the announced net profit mainly stemmed from the lower than expected marketing expenses and higher than expected financial income. The company sold 590 residential units (net of 178 cancellations) in 1H11, marking a solid sales performance compared to the total of 767 units sold in 2010. However, Sinpas REIT will only be able to record sales revenues in its P&L following the delivery of these units. Meanwhile, the company delivered 1,070 residential units in 1H11, thus exceeding the 1,000 units delivered in the whole of 2010. Sinpas REIT delivered a robust 886 units in 2Q11, and thus reported revenue of TRY 322mn (our expectation: TRY 350mn), the highest quarterly figure. The main delivery was from the Bosphorus City project (840 units), one of the most expensive projects in the company's portfolio. The gross margin improved 5pp q/q to 35% in 2Q11. EBITDA increased to TRY 94mn (our expectation: TRY 78mn) and the EBITDA margin improved 14pp q/q to 29% (our expectation: 22%), mainly due to the delivery of units from profitable projects and lower operating expense (thanks to fixed costs). Net debt increased to TRY 129mn as of June 2011, from TRY 28mn as of March 2011, mainly due to the distribution of a cash dividend of TRY 30mn in May and new borrowing of TRY 123mn. Thus, financial debt to EBITDA jumped to 1.3x, which can be affordable at this level, given the prospective cash proceeds from pre-sales. The company aims to launch three new projects in 2H11, expecting to generate over TRY 1bn in revenue from these projects by 2013.

Torunlar REIT reported a TRY 15mn net loss for 2Q11 (2Q10: TRY 127mn net profit, 1Q11: TRY 9mn net profit), mainly due to a TRY 34.2mn FX loss in this period. Note that the company posted a TRY 17mn FX gain in 2Q10 and a one-off TRY 115mn gain from fair value adjustments in the same period. Revenues increased 66% y/y and declined 2% q/q to TRY 41mn in 2Q11. Torunlar REIT generated TRY 26.8mn in rental income (up 120% y/y, up 8% q/q) and TRY 10.8mn in revenues from residential unit sales (up 3% y/y, down 16% q/q). Rental income increased y/y, due to the commencement of the Torium Shopping Mall in 4Q10. EBITDA reached TRY 15mn in 2Q11 (2Q10: TRY 9mn, 1Q11: TRY 21mn), marking a 37% EBITDA margin. The EBITDA margin deteriorated 14pp q/q, mainly due to increasing common area expenses in shopping malls and increasing marketing expenses (mainly related to the launch of the Mall of Istanbul project and the Bursa Korupark Terrace project) this quarter. The EBITDA margin improved 1.2pp y/y; however, the company recorded a TRY 4mn one-off donation to the Bursa Municipality in 2Q10, so the y/y comparison is not meaningful. Thanks to the cash generation from pre-sales in new projects, the company's net debt declined to TRY 278mn as of June 2011, from TRY 348mn as of December 2010. Finally, Torunlar REIT plans to begin a share buyback program.

Is REIT reported TRY 9.6mn net profit for 2Q11 (2Q10: TRY 11.3mn, 1Q11: TRY 9.8mn), lower than the consensus estimate of TRY 11.7mn. Revenues increased 18% y/y and 3% q/q to TRY 27.5mn (consensus: TRY 26.7mn) in 2Q11. Is REIT generated TRY 21.4mn in rental income (78% of total revenues) and TRY 4.2mn in revenues from service charges. The company's rental income and service charge revenues increased 2% and 7%, respectively, on a quarterly basis, in parallel with the TRY depreciation. EBITDA reached TRY 17.2mn in 2Q11, lower than the consensus estimate of TRY 18mn. However, the company recorded one-off provisions for impairment (based on investment properties) and reversals of previously reported provisions, which are recorded in the COGS account. If we exclude one-off provision-related items, EBITDA increased 24% y/y and 1% q/q to TRY 19.0mn and the EBITDA margin improved 3.3pp y/y to 69% (1Q11: 70%). Although the top line is slightly higher than expected, earnings fell short of expectations, mainly due to higher than expected financial expenses and net provision expense.

GTC reported a 2Q11 net loss of EUR 36.5mn, well below consensus and our estimates, due to an unexpectedly large revaluation loss of EUR 51mn and also due to high administrative expenses linked to the sale of Galeria Mokotow. Core rental revenues were good, with 8% q/q and 9% y/y increase (better than we expected). We saw a y/y increase in rental revenues from Romania and Bulgaria, as rents in recently completed assets increased. GTC cited the ‘euro debt crisis’ as a reason for the revaluation loss (mainly in SEE retail), but average yield remained close to FY10. The company mainly lowered its estimates for future rental revenues in SEE. LTV went up from 51% to 54%, but the balance sheet does not reflect the sale of Galeria Mokotow yet. GTC said it will postpone several projects from 2011-12 to 2013 due to market conditions. It is clear that the retail segment in SEE is a drag on GTC’s results and its recovery takes longer than expected. We did not see any upward revaluation in Poland, which is surprising, given the strong local market fundamentals. Standing portfolio and recently finished assets show good performance. We thus believe the weak results are priced in already at 0.65x P/BV.

Orco reported a EUR 7.5mn net loss for 1H11, worse than our EUR -5.6mn estimate. Revenues declined by 52% y/y, to EUR 73.6mn, and were 9% below our estimates. The main reason was that Orco did not book any big commercial development asset sale and was instead selling investment assets (EUR 120.3mn), which are not reflected in revenues. Development revenues thus declined 82% y/y (in line). Core rental and related revenues



declined by 4.9% y/y, to EUR 50.1mn (excluding pre-sold Russian operations), while we expected more or less stable development. Orco surprisingly did not perform assets revaluation, but booked EUR 11mn gain on assets sales (Leipziger Platz). Orco’s EPRA NAV decreased by 4.1%, to EUR 27.4/share from EUR 28.6/share (note that NNNAV is around EUR 18/share). Orco’s LTV went down slightly to 67.7%, but the volume of short-term debt increased to the worrying level of EUR 800mn, as the maturity of EUR 400mn loans and bonds in Orco Germany is less than one year. Overall, the 1H11 results were somewhat worse than expected, due to still declining rental revenues. However, the sale of Russian assets and refinancing of Orco Germany are much more important issues right now (see below).

Orco sold Russian assets for a net price of EUR 53mn. Orco announced that it has sold its stakes in Russian activities with NAV at approx. EUR 57mn for EUR 53mn. The agreement contains a further provision entitling Orco to a percentage of future sales. A sale of Russian assets is not surprising as it was already planned. The announced price, with a 7% discount to NAV, translates to around a 3.5% discount to gross asset value. We see as positive mainly the fact that Orco will get EUR 53mn net cash from the transaction, while the EUR -0.24/share impact on NAV is not that high. Orco also disclosed substantial losses on the Russian operations with the 1H11 results, which makes the discount more acceptable.

MSREI has become Orco’s biggest shareholder. Orco announced that MSREI will swap its stakes in Orco Germany and in Orco’s Endurance funds for 3mn fresh Orco shares. Following the completion of the transaction, MSREI will become the largest shareholder of Orco, with approx. an 18.7% stake. Orco will increase its stake in Orco Germany from 59% to approx. 91.6%. Orco said the transaction was done at EUR 9/share of Orco and EUR 1.26/share of Orco Germany (prevailing prices at that time). We calculate that the deal will be dilutive for reported EPRA NAV and NNNAV of Orco, but accretive for its underlying NAV, with Orco’s bonds assumed at their nominal value. The transaction increases Orco’s exposure to the heavily indebted Orco Germany, but also brings in Morgan Stanley as a big shareholder of Orco. We have mixed feelings about the transaction.

Orco Germany restructuring faces difficulties. Orco elaborated on Orco Germany refinancing during the 1H11 conference call. The EUR 305mn loan on the GSG portfolio (maturing in April 2012) will not be refinanced by the original bank and Orco is negotiating loans with other banks for smaller parts of the portfolio. Orco sees EUR 275mn to EUR 225mn refinancing as realistic. Orco is hoping for a debt to equity swap of the EUR 100mn bonds of Orco Germany (maturing in May 2012), while a swap to parent Orco shares seems more realistic than a swap to OG shares. However, Orco is still far from agreement on the transaction price with the bondholders. We feel that the parties are generally willing to close the deal and expect a swap close to the current share price at EUR 6-7/share. Overall, Orco will get a lot of cash from the sale of Russian assets, but we would not be surprised to see the money flowing to Orco Germany to support refinancing of GSG.




CA IMMO EUR 852.2 3% 4.6% 6.6% 5.6% 70.7% 65.6% 71.0% 66.5% -15.7% -27.1% -23.0% 4.3%conwert EUR 848.9 2% 3.0% 3.7% 4.1% 83.3% 52.7% 52.1% 51.3% -7.3% -13.0% -15.7% 10.7%Emlak Konut REIT TRY 2,275.0 17% 7.7% 12.4% 21.3% 43.6% 35.5% 39.1% 37.5% -14.8% -28.0% -13.7% -6.2%GTC EUR 640.5 4% 13.0% 12.0% 40.2% 48.6% 42.6% -29.4% -41.9% -43.8% -50.3%Immofinanz EUR 2,357.0 6% 6.1% 6.8% 7.0% 50.7% 50.7% 53.9% 56.3% -5.9% -18.4% -20.7% -5.4%Orco EUR 83.9 130% 7.5% 7.7% 11.2% 11.5% 25.7% -22.3% -33.6% -28.0% -4.2%S Immo EUR 268.7 0% 3.7% 7.6% 9.3% 40.8% 47.0% 49.4% 51.5% -10.3% -19.8% -22.6% -24.1%Sinpas REIT TRY 316.9 7% 19.2% 19.2% 11.1% 15.8% 26.8% 23.0% 27.0% -22.9% -21.4% -20.2% -25.5%Median - - 5% 7% 7% 6% 47% 50% 47% 54% - - - -Atrium European Real EstaEUR 1,603.3 4.7% 4.4% 4.9% 5.3% 95.9% 0% 0% 0% -5.1% -7.3% -3.9% 10.5%Warimpex Finanz- und BeteEUR 113.2 -8% 3.6% 9.2% 0.0% 0.0% 0.0% 0.0% 2.3% -20.9% -16.8% 2.8%XXI Century Investments P GBP 36.3 0.0% 0.0% 0.0% 0.7% -6.5% -46.2% -73.9%Echo Investment S.A. PLN - 478.1 7.8% 10.9% 10.0% 9.5% - 0.0% 0.0% - -10.6% -11.0% 0.9% -1.2%Median Peers - 5% 5.2% 7.1% 5.7% 68.0% 50.3% 0.0% 0.0% - - - -CEE to Peer, Prem/Disc - -4% 31% 2% 10% -31% -1% - - - - - -


2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eCA IMMO 18.7 10.9 7.9 9.1 80.7 23.9 15.8 12.8 0.52 0.49 0.47 0.48conwert 37.3 21.2 16.7 14.6 -99.7 22.4 19.5 17.8 0.69 0.63 0.61 0.59Emlak Konut REIT 10.2 18.1 11.6 5.9 9.9 17.0 11.6 5.9 1.37 1.50 1.37 1.15GTC 32.3 4.6 4.4 -390.6 -41.0 -114.1 1.34 0.56 0.49Immofinanz 8.4 7.9 7.2 6.7 8.4 9.0 8.5 7.9 0.49 0.50 0.48 0.46Orco 0.4 3.5 3.1 0.5 -1.7 -1.9 0.34 0.25 0.23S Immo 195.2 14.4 6.5 4.9 20.2 13.3 9.1 7.1 0.75 0.52 0.47 0.44Sinpas REIT 16.5 3.7 3.5 5.4 15.5 3.6 3.4 5.1 1.11 0.71 0.62 0.59Median CEE 14.4 9.4 7.6 7.9 4.5 13.0 10.0 10.4 0.61 0.53 0.49 0.54Atrium European Real Estate L 15.7 15.9 13.9 12.0 16.6 17.6 14.4 14.1 0.73 0.71 0.69 0.64Warimpex Finanz- und Beteilig 34.4 12.9 4.4 7.2 4.9 1.26 1.24 1.18XXI Century Investments PublEcho Investment S.A. 12.9 8.4 7.7 8.0 16.1 19.8 11.1 7.0 1.00 0.91 0.77 0.76Median Peers 12.9 12.5 12.1 8.8 - 13.7 10.2 11.6 0.87 0.81 0.73 0.64CEE to Peer, Prem/Disc 12% -25% -37% -10% - -5% -1% -11% -30% -35% -33% -16%

2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eCA IMMO 0.51 0.49 0.46 0.47 18.9 19.0 15.7 16.0 0.0% 4.1% 4.2% 4.7%conwert 0.75 0.68 0.66 0.64 16.1 20.5 19.2 18.9 2.8% 2.9% 3.1% 3.3%Emlak Konut REIT 7.5 17.4 8.8 4.7 0.0% 3.4% 2.0% 3.5%GTC 1.13 0.46 0.41 37.5 19.4 16.2 0.0% 0.0% 0.0%Immofinanz 0.45 0.46 0.44 0.43 18.6 17.3 15.3 14.6 4.1% 6.0% 7.8% 7.9%Orco 0.26 0.20 0.18 35.9 22.9 19.0 0.0% 0.0% 0.0%S Immo 0.69 0.48 0.43 0.39 26.2 19.2 17.9 16.2 0.0% 2.5% 3.8% 4.1%Sinpas REIT 17.9 3.0 1.8 0.1 0.0% 4.2% 7.5% 8.7%Median CEE 0.51 0.46 0.44 0.47 18.7 19.2 16.0 15.3 0.0 0.0 0.0 0.0Atrium European Real Estate L - - - - 13.0 17.7 14.6 13.9 2.8% 3.3% 3.7% 4.0%Warimpex Finanz- und Beteilig - - - - 24.0 17.2 14.1 0.0% 0.0% 0.0%XXI Century Investments Publ - - - -Echo Investment S.A. - - - - 21.6 10.4 9.2 10.5 0.0% 0.0% 0.0% 0.0%Median Peers - - - - 21.3 17.5 14.3 13.9 1.4% 1.6% 1.9% 4.0%CEE to Peer, Prem/Disc - - - - -12% 10% 11% 11% - - - -

P/E P/CE P/BV

P/NAV EV/EBITDA Dividend yield




CA IMMO Accumulate Target price EUR 15.0Price (EUR) 9.70 ROE 2010 2.8% 10 11e 12e 13e

Net debt (EURmn, 10) 1,770.5 Tot. revenues (EUR mn) 197.3 314.2 328.7 337.8Mcap (EUR mn) 852.2 Gearing (2010) 106.7% NOI yield 5.1% 6.2% 5.4% 5.5%Free f loat (%) 82.8% Loan/value (2010) 48.7% EBIT margin 92.9% 83.3% 94.0% 79.4%Free f loat (EUR mn) 705.4 Reven. CAGR 10-13e 12.5% Net margin 22.2% 29.5% 40.4% 36.1%Shares outst. (mn) 87.9 NAV CAGR 10-13e 2.7% EPS (EUR) 0.52 0.89 1.22 1.07

Dividend/share (EUR) 0.00 0.40 0.40 0.45NAV/share (EUR) 18.95 19.95 20.92 20.54EV/EBITDA 18.90 18.98 15.73 16.05P/E 18.65 10.93 7.94 9.08P/CE 80.73 23.88 15.79 12.85P/BV 0.52 0.49 0.47 0.48Dividend yield 0.00% 4.12% 4.16% 4.66%P/BV rel. 0.9 0.9 1.0 0.9P/E rel. 1.3 1.2 1.1 1.2

Performance 1M 3M 6M 12MAbsolute (EUR terms) -15.7% -27.1% -23.0% 4.3%Rel. to sector (EUR, ppt) -3.4 -4.6 -4.4 8.9Rel. to universe (EUR, ppt) -5.8 -12.3 -11.7 10.5

conwert Hold Target price EUR 12.4Price (EUR) 10.20 ROE 2010 1.8% 10 11e 12e 13e

Net debt (EURmn, 10) 2,049.7 Tot. revenues (EUR mn) 222.1 250.6 251.3 249.7Mcap (EUR mn) 848.9 Gearing (2010) 154.1% NOI yield 4.8% 5.1% 5.5% 5.7%Free f loat (%) 77.5% Loan/value (2010) 63.3% EBIT margin 46.5% 57.8% 59.9% 60.8%Free f loat (EUR mn) 657.9 Reven. CAGR 10-13e 5.8% Net margin 11.6% 16.1% 20.2% 23.3%Shares outst. (mn) 83.2 NAV CAGR 10-13e 4.0% EPS (EUR) 0.29 0.48 0.61 0.70

Dividend/share (EUR) 0.30 0.30 0.32 0.34NAV/share (EUR) 14.30 15.00 15.55 16.06EV/EBITDA 16.09 20.48 19.16 18.90P/E 37.28 21.17 16.71 14.62P/CE -99.69 22.38 19.54 17.80P/BV 0.69 0.63 0.61 0.59Dividend yield 2.79% 2.94% 3.14% 3.33%P/BV rel. 1.1 1.2 1.3 1.1P/E rel. 2.6 2.2 2.2 1.9

Performance 1M 3M 6M 12MAbsolute (EUR terms) -7.3% -13.0% -15.7% 10.7%Rel. to sector (EUR, ppt) 5.0 9.5 2.9 15.3Rel. to universe (EUR, ppt) 2.6 1.8 -4.5 16.9

Emlak Konut REIT Buy Target price TRY 3.2Price (TRY) 2.24 ROE 2010 17.2% 10f 11e 12e 13eMcap (TRY mn) 5,600 Net debt (EURmn, 10) 40.4 Tot. revenues (TRY mn) 1,497.9 833.9 1,297.4 2,505.0Mcap (EUR mn) 2,275.0 Gearing (2010) 2.3% NOI yield Free f loat (%) 25.0% Loan/value (2010) EBIT margin 43.6% 35.4% 39.1% 37.5%Free f loat (EUR mn) 568.8 Reven. CAGR 10-13e 30.5% Net margin 31.3% 34.2% 37.3% 38.0%Shares outst. (mn) 2,500.0 NAV CAGR 10-13e #WERT! EPS (TRY) 0.19 0.11 0.19 0.38

Dividend/share (TRY) 0.00 0.07 0.05 0.08NAV/share (TRY) EV/EBITDA 7.46 17.45 8.77 4.74P/E 10.21 18.10 11.58 5.88P/CE 9.86 17.02 11.57 5.88P/BV 1.37 1.50 1.37 1.15Dividend yield 0.00% 3.40% 2.04% 3.45%P/BV rel. 2.3 2.9 2.8 2.2P/E rel. 0.7 1.9 1.5 0.7

Performance 1M 3M 6M 12MAbsolute (TRY terms) -12.5% -22.8% -4.7% 17.9%Rel. to sector (EUR, ppt) -2.5 -5.4 4.8 -1.6Rel. to universe (EUR, ppt) -4.9 -13.1 -2.5 0.0

52 weeks

7

8

9

10

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CA IMMO ATX (Rebased) DJ STOXX Financial Services (Rebased)

52 weeks

7,58,08,59,09,5

10,010,511,011,512,012,5

conwert ATX (Rebased) DJ STOXX Financial Services (Rebased)

52 weeks

1,41,61,82,02,22,42,62,83,03,2

Emlak Konut REITISE 100 (Rebased)DJ STOXX Financial Services (Rebased)



GTC Hold Target price PLN 23.10Price (PLN) 12.13 ROE 2010 4.3% 10 11e 12e 13e

Net debt (EURmn, 10) 1,148.4 Tot. revenues (EUR mn) 169.0 201.1 286.5Mcap (EUR mn) 640.5 Gearing (2010) 109.1% NOI yield 4.7% 5.4% 6.0% Free float (%) 57.6% Loan/value (2010) 51.5% EBIT margin 65.4% 125.8% 95.6% Free float (EUR mn) 369.0 Reven. CAGR 10-13e #WERT! Net margin 16.9% 76.5% 56.2%Shares outst. (mn) 219.4 NAV CAGR 10-13e #WERT! EPS (EUR) 0.19 0.64 0.67

Dividend/share (EUR) 0.00 0.00 0.00NAV/share (EUR) 5.46 6.37 7.17 EV/EBITDA 37.49 19.41 16.21 P/E 32.34 4.57 4.36P/CE -390.56 -41.04 -114.08P/BV 1.34 0.56 0.49Dividend yield 0.00% 0.00% 0.00% P/BV rel. 2.2 1.1 1.0 #WERT!P/E rel. 2.2 0.5 0.6 #WERT!


Immofinanz Buy Target price EUR 4.0Price (EUR) 2.51 ROE 2010 6% 10e 11e 12e 13e

Net debt (EURmn, 10) 4,749.1 Tot. revenues (EUR mn) 757.5 808.6 860.2 875.0Mcap (EUR mn) 2,357.0 Gearing (2010) 98% NOI yield 4.8% 5.1% 5.5% 5.6%Free float (%) 87.5% Loan/value (2010) 50.9% EBIT margin 57.8% 56.7% 62.0% 64.5%Free float (EUR mn) 2,061.2 Reven. CAGR 10-13e 5.0% Net margin 39.7% 38.3% 42.5% 44.8%Shares outst. (mn) 939.8 NAV CAGR 10-13e 3.8% EPS (EUR) 0.30 0.32 0.35 0.37


Performance 1M 3M 6M 12MAbsolute (EUR terms) -5.9% -18.4% -20.7% -5.4%Rel. to sector (EUR, ppt) 6.4 4.1 -2.1 -0.8Rel. to universe (EUR, ppt) 4.0 -3.6 -9.5 0.9

Orco Accumulate Target price EUR 8.2Price (EUR) 5.98 ROE 2010 130% 10 11e 12e 13e

Net debt (EURmn, 10) 1,106.4 Tot. revenues (EUR mn) 314.7 386.5 208.8Mcap (EUR mn) 83.9 Gearing (2010) 311% NOI yield 5.2% 6.2% 6.3%Free float (%) 98.8% Loan/value (2010) 70.3% EBIT margin 16.2% 30.8% 59.4% Free float (EUR mn) 82.9 Reven. CAGR 10-13e #WERT! Net margin 70.8% 7.8% 16.2%Shares outst. (mn) 14.0 NAV CAGR 10-13e #WERT! EPS (EUR) 17.77 1.73 1.93

Dividend/share (EUR) 0.00 0.00 0.00NAV/share (EUR) 28.60 29.52 33.54EV/EBITDA 35.89 22.87 19.01 P/E 0.41 3.46 3.09P/CE 0.45 -1.67 -1.94P/BV 0.34 0.25 0.23Dividend yield 0.00% 0.00% 0.00%P/BV rel. 0.6 0.5 0.5 #WERT!P/E rel. 0.0 0.4 0.4 #WERT!

Performance 1M 3M 6M 12MAbsolute (EUR terms) -22.3% -33.6% -28.0% -4.2%Rel. to sector (EUR, ppt) -10.1 -11.0 -9.4 0.4Rel. to universe (EUR, ppt) -12.4 -18.7 -16.7 2.1

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1012141618202224262830

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52 weeks

2,2

2,4

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2,8

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52 weeks

5,05,56,06,57,07,58,08,59,09,5

10,0

Orco PX (Rebased) DJ STOXX Financial Serv ices (Rebased)



S Immo Buy Target price EUR 6.3Price (EUR) 3.95 ROE 2010 0.4% 10 11e 12e 13eMcap (EUR mn) 269 Net debt (EURmn, 10) 1,220.1 Tot. revenues (EUR mn) 174.9 194.8 199.3 210.2Mcap (EUR mn) 268.7 Gearing (2010) 158.3% NOI yield 4.8% 5.0% 5.5% 5.8%Free f loat (%) 81.0% Loan/value (2010) 65.3% EBIT margin 34.6% 48.4% 59.1% 64.1%Free f loat (EUR mn) 217.7 Reven. CAGR 10-13e 8.2% Net margin 1.2% 11.1% 21.3% 26.8%Shares outst. (mn) 68.1 NAV CAGR 10-13e 8.1% EPS (EUR) 0.03 0.27 0.61 0.81


Performance 1M 3M 6M 12MAbsolute (EUR terms) -10.3% -19.8% -22.6% -24.1%Rel. to sector (EUR, ppt) 2.0 2.7 -4.1 -19.5Rel. to universe (EUR, ppt) -0.4 -5.0 -11.4 -17.9

Sinpas REIT Buy Target price TRY 2.6Price (TRY) 1.56 ROE 2010 7.1% 10f 11e 12e 13eMcap (TRY mn) 780 Net debt (EURmn, 10) -3.9 Tot. revenues (TRY mn) 353.3 727.2 974.7 551.1Mcap (EUR mn) 316.9 Gearing (2010) -0.9% NOI yieldFree f loat (%) 36.9% Loan/value (2010) EBIT margin 14.6% 26.1% 22.3% 25.6%Free f loat (EUR mn) 117.0 Reven. CAGR 10-13e 34.0% Net margin 17.3% 26.9% 23.2% 26.1%Shares outst. (mn) 500.0 NAV CAGR 10-13e #WERT! EPS (TRY) 0.12 0.39 0.45 0.29

Dividend/share (TRY) 0.00 0.06 0.12 0.14NAV/share (TRY)EV/EBITDA 17.90 3.03 1.83 0.08P/E 16.49 3.68 3.46 5.41P/CE 15.46 3.58 3.36 5.13P/BV 1.11 0.71 0.62 0.59Dividend yield 0.00% 4.17% 7.51% 8.68%P/BV rel. 1.8 1.4 1.3 1.1P/E rel. 1.1 0.4 0.5 0.7

Performance 1M 3M 6M 12MAbsolute (TRY terms) -20.8% -15.7% -11.9% -5.5%Rel. to sector (EUR, ppt) -10.6 1.2 -1.7 -20.9Rel. to universe (EUR, ppt) -13.0 -6.5 -9.0 -19.3

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Sector Insight Retail & Distribution


– BIM reported TRY 62mn net profit in 2Q11, slightly lower than expected

BIM reported a TRY 62.2mn net profit for 2Q11 (down 22% q/q, up 36% y/y), slightly lower than both our expectation of TRY 67mn and the consensus estimate of TRY 66mn. The deviation between our estimate and the announced net profit stemmed from the higher than expected OPEX. The company increased its revenues 25% y/y and 3% q/q to TRY 1,936mn in 2Q11, in line with our expectation of TRY 1,886mn and the consensus estimate of TRY 1,890mn. Revenue growth came from L-F-L growth and newly-opened stores. As of June 2011, BIM’s total store number had reached 3,189 in Turkey, following the opening of 141 new stores in 2Q11. As a result of pricing pressure in the competitive domestic market environment, the gross margin declined to 15.8% in 2Q11 (down 0.9pp q/q, down 0.5pp y/y), marking the lowest quarterly level ever seen. Meanwhile, the OPEX (excluding depreciation) to revenues ratio rose to 11.2% (up 0.4pp q/q, down 0.8pp y/y), mainly due to the cost of hiring staff for newly-opened stores, in addition to increased rental expenses. EBITDA rose 33% y/y (down 20% q/q) to TRY 90mn (our expectation: TRY 99mn, consensus: TRY 95mn), while the EBITDA margin improved 0.3pp q/q (contracting 1.3% q/q) to 4.6% in 2Q11, thus lower than expected. The company’s cash position declined TRY 193mn to TRY 160mn this quarter, mainly due to the distribution of a TRY 182mn cash dividend in May.

BIM competitor A101 receives seven bids for stake – press. Turkish hard discount retailer A101 reportedly received seven bids for the sale of an 8-10% stake in the company. The total value proposed was in the range of TRY 800mn to TRY 1bn for the whole company. A101 is the third biggest food retailer in Turkey, with 1,075 stores throughout the country. A101 targets to reach 1,200 stores by the end of 2011 and open 500 new stores every year in the coming five years. A101 is the main competitor of BIM. Recall that Yildiz Holding recently acquired Migros' Sok stores for TRY 600mn (which implies approximately 0.5x EV/Sales). Sok is the second biggest food retailer in Turkey, with 1,232 stores. The aggressive growth strategies of hard discounters make the competition in the hard discount market stiffer. BIM currently trades at 1.0x EV/Sales, based on our 2011 expectations.




Action SA PLN 61.0 14.5% 17.3% 15.6% 15.0% 2.2% 2.5% 2.5% 2.5% -21.8% -27.4% -23.9% -14.3%BIM TRY 3,391.8 56.8% 53.6% 51.7% 50.2% 5.3% 5.3% 5.2% 5.2% -7.7% 0.5% -2.4% 4.4%Emperia Holding PLN 366.3 10.4% 8.8% 5.3% 5.6% 3.2% 3.8% 5.7% 5.6% -8.5% -12.6% -15.9% 15.1%Empik PLN 233.6 11.5% 12.4% 6.2% 6.2% -39.2% -49.6% -53.9% -50.9%Eurocash PLN 810.5 31.8% 39.5% 39.8% 34.3% 3.1% 3.3% 3.5% 3.6% -14.8% -18.0% -24.0% 5.7%LPP PLN 872.0 20.3% 25.5% 26.3% 26.9% 14.4% 15.1% 14.4% 14.1% -10.6% -16.8% -5.3% 10.7%NG2 PLN 406.7 30.9% 28.4% 30.3% 31.4% 14.8% 16.6% 17.9% 18.4% -23.0% -25.3% -29.7% -23.2%Vistula Group PLN 25.1 0.6% 3.5% 4.6% 5.9% 11.1% 12.6% 12.6% 12.9% -33.4% -50.1% -54.0% -61.9%Median - - 17% 21% 26% 27% 6% 6% 6% 6% - - - -Next PLC GBP 4,752 168.5% 129.6% 104.9% 88.4% 20.1% 20.3% 20.5% 20.4% 8.4% 9.5% 18.6% 5.8%Hugo Boss AG EUR 5,213 55.1% 57.7% 52.8% 48.1% 19.4% 22.3% 22.9% 23.7% 18.1% 13.9% 51.4% 111.0%Benetton Group S.p.A. EUR 897 7.2% 5.4% 5.8% 6.1% 14.6% 12.7% 13.5% 14.2% -5.5% -10.9% -5.4% -9.0%EDOB Abwicklungs AG EUR 2 0.0% 0.0% 0.0% -11.4% -38.4% -78.7% -72.6%Ted Baker PLC GBP 381 22.8% 22.0% 20.8% 20.8% 16.4% 16.2% 16.8% 17.0% 4.1% 12.5% 18.4% 52.0%Baltika A.S. EUR 20 -51.3% - - - 0.0% - - - -5.0% -39.7% -47.9% -12.5%Damartex S.A. EUR 166 9.6% 13.5% 11.9% 12.2% 5.6% 0.0% 5.9% 0.0% -3.2% -3.1% -2.2% 10.7%French Connection Group PGBP 77 3.4% 4.8% 4.5% 4.4% -16.2% -30.1% 0.0% 41.0%Industria de Diseno Textil SEUR 39,488 27.1% 25.9% 25.9% 26.6% 23.7% 23.0% 23.5% 23.5% 1.3% 4.9% 15.3% 22.6%Gerry Weber International AEUR 1,065 27.8% 28.3% 32.8% 29.4% 15.3% 16.1% 16.5% 16.9% 6.6% 4.0% 30.8% 88.7%Silvano Fashion Group A.S EUR 129 29.0% 34.2% 28.0% 28.4% 0.0% 0.0% 0.0% 0.0% 2.4% 3.0% -1% 91.5%Hennes & Mauritz AB SEK - 39,440 42.3% 36.3% 39.0% 40.0% 25.6% 22.4% 23.3% 23.6% 2.3% -4.6% -0.4% -1.0%Median Total - 92,543 27.1% 25.9% 25.9% 26.6% 16.0% 16.2% 16.7% 17.1% - - - -EuroStoxx Retail 116,955 13.0% 11.0% 11.6% 12.5% 7% 7% 7% 7% -5.3% -15.5% -21.7% -2.9%CEE to Peer, Prem/Disc - -36% -17% 1% 1% -64% -65% -66% -67% - - - -


2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAction SA 11.0 7.1 7.1 6.7 7.1 5.3 5.3 5.1 1.5 1.2 1.0 1.0BIM 28.5 25.7 23.0 19.1 22.3 20.5 18.5 15.5 14.2 13.3 10.7 8.7Emperia Holding 16.8 16.1 23.3 22.1 8.6 12.1 15.5 12.5 1.7 1.2 1.2 1.2Empik 13.2 11.0 5.9 5.3 1.4 1.3Eurocash 24.5 15.3 11.2 9.6 16.3 10.8 8.6 7.7 6.9 5.4 3.8 2.9LPP 24.3 17.6 15.8 14.1 14.3 11.5 10.8 9.8 4.7 4.4 4.0 3.6NG2 14.0 12.9 10.6 9.1 11.7 10.6 8.9 7.8 3.9 3.5 3.0 2.8Vistula Group 137.3 10.3 7.6 5.7 26.2 3.7 3.6 3.6 0.8 0.4 0.3 0.3Median CEE 20.5 14.1 11.2 9.6 13.0 10.7 8.9 7.8 2.8 2.4 3.0 2.8Next PLC 10.9 10.3 9.4 8.8 9.9 8.5 7.5 6.8 18.3 13.4 9.9 7.7Hugo Boss AG 28.0 19.9 17.4 15.8 20.0 15.4 13.9 12.4 15.4 11.5 9.2 7.6Benetton Group S.p.A. 8.3 10.9 9.8 9.1 4.4 4.8 4.5 4.1 0.6 0.6 0.6 0.6EDOB Abwicklungs AGTed Baker PLC 19.0 17.7 16.3 14.1 4.3 3.9 3.4 2.9Balt ika A.S. 31.5 9.0 1.6 1.9 1.7 1.4Damartex S.A. 12.9 8.3 8.6 8.1 4.5 6.0 3.9 5.2 1.2 1.1 1.0 1.0French Connection Group PLC 9.4 9.4 8.4 7.6 9.8 9.6Industria de Diseno Textil S.A. 22.8 21.0 18.4 16.4 16.3 15.1 13.4 12.3 6.2 5.4 4.8 4.3Gerry Weber International AG 18.3 16.3 14.2 13.4 14.9 13.5 21.5 23.0 5.1 4.6 4.7 4.0Silvano Fashion Group A.S. 10.5 7.9 7.8 7.1 7.8 8.9 6.7 6.0 3.0 2.7 2.2 2.0Hennes & Mauritz AB 19.0 21.9 18.5 16.5 16.3 18.4 15.4 13.9 8.1 7.9 7.2 6.6Median Total 16.0 16.3 14.5 10.6 9.9 10.1 9.2 8.2 4.3 3.9 3.4 2.9EuroStoxx Retail 13.2 12.3 10.5 9.2 6.0 6.6 5.7 5.1 1.5 1.4 1.3 1.3CEE to Peer, Prem/Disc 28% -13% -23% -9% 32% 6% -3% -5% -36% -38% -12% -5%

P/CE P/BVP/E




2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAction SA 0.2 0.1 0.1 0.1 7.8 5.3 5.1 4.7BIM 1.0 0.9 0.8 0.6 18.7 17.1 15.1 12.3Emperia Holding 0.3 0.2 0.4 0.4 8.7 4.9 7.6 7.4Empik 0.4 0.3 6.1 5.3Eurocash 0.4 0.3 0.3 0.2 14.4 10.5 7.7 6.3LPP 1.8 1.5 1.3 1.2 12.6 9.7 9.1 8.2NG2 1.7 1.5 1.3 1.2 11.5 8.8 7.3 6.4Vistula Group 1.3 0.8 0.8 0.7 11.8 6.4 6.0 5.3Median CEE 0.7 0.6 0.8 0.6 11.7 7.6 7.6 6.4Next PLC 1.2 1.3 1.3 1.2 6.0 6.5 6.2 5.7Hugo Boss AG 2.3 2.7 2.4 2.2 11.8 12.1 10.6 9.3Benetton Group S.p.A. 0.7 0.7 0.7 0.6 4.6 5.3 4.8 4.4EDOB Abwicklungs AGTed Baker PLC 1.4 1.5 1.4 1.3 8.3 9.5 8.3 7.4Balt ika A.S.Damartex S.A. 0.3 0.2 0.2 0.2 5.3 3.6 3.2 3.0French Connection Group PLC 0.2 0.1 0.1 0.1 6.5 2.9 1.5 2.7Industria de Diseno Textil S.A. 2.5 2.5 2.2 1.9 10.6 11.0 9.4 8.2Gerry Weber International AG 1.4 1.5 1.3 1.1 8.8 9.2 7.8 6.7Silvano Fashion Group A.S. 0.9 1.0 0.8 0.7 4.5 4.1 3.5 2.7Hennes & Mauritz AB 3.2 3.0 2.7 2.4 12.5 13.5 11.5 10.1Median Total 1.2 1.3 1.3 1.1 6.5 6.9 6.2 5.7EuroStoxx Retail 0.4 0.3 0.3 0.3 6.6 5.7 5.4 5.0CEE to Peer, Prem/Disc -41% -56% -41% -44% 79% 11% 22% 12%

EV/Sales EV/EBITDA




Action SA Buy Target price PLN 24.0Price (PLN) 15 ROCE 2010 11.7% 10 11e 12e 13eMcap (PLN mn) 253 ROE 2010 14.5% Sales (PLN mn) 2,105.9 2,298.1 2,367.0 2,438.0Mcap (EUR mn) 61 Net debt (EURmn, 10) 18.5 EBITDA margin 2.19% 2.50% 2.48% 2.47%Free float (%) 52.0% Gearing (2010) 39% EBIT margin 1.64% 2.01% 2.00% 2.00%Free float (EUR mn) 32 Sales CAGR 10-13e -5.7% Net profit margin 1.22% 1.49% 1.51% 1.55%Shares outst. (mn) 16.4 EPS CAGR 10-13e 12.8% EPS (PLN) 1.60 2.08 2.18 2.30



BIM Hold Target price TRY 54.6Price (TRY) 55.0 ROCE 2010 101.7% 10e 11e 12e 13eMcap (TRY mn) 8,349 ROE 2010 56.8% Sales (TRY mn) 6,606.2 8,115.6 9,861.6 11,751.5Mcap (EUR mn) 3,392 Net debt (EURmn, 10) -148.6 EBITDA margin 5.25% 5.26% 5.20% 5.20%Free float (%) 54.8% Gearing (2010) -62% EBIT margin 4.28% 4.37% 4.36% 4.38%Free float (EUR mn) 1,859 Sales CAGR 10-13e 21.9% Net profit margin 3.60% 3.69% 3.69% 3.72%Shares outst. (mn) 152 EPS CAGR 10-13e 0.6% EPS (TRY) 1.57 1.97 2.39 2.88


Performance 1M 3M 6M 12MAbsolute (TRY terms) -5.2% 7.8% 7.8% 32.5%Rel. to sector (EUR, ppt) 1.7 6.7 4.5 -9.0Rel. to universe (EUR, ppt) 2.2 15.4 8.8 10.6

Emperia Holding Hold Target price PLN 100.0Price (PLN) 100.7 ROCE 2010 8.8% 10e 11e 12e 13eMcap (PLN mn) 1,522 ROE 2010 10.4% Sales (PLN mn) 5,975 4,262 2,019 2,211Mcap (EUR mn) 366 Net debt (EURmn, 10) 53 EBITDA margin 3.21% 3.83% 5.69% 5.58%Free float (%) 70.0% Gearing (2010) 24% EBIT margin 2.09% 2.61% 3.29% 3.23%Free float (EUR mn) 256 Sales CAGR 10-13e -20.5% Net profit margin 1.46% 2.12% 3.24% 3.11%Shares outst. (mn) 15.1 EPS CAGR 10-13e -0.2% EPS (PLN) 5.75 5.97 4.32 4.55


Performance 1M 3M 6M 12MAbsolute (PLN terms) -5.0% -8.3% -12.1% 20.6%Rel. to sector (EUR, ppt) 0.8 -6.4 -9.0 1.7Rel. to universe (EUR, ppt) 1.3 2.3 -4.7 21.4

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Empik Under review Target price PLN Price (PLN) 9.4 ROCE 2010 8.5% 10e 11e 12e 13eMcap (PLN mn) 971 ROE 2010 11.5% Sales (PLN mn) 3,099.3 3,476.2Mcap (EUR mn) 234 Net debt (EURmn, 10) 54 EBITDA margin 6.16% 6.24% Free float (%) 37.0% Gearing (2010) 32% EBIT margin 3.35% 3.56% Free float (EUR mn) 86 Sales CAGR 10-13e #WERT! Net profit margin 2.27% 2.52%Shares outst. (mn) 103.2 EPS CAGR 10-13e #WERT! EPS (PLN) 0.69 0.82

Dividend/share (PLN) 0.00 0.00EV/sales 0.38 0.33 EV/EBITDA 6.12 5.33 P/E 13.17 10.99P/CE 5.94 5.27P/BV 1.42 1.32Dividend yield 0.00% 0.00% EV/EBITDA rel. 0.5 0.7 #WERT!P/E rel. 0.6 0.8 #WERT!


Eurocash Buy Target price PLN 37.0Price (PLN) 24.7 ROCE 2010 29.4% 10e 11e 12e 13eMcap (PLN mn) 3,367 ROE 2010 31.8% Sales (PLN mn) 7,729.2 11,720.3 15,022.9 15,963.4Mcap (EUR mn) 810 Net debt (EURmn, 10) 46 EBITDA margin 3.10% 3.30% 3.49% 3.60%Free float (%) 48.5% Gearing (2010) 39% EBIT margin 2.34% 2.57% 2.89% 3.02%Free float (EUR mn) 393 Sales CAGR 10-13e 24.2% Net profit margin 1.70% 1.81% 2.03% 2.23%Shares outst. (mn) 136.3 EPS CAGR 10-13e 35.0% EPS (PLN) 0.97 1.55 2.20 2.57


Performance 1M 3M 6M 12MAbsolute (PLN terms) -11.5% -13.9% -20.5% 10.8%Rel. to sector (EUR, ppt) -5.4 -11.8 -17.0 -7.7Rel. to universe (EUR, ppt) -4.9 -3.1 -12.8 12.0

LPP Reduce Target price PLN 1,700.0Price (PLN) 2,070.0 ROCE 2010 16.4% 10e 11e 12e 13eMcap (PLN mn) 3,623 ROE 2010 20.3% Sales (PLN mn) 2,032 2,443 2,825 3,180Mcap (EUR mn) 872 Net debt (EURmn, 10) 47 EBITDA margin 14.38% 15.06% 14.45% 14.10%Free float (%) 48.5% Gearing (2010) 25% EBIT margin 9.48% 10.86% 10.73% 10.61%Free float (EUR mn) 423 Sales CAGR 10-13e 12% Net profit margin 7.06% 8.06% 8.12% 8.08%Shares outst. (mn) 1.8 EPS CAGR 10-13e 25.1% EPS (PLN) 81.95 112.50 131.07 146.90

Dividend/share (PLN) 62.22 85.42 99.52 111.54EV/sales 1.81 1.46 1.31 1.16EV/EBITDA 12.55 9.66 9.09 8.20P/E 24.28 17.63 15.79 14.09P/CE 14.32 11.53 10.79 9.81P/BV 4.65 4.36 3.97 3.63Dividend yield 3.13% 4.31% 4.81% 5.39%EV/EBITDA rel. 1.1 1.3 1.2 1.3P/E rel. 1.2 1.3 1.4 1.5Performance 1M 3M 6M 12MAbsolute (PLN terms) -7.1% -12.7% -1.0% 16.0%Rel. to sector (EUR, ppt) -1.2 -10.6 1.6 -2.7Rel. to universe (EUR, ppt) -0.7 -1.9 5.9 16.9

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NG2 Sell Target price PLN 50.0Price (PLN) 44.0 ROCE 2010 27.0% 10e 11e 12e 13eMcap (PLN mn) 1,690 ROE 2010 30.9% Sales (PLN mn) 1,000.3 1,148.3 1,295.9 1,427.4Mcap (EUR mn) 407 Net debt (EURmn, 10) 22 EBITDA margin 14.84% 16.55% 17.91% 18.35%Free f loat (%) 52.2% Gearing (2010) 21% EBIT margin 12.59% 14.20% 15.64% 16.19%Free f loat (EUR mn) 212 Sales CAGR 10-13e 11.5% Net profit margin 11.61% 10.94% 12.35% 12.98%Shares outst. (mn) 38.4 EPS CAGR 10-13e 22.0% EPS (PLN) 3.02 3.27 4.17 4.83

Dividend/share (PLN) 1.50 2.00 3.75EV/sales 1.71 1.46 1.31 1.18EV/EBITDA 11.52 8.85 7.33 6.43P/E 13.98 12.89 10.55 9.12P/CE 11.70 10.58 8.90 7.81P/BV 3.86 3.48 2.97 2.77Dividend yield 3.55% 4.74% 8.52% EV/EBITDA rel. 1.0 1.2 1.0 1.0P/E rel. 0.7 0.9 0.9 0.9


Vistula Group Buy Target price PLN 2.0Price (PLN) 1.0 ROCE 2010 4.4% 10 11e 12e 13eMcap (PLN mn) 104 ROE 2010 0.6% Sales (PLN mn) 353.9 384.8 428.1 469.8Mcap (EUR mn) 25 Net debt (EURmn, 10) 56 EBITDA margin 11.08% 12.64% 12.62% 12.90%Free f loat (%) 80.0% Gearing (2010) 74% EBIT margin 6.57% 8.62% 8.72% 9.27%Free f loat (EUR mn) 20 Sales CAGR 10-13e 3.6% Net profit margin 0.47% 2.72% 3.45% 4.24%Shares outst. (mn) 103.3 EPS CAGR 10-13e 2.2% EPS (PLN) 0.02 0.09 0.13 0.18



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Sector Insight Romanian Funds & other Holdings


– Fondul Proprietatea (FP): State’s stake narrowed to 12.4% as of end of July – Supportive 2011 dividend yield confirmed by Franklin Templeton – SIFs sold another 0.7% stake in BRD-GSG in 1H11, divestment process to continue – Romanian funds are traded at large discounts, from 60% to 70% of official NAV – Sabanci Holding 2Q11 net profit much higher than expected, due to one-off gain – Koc Holding: TRY 557mn net profit for 2Q11 higher than expected

The reimbursement process of FP shares continues to advance at a much faster pace than the market expected, with ex-owners’ heirs receiving a 24.4% stake in FP since the closed end fund’s listing. Currently, the Ministry of Finance stake is 12.4%, Franklin Templeton expectations being that, by to the end of the year, the government will no longer be a shareholder in FP. This should cap the upside potential of FP in the medium term, due to the large stake which will progressively enter the market in the coming period. On the other hand, at the current 60% discount at which FP shares are traded, the stock looks very appealing for institutional investors (which increased their stake in FP after listing from 19% to 40.1%). We therefore see the current price as a good entry opportunity, taking into account an investment horizon of at least one year.

Moreover, according to Franklin Templeton officials there is a clear likelihood of a much better dividend on FY2011 compared to last year. This is definitely supportive for the share price in the short term. Using as a reference the dividend of RON 0.0314/share for FY10, we estimate a 2011 dividend yield of at least 8%, which should be attractive for investors, drawing attention to the most important stock listed on the Bucharest market.

The most important asset management decision of SIFs in the first half of 2011 was the selling of another 0.5% stake in BRD Groupe Societe Generale by SIF3 Transilvania. Excluding SIF3 Transilvania, the other SIFs reported 1H11 net profits well below the level recorded in the similar period of last year, because they did not exit from important holdings from their portfolio. Altogether, the five SIFs sold a 0.7% stake in BRD-GSG in 1H11. Divestment from BRD is the main way for SIFs to achieve their 2011 profitability targets, as was the case in 2010, when SIFs sold a cumulated 2.6% stake in the second largest Romanian bank. In 2010, in the case of three SIFs (SIF2 Moldova, SIF3 Transilvania and SIF4 Muntenia), the profit was mainly fuelled by capital gains from the partial divestment from strategic holding BRD-GSG. SIF2 and SIF4 sold 0.9% and 1.1% stakes, respectively, while SIF3 reduced its stake in BRD by 0.6pp. With limited selling opportunities on the M&A market, the divestment from BRD-GSG was the main way for SIFs to secure liquidity resources, to fuel ambitious dividend distributions (as was the case for FY2010) and to finance investment plans, while achieving generous capital gains. The same policy seems to have remained in place in 2011, and it is expected that the sale of BRD shares will continue. For instance, Societe Generale acquired 2mn BRD-GSG shares transaction (0.29% of the share capital) through a special at a price of RON 12/share in the last trading session from August, with the seller most likely being the financial investment companies (SIFs).

We consider the medium/LT valuation of SIFs is seriously threatened by their aggressive dividend policy. With dividends distribution fuelled by proceeds from divestment from their key holdings (especially BRD Groupe Societe Generale), SIFs’ asset collection might progressively deteriorate, compromising their investment story which is not at all compatible with generous dividend distributions.

Sabanci Holding reported TRY 703mn net profit for 2Q11 (up 75% q/q, 67% y/y), significantly higher than our expectation of TRY 380mn and the consensus estimate of TRY 366mn. The deviation between our estimate and the announced net profit stemmed from a TRY 249mn one-off gain from closing the Aksigorta deal. If we exclude this one-off, net profit would be TRY 454mn, slightly higher than our estimate. The company increased its consolidated revenues (including revenues from the finance and non-finance segments) 9% y/y to TRY 5,330mn. Revenues in the finance segment declined 15% y/y to TRY 2.5bn, while revenues in the non-finance segment increased 44% y/y to TRY 2.8bn in 2Q11, thanks to energy generation, retailing and cement businesses. EBITDA declined 9% y/y and 12% q/q to TRY 1,038mn and the EBITDA margin contracted 3.7pp y/y and 2.3pp q/q to 19.5% in 2Q11.

Koc Holding reported TRY 557mn net profit for 2Q11 (up 37% q/q, down 7% y/y), higher than both our expectation of TRY 440mn and the consensus estimate of TRY 481mn. The main deviation between our expectation and the actual figure stemmed from higher than expected revenues from the non-finance segment, mainly the energy and automotive sectors, and lower financial expenses. Koc Holding increased its consolidated revenues (including revenues from the finance and non-finance segments) 40% y/y and 25% q/q to TRY 18,914mn. EBITDA increased 20% y/y and 7% q/q to TRY 1,567mn (our expectation: TRY 1,569mn, consensus: TRY 1,451mn); however, the EBITDA margin contracted 1.4pp y/y and 1.3pp q/q to 8.3%.

Sector Insight Romanian Funds & other Holdings


Romanian SIFs26/08/2011 Rep. Mcap Recommendation

Curr. Current NAV*Company (EURmn) 1M 3M 6M 12MFondul Proprietatea RON 1,461.0 0.450 0.720 Accumulate -12.8% -8.3% - -SIF 1 Banat Crisana RON 106.0 0.820 1.930 Not rated -18.2% -20.2% -20.5% -21.2%SIF 2 Moldova RON 107.7 0.881 1.831 Not rated -27.8% -30.9% -30.4% -15.3%SIF 3 Transilvania RON 110.1 0.428 1.129 Not rated -13.3% -19.5% -19.1% -20.0%SIF 4 Muntenia RON 97.0 0.510 1.337 Not rated -22.1% -29.2% -19.0% -16.4%SIF 5 Oltenia RON 135.3 0.990 2.055 Not rated -27.6% -28.2% -28.7% -25.6%

Price Performance (EUR terms)

(LC)

2008 2009 2010 Last rep. 2008 2009 2010 Last rep. 2008 2009 2010 Last rep.Fondul Proprietatea - - 5.328,17 15,992.8 - - 1.112 1.163 - - -0.60 -0.62SIF 1 Banat Crisana 1,011.3 1,541.5 1,361.5 1,437.0 1.843 2.809 2.481 2.618 -0.70 -0.60 -0.68 -0.69SIF 2 Moldova 957.9 1,177.5 1,141.2 1,197.2 1.845 2.268 2.199 2.306 -0.71 -0.50 -0.60 -0.62SIF 3 Transilvania 1,335.1 1,627.8 1,506.5 1,437.9 1.222 1.490 1.379 1.317 -0.78 -0.54 -0.70 -0.69SIF 4 Muntenia 1,389.2 1,477.7 1,417.8 1,366.5 1.721 1.831 1.757 1.693 -0.64 -0.61 -0.71 -0.70SIF 5 Oltenia 1,128.3 1,643.4 1,557.4 1,675.1 1.945 2.833 2.684 2.887 -0.70 -0.55 -0.63 -0.65Median SIF - - - - - - - - -0.70 -0.55 -0.68 -0.69

2007 2008 2009 2010 2007 2008 2009 2010 2007 2008 2009 2010SIF 1 Banat Crisana 35.5% -73.7% 222.8% -46.1% -0.6% 28.3% 13.6% -42.6% 47.7% -22.3% 17.5% -43.8%SIF 2 Moldova 16.4% -7.9% 89.0% 7.6% 10.2% 27.9% 55.6% -70.4% 35.6% 43.2% 3.6% -4.1%SIF 3 Transilvania 41.4% -31.1% -19.3% -0.2% 14.9% 15.8% 75.0% -59.3% 107.0% -14.0% 31.6% -42.6%SIF 4 Muntenia -22.7% 89.3% -89.0% 487.2% 7.8% 16.5% 72.9% -71.4% 20.4% 3.4% -8.5% -11.4%SIF 5 Oltenia 48.0% -78.5% 443.5% -36.4% 11.6% 75.4% 5.3% -53.9% 34.9% -17.7% 114% -56.8%Median SIF 35.5% -31.1% 89.0% -0.2% 10.2% 27.9% 55.6% -59.3% 35.6% -14.0% 17.5% -42.6%

2007 2008 2009 2010 2007 2008 2009 2010 2007 2008 2009 2010SIF 1 Banat Crisana 6.9% 6.3% 8.8% 4.3% 29.0% 21.7% 24.6% 12.1% 0.8% 1.2% 0.9% 1.2%SIF 2 Moldova 4.2% 6.9% 9.3% 8.4% 18.8% 25.8% 24.6% 20.4% 1.0% 1.4% 1.4% 1.9%SIF 3 Transilvania 5.1% 4.6% 8.4% 4.3% 19.4% 15.5% 20.0% 9.8% 1.0% 1.2% 1.3% 1.7%SIF 4 Muntenia 5.0% 5.0% 5.7% 5.0% 5.4% 5.5% 6.3% 5.5% 1.4% 1.3% 1.7% 1.6%SIF 5 Oltenia 4.5% 4.5% 13.5% 5.1% 19.3% 16.8% 33.9% 12.4% 0.8% 1.1% 1.0% 1.4%Median SIF 5.0% 5.0% 8.8% 5.0% 19.3% 16.8% 24.6% 12.1% 1.0% 1.2% 1.3% 1.6%

Growth

NAV (RONmn)**

Net profit / NAV ROE Expense ratio

NAV/share (RON)** Discount/NAV**

Revenues from disposal of assets Revenues from dividends Net profitGrowth Growth

Source: Company data, Erste Group Research

* adjusted NAV per share: fair NAV based on sum-of-the-parts, with discount applied (46%)

** NAV as reported, calculated by official methodology

Sector Insight Technology


– ComArch: 2Q11 far below expectations, but stable outlook – Sygnity: Results as expected, further improvement announced – Asseco Poland: Results as expected, share buyback coming – KTC beat 1Q11/12 expectations – Buy confirmed

Asseco Poland 2Q11: Stable business development, as expected. The posted set of figures was in line with the consensus and a notch below our expectations. While revenues were boosted by the acquisition of Formula System (December 2010), profitability fell, on lower EBIT contributions from the new entity. Net profit fell y/y, on last year’s positive one-off (release of a tax asset).

At its analyst presentation, Asseco revealed that it does not plan any large acquisitions for the immediate future; it has postponed this issue at least to the coming year. The expansion to Russia that mentioned some time ago has been postponed, without providing a distinct schedule. Instead, Asseco has entered into a pre-partnership agreement with another large IT company. No acquisition or merger is planned related to this entity, just a partnership agreement to exploit cross-selling synergies. After about two years, the partnership shall be evaluated. No information about this partner has been given yet.

If agreed at the EGM on Sept. 6, Asseco will spend up to PLN 600mn on a share buyback in the coming five years (or about PLN 120mn p.a.). Legal restrictions are the following: No more than 25% of daily turnover can be related to the buyback; the share price of the bought shares is not to exceed 110% of the average sales price of the preceding three trading days. Asseco is entitled to buy back up to 33% of shares. At the current share price level, 33% of shares represent about PLN 1bn; differently stated, Asseco’s budget of PLN 600mn could buy about 20% of the current number of shares outstanding. If agreed at the AGM, the upcoming share buyback could be the most interesting issue for investors. When taking the current average 3M turnover, Asseco could buy back shares until YE11 with its annual budget of PLN 120mn. Also, for the coming years, the dedicated buyback budget would not only be good support for the stock price from a technical point of view, but would also further improve Asseco’s multiples.

Negative fundamental aspects going forward are the high level of goodwill on the balance sheet as well as the lack of organic growth and synergies from acquisitions. Total goodwill amounts to 56% of total assets and 72% of total equity. Even though these ratios also reflect the goodwill resulting from the merger, which is about half of the total goodwill, Asseco’s balance sheet quality is seen as a burden, especially in these shaky times. Asseco might impair some of its GW, although we do not expect it to be significant. Asseco currently has GW of PLN 4.6bn on the balance sheet; about PLN 2.2bn is related to already merged entities. Asseco’s total equity amounts to PLN 6.4bn.

In the short term, we expect the share price to rebound, especially if the EGM approves the buyback. For the medium term, Asseco will need to show some improvements related to organic growth (based on EPS) and start cleaning up its balance sheet. In our upcoming update, we expect to arrive at a lower target price and will have a thorough look at those factors that burden Asseco’s share price.

ComArch: Disappointing 2Q11 figures. The posted result was clearly below our and market expectations. Starting from lower than expected revenue, the gross margin was only 8.3%, after 15.7% in 1Q11 and 22% a year ago. Sales costs increased as well, both sequentially and y/y. Looking at the revenue breakdown, it was mainly Poland and the German business falling short of expectations. The cost base was burdened by the increase of the company’s staff level by 200 in order to cope with the increased order intake, as well as higher costs related to product development.

ComArch’s CFO mentioned that 2H11 should bring improved revenues and profitability. The company’s order backlog stood at PLN 561.1mn at the end of August, up 4.2% y/y. The share of proprietary software and services amounts to 85.6%; in absolute terms, this means +6.4% y/y. Based on the set of results, we confirm our Hold recommendation for the moment. Our target price is under review.

Sygnity: Results delivered as promised and above our expectations. The posted results further improve the trustworthiness of Sygnity’s management, as the company reached its second sequential operating quarterly profit



in 2Q11. The bottom line was positive as well and helped to post a tiny profit for 1H11. Despite a sequential decline of the gross margin (15.4% vs. 20.4%), Sygnity’s cost base has been reduced further.

Together with the posted result, Sygnity said it expects a gross margin of around 18% in 3Q11 (the same level as seen in 1H11), as well as a positive FY11 result. The guidance for 2012 was reiterated (revenues: PLN 650-700mn; EBIT margin of 5-7%). Based on the posted operational improvement, Sygnity aims to issue a bond of around PLN 100mn, which is to be used for an acquisition (PLN 30-50mn) to enter a new market segment, refinancing of maturing issues (PLN 33mn), investments in new products in the utilities segment (PLN 20-25mn) and PLN 7-10mn for product development in other segments. For the moment, we confirm our Hold recommendation, while our target price is under review.

KTC: Strong results beat expectations. While revenues beat our estimates by 8.4%, the strong operating profitability came as a major positive surprise to us (16.5%, vs. 12% expected). This development stems from attractive margins from OBU sales and PL implementation revenues. Overall, KTC sold 2.77mn On-Board-Units (OBUs) for the quarter (+2mn y/y; 51% of FY10/11). The Czech ETC operation revenues have improved by about 40% y/y. KTC will have set up the remaining gantries in Poland as stated in the contract by the end of August. Potential penalty payments were provisioned at cost already in 1Q11. As KTC expects to only be charged for the delay of two days for going live, we would assume that EUR 500k was reflected at cost. The remaining implementation revenues of about EUR 160mn are expected to be reflected in the coming two quarterly results (90% & 10%, respectively). KTC does not expect further extensions to be added to the highway network in the current fiscal year. Hence, we will need to shift some of our extension related revenues to the following years.

After long discussions, Sanral (the South African highway authority) has agreed on an ETC pricing scheme with the Parliament. Consequently, KTC plans to start with the 3-month pre-operation phase (trial phase) on Sept. 15. The system should then go live on Dec. 15. In our model, we will need to shift the operation start by two months. Further adjustments in our model have to be made regarding depreciation & minority interest with a net increase of about PLN 4.5mn. The level of the posted depreciation and minority interest can be used as run rates for the coming quarters. After selling 2.77mn OBUs in 1Q11/12, the quarterly run rate can be assumed at 2.5-3mn, which provides us with some upside to our current estimate.

Apart from the running tenders in Russia & Slovenia, we would expect Hungary and Denmark to open nationwide ETC tenders in the foreseeable future. An ETC system extension is also in discussion in the Czech Republic. The posted result shows that KTC is well on track for further growth. Consequently, we stick to our Buy recommendation.




Asseco Poland PLN 753.9 9.9% 9.5% 8.6% 8.3% 21.8% 21.8% 21.8% 21.8% -13.5% -22.7% -18.6% -27.0%AT&S EUR 237.4 -16.2% 16.1% 14.9% 14.4% 9.2% 19.7% 20.3% 20.8% -16.4% -32.2% -36.5% -1.2%austriamicrosystems EUR 432.8 12.7% 17.0% 18.1% 16.5% 23.9% 27.7% 28.3% 27.1% -17.0% -10.2% -9.7% 33.9%ComArch PLN 106.6 8.9% 9.6% 9.3% 9.2% 9.7% 9.9% 10.0% 10.1% -18.5% -40.5% -43.2% -33.0%Ericsson Nikola Tesla HRK 217.5 11.8% 12.8% 13.1% 12.5% 12.9% 13.2% 13.3% 12.9% -7.6% -16.5% -23.8% -9.5%Kapsch TrafficCom EUR 679.5 13.0% 29.4% 23.9% 22.1% 15.8% 18.4% 23.7% 23.5% -6.8% -13.1% -14.0% 60.9%Sygnity PLN 45.8 0.4% 1.8% 5.1% 6.0% 4.4% 4.5% 4.6% 4.6% -28.2% -40.0% -13.3% 7.2%Median - - 10% 13% 13% 12% 13% 18% 20% 21% - - - -TecDAX Technology - 26,366 9.7% 9.3% 10.3% 11.3% 13.4% 15.5% 15.8% 16.0% - - - -EuroStoxx Technology 128,951 19.2% 18.5% 17.3% 16.8% 16.8% 16.4% 17.9% 18.7% -5.3% -11.9% -17.2% -17.0%

Total Peer Group 155,317 14.5% 13.9% 13.8% 14.1% 15.1% 15.9% 16.8% 17.4%CEE to Peer, Prem/Disc - -32% -8% -5% -11% -15% 15% 21% 20% - - - -


2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAsseco Poland 7.6 7.4 7.9 7.7 5.9 5.8 6.2 6.1 0.7 0.7 0.7 0.6AT&S nm 10.5 6.6 6.0 7.8 4.4 2.7 2.3 0.9 1.6 0.9 0.8austriamicrosystems 15.8 8.7 6.6 6.4 7.7 5.4 4.8 4.5 1.9 1.3 1.1 1.0ComArch 8.6 7.5 7.2 6.6 5.4 4.9 4.8 4.9 0.7 0.7 0.6 0.6Ericsson Nikola Tesla 10.9 9.8 9.2 9.2 7.9 7.7 7.6 7.6 1.3 1.2 1.2 1.1Kapsch TrafficCom 34.6 11.6 11.8 10.9 14.7 19.1 8.1 8.8 4.3 3.0 2.6 2.2Sygnity 152.4 34.9 12.2 9.8 5.6 5.5 4.5 4.8 0.6 0.6 0.6 0.6Median CEE 13.3 9.8 7.9 7.7 7.7 5.5 4.8 4.9 0.9 1.2 0.9 0.8TecDAX Technology 15.7 14.0 12.8 11.1 11.0 9.4 7.9 7.1 1.5 1.5 1.5 1.3EuroStoxx Technology 13.4 12.9 11.1 10.3 9.5 8.6 8.0 7.4 2.9 2.5 2.2 1.9Total Peer Group 14.5 13.5 11.9 10.7 10.3 9.0 8.0 7.3 2.2 2.0 1.8 1.6CEE to Peer, Prem/Disc -8% -27% -34% -28% -25% -39% -39% -32% -59% -38% -50% -49%

2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAsseco Poland 1.0 0.8 0.8 0.7 4.4 3.9 3.6 3.1AT&S 0.9 1.2 0.9 0.9 10.3 6.0 4.6 4.5austriamicrosystems 1.8 1.9 1.3 1.1 7.6 6.8 4.8 4.1ComArch 0.4 0.3 0.2 0.1 3.7 2.9 2.2 1.4Ericsson Nikola Tesla 0.7 0.7 0.6 0.6 5.6 5.1 4.7 4.5Kapsch TrafficCom 2.1 1.1 1.4 1.2 13.5 6.1 5.8 5.2Sygnity 0.3 0.3 0.2 0.2 6.6 5.9 4.9 3.9Median CEE 0.9 0.8 0.8 0.7 6.6 5.9 4.7 4.1TecDAX Technology 1.1 1.1 1.0 0.8 8.5 7.6 5.8 4.8EuroStoxx Technology 1.2 1.1 1.1 1.0 7.6 6.1 6.5 5.3Total Peer Group 1.1 1.1 1.0 0.9 8.1 6.9 6.1 5.0CEE to Peer, Prem/Disc -15% -24% -23% -25% -18% -15% -23% -19%

P/CE P/BV

EV/Sales EV/EBITDA

P/E




Asseco Poland Buy Target price PLN 72.8Price (PLN) 43 ROCE 2010 10.7% 10e 11e 12e 13eMcap (PLN mn) 3,132 ROE 2010 9.9% Sales (PLN mn) 3,224.6 3,339.3 3,407.0 3,476.1Mcap (EUR mn) 754 Net debt (EURmn, 10) -97.5 EBITDA margin 21.80% 21.80% 21.80% 21.80%Free f loat (%) 55.0% Gearing (2010) -8% EBIT margin 18.53% 18.69% 18.80% 18.90%Free f loat (EUR mn) 415 Sales CAGR 10-13e 3.3% Net profit margin 14.89% 14.81% 14.44% 14.55%Shares outst. (mn) 73.1 EPS CAGR 10-13e 0.9% EPS (PLN) 5.43 5.53 5.45 5.58


Performance 1M 3M 6M 12MAbsolute (PLN terms) -10.1% -18.9% -14.9% -23.5%Rel. to sector (EUR, ppt) -2.4 -3.1 1.7 -28.1Rel. to universe (EUR, ppt) -3.6 -7.9 -7.4 -20.7

AT&S Buy Target price EUR 19.0Price (EUR) 10.2 ROCE 2010 -5.9% 10 11e 12e 13e

ROE 2010 -16.2% Sales (EUR mn) 372.2 487.9 545.0 593.2Mcap (EUR mn) 237 Net debt (EURmn, 10) 159.3 EBITDA margin 9.23% 19.66% 20.32% 20.82%Free f loat (%) 50.9% Gearing (2010) 76% EBIT margin -6.87% 9.54% 9.80% 10.10%Free f loat (EUR mn) 121 Sales CAGR 10-13e 7.2% Net profit margin -10.11% 7.18% 6.63% 6.64%Shares outst. (mn) 23 EPS CAGR 10-13e - EPS (EUR) -1.60 1.51 1.55 1.68

Dividend/share (EUR) 0.10 0.35 0.40 0.44EV/sales 0.95 1.18 0.93 0.95EV/EBITDA 10.26 6.00 4.56 4.55P/E nm 10.50 6.56 6.05P/CE 7.85 4.39 2.68 2.28P/BV 0.92 1.61 0.92 0.83Dividend yield 1.21% 2.21% 3.94% 4.33%EV/EBITDA rel. 1.5 1.0 1.0 1.1P/E rel. - 1.1 0.8 0.8

Performance 1M 3M 6M 12MAbsolute (EUR terms) -16.4% -32.2% -36.5% -1.2%Rel. to sector (EUR, ppt) -5.3 -12.5 -16.1 -2.3Rel. to universe (EUR, ppt) -6.5 -17.3 -25.3 5.1

austriamicrosystems Buy Target price EUR 56.8Price (EUR) 38 ROCE 2010 11.6% 10 11e 12e 13e

ROE 2010 12.7% Sales (EUR mn) 209 264 330 343Mcap (EUR mn) 433 Net debt (EURmn, 10) 16 EBITDA margin 23.86% 27.70% 28.27% 27.10%Free f loat (%) 76.1% Gearing (2010) 8% EBIT margin 12.93% 18.82% 22.15% 21.55%Free f loat (EUR mn) 329 Sales CAGR 10-13e 25.7% Net profit margin 11.03% 16.82% 19.80% 19.82%Shares outst. (mn) 12.9 EPS CAGR 10-13e EPS (EUR) 2.27 3.85 5.06 5.27


Performance 1M 3M 6M 12MAbsolute (EUR terms) -15.1% -16.1% -20.4% 16.5%Rel. to sector (EUR, ppt) -5.9 9.5 10.7 32.8Rel. to universe (EUR, ppt) -7.1 4.7 1.5 40.1

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ComArch Hold Target price PLN 100.2Price (PLN) 55.0 ROCE 2010 9.5% 10e 11e 12e 13eMcap (PLN mn) 443 ROE 2010 8.9% Sales (PLN mn) 846.2 905.9 931.8 958.4Mcap (EUR mn) 107 Net debt (EURmn, 10) -35 EBITDA margin 9.66% 9.88% 10.03% 10.08%Free f loat (%) 23.4% Gearing (2010) -23% EBIT margin 6.26% 6.67% 6.94% 7.11%Free f loat (EUR mn) 25 Sales CAGR 10-13e 7.1% Net profit margin 5.80% 6.21% 6.58% 6.89%Shares outst. (mn) 8.1 EPS CAGR 10-13e 19.5% EPS (PLN) 6.15 7.05 7.68 8.28



Ericsson Nikola Tesla Hold Target price HRK 1549.9Price (HRK) 1,234.1 ROCE 2010 18.0% 10e 11e 12e 13eMcap (HRK mn) 1,628 ROE 2010 11.8% Sales (HRK mn) 1,438.1 1,480.2 1,515.2 1,525.3Mcap (EUR mn) 217 Net debt (EURmn, 10) -72 EBITDA margin 12.88% 13.17% 13.30% 12.91%Free f loat (%) 42.2% Gearing (2010) -43% EBIT margin 9.06% 10.19% 10.82% 10.61%Free f loat (EUR mn) 92 Sales CAGR 10-13e 2.2% Net profit margin 9.94% 10.88% 11.49% 11.45%Shares outst. (mn) 1.3 EPS CAGR 10-13e 8.2% EPS (HRK) 109.99 123.94 134.00 134.39


Performance 1M 3M 6M 12MAbsolute (HRK terms) -6.9% -15.9% -23.2% -6.9%Rel. to sector (EUR, ppt) 3.6 3.2 -3.4 -10.7Rel. to universe (EUR, ppt) 2.3 -1.6 -12.6 -3.3

Kapsch TrafficCom Buy Target price EUR 84.0Price (EUR) 55.7 ROCE 2010 14.6% 10e 11e 12e 13eMcap (EUR mn) 680 ROE 2010 13.0% Sales (EUR mn) 389 588 442 463Mcap (EUR mn) 680 Net debt (EURmn, 10) 63 EBITDA margin 15.78% 18.39% 23.73% 23.49%Free f loat (%) 30.3% Gearing (2010) 33% EBIT margin 12.34% 15.19% 19.86% 20.07%Free f loat (EUR mn) 206 Sales CAGR 10-13e 21% Net profit margin 7.18% 11.12% 14.96% 15.40%Shares outst. (mn) 12.2 EPS CAGR 10-13e 18.0% EPS (EUR) 1.81 4.82 4.73 5.12


Performance 1M 3M 6M 12MAbsolute (EUR terms) -6.8% -13.1% -14.0% 60.9%Rel. to sector (EUR, ppt) 4.3 6.6 6.4 59.7Rel. to universe (EUR, ppt) 3.1 1.7 -2.7 67.1

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ComArch W IG (Rebased) DJ EURO STOXX Technology (Rebased)



Sygnity Hold Target price PLN u.r.Price (PLN) 16.0 ROCE 2010 1.3% 10e 11e 12e 13eMcap (PLN mn) 190 ROE 2010 0.4% Sales (PLN mn) 702 732 753 774Mcap (EUR mn) 46 Net debt (EURmn, 10) 5 EBITDA margin 4.42% 4.47% 4.64% 4.60%Free f loat (%) 56.6% Gearing (2010) 7% EBIT margin 0.70% 1.11% 2.55% 3.03%Free f loat (EUR mn) 26 Sales CAGR 10-13e 8% Net profit margin 0.17% 0.73% 2.12% 2.55%Shares outst. (mn) 11.9 EPS CAGR 10-13e #ZAHL! EPS (PLN) 0.10 0.44 1.32 1.63


Performance 1M 3M 6M 12MAbsolute (PLN terms) -25.4% -37.0% -9.3% 12.3%Rel. to sector (EUR, ppt) -17.1 -20.3 7.0 6.1Rel. to universe (EUR, ppt) -18.3 -25.1 -2.1 13.4

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Sygnity WIG (Rebased) DJ EURO STOXX Technology (Rebased)

Sector Insight Telecom


– Telekom Austria downgraded to Sell – Turkcell EGM fails to approve 2010 dividend – Hungarian government starts 900 MHz frequency auction – Telekom Slovenije 2Q11 results above estimates – S&P downgraded Telefónica CR to BBB+, outlook stable

Telekom Austria. We downgrade Telekom Austria from Hold to Sell, while reducing our target price from EUR 11 to EUR 5.5. The significant reduction in target price was due to lower estimates for velcom in Belarus, after the ruble devaluation, as well as for Mobiltel in Bulgaria, considering the lower MTR, challenging macroeconomic situation and competition-driven price pressure. Furthermore, we include a higher discount factor, mainly using a higher beta and debt premium assumption. The higher beta is used to reflect the very weak equity ratio. Meanwhile, the higher debt premium is used to reflect the considerable leverage ratio of Telekom Austria.

Telekom Austria exhibits a poor-quality balance sheet, as it has the weakest equity to asset ratio at 10.7% and the highest net debt/equity ratio (at 4.7x) among its peers in 2Q11. Its high dividend (225% average payout ratio in 2007-2011e), restructuring costs in Austria (EUR 1.2bn in 2000, 2008, 2010 and 2011) and the negative impact of the two Belarusian ruble devaluations (EUR 964mn of goodwill impairment and negative FX translation adjustments in 2009 and 2011) have reduced equity massively, from above EUR 2.5bn in 2007 to a mere EUR 755mn in 2Q11. The amount of goodwill at EUR 1.4bn is now almost double that of equity in 2Q11. The amount of restructuring provision at EUR 907.4mn is now 20% higher than the shareholders' equity in 2Q11. Furthermore, its minimum dividend policy of EUR 0.76/share for 2011 and 2012 should reduce equity further, as it is higher than estimated earnings. We think that the current equity level is not strong enough to weather the volatility of the business. Potential goodwill impairments or further restructuring costs might drag equity to a critical level. We are now at the point where we can imagine a lower dividend or even a capital increase.

Turkcell. The shareholders’ assembly on August 11, 2011, did not approve the 2010 accounts and dividends, which is negative for minority shareholders. Turkcell subsidiary Superonline made a small acquisition, buying Global Ileti�im Hizmetleri A.S. The enterprise value is determined as TRY 17,500,000. Turkcell Superonline aims to improve its cloud computing capability and data center services through the acquisition of the shares of Global Iletisim, owning three world-class data centers.

Magyar Telekom. The Hungarian government has started an auction for the 900 MHz mobile frequency (for 15 years). The frequency can be used to provide GSM, 3G and 4G services. Applications are expected by October 20 and the conclusion of the auction is expected on December 12, 2011.

Telefónica O2 Czech Republic. S&P downgraded Telefónica O2 CR from A- to BBB+. The outlook is stable. The downgrade followed a downgrade to the parent company Telefónica SA.

Telekom Slovenije. The 2Q11 results were above our estimates, from the top line to the bottom line. The domestic revenue decline was smaller than expected. Meanwhile, revenues in Kosovo and Macedonia surprisingly grew in 2Q11, after both posted falling revenues in 1Q11. Group OPEX fell 2.4% y/y, mainly due to lower staff costs. EBITDA fell 1.5% y/y, with Mobitel posting the highest EBITDA decline at 7.5% y/y (worse than 1Q11 at +4.4% y/y). EBITDA of Telekom Slovenije d.d. surprisingly declined 1% y/y, after growing strongly in 1Q11 (+20% y/y). Ipko in Kosovo posted a strong EBITDA margin of 42.5%, much better than in the past quarters. Lower depreciations, net financial expenses and taxes led to 116% y/y growth of net profit to EUR 10.7mn. Overall, the 2Q11 results were better than expected and certainly better than last year’s, but they were not as strong as the 1Q11 results, due to the falling EBITDA of the domestic operations.

The net profit outlook for 2011 was confirmed at EUR 28.1mn, although 1H net profit already reached EUR 25.1mn. The 1H profit already topped our FY11 estimate at EUR 24.9mn. We will therefore upgrade our estimate. The merger between Telekom Slovenije and Mobitel was completed on July 1, 2011. The merger should generate direct financial effects of approx. EUR 140mn by 2015, through higher sales and lower costs. In the past two quarters, Telekom Slovenije showed that its turnaround was well on the way.




Magyar Telekom HUF 1,937.5 12.0% 6.6% 9.7% 12.9% 34.9% 34.4% 34.6% 37.3% -6.3% -8.8% -8.0% -22.9%T-Hrvatski Telekom HRK 2,756.5 15.9% 16.4% 17.1% 17.4% 43.7% 43.4% 43.4% 43.4% -0.9% -2.3% -12.7% -4.6%Telefónica CR CZK 5,661.2 17.0% 11.7% 13.3% 15.3% 49.2% 42.0% 42.5% 42.5% -0.9% 4.2% 7.3% -0.9%Telekom Austria EUR 3,417.0 12.7% 1.4% 26.9% 38.2% 32.3% 27.8% 32.5% 32.6% -8.3% -14.0% -25.0% -24.6%Telekom Slovenije EUR 458.3 -22.7% 3.1% 3.9% 4.7% 4.3% 31.7% 31.8% 31.8% -4.7% -8.4% -15.1% -22.5%TPSA PLN 5,488.9 0.7% 13.6% 7.1% 8.3% 30.0% 43.9% 36.0% 36.1% -5.0% -10.4% -2.3% -5.3%Turk Telekomunikasyon ASTRY 11,147.7 44.5% 41.1% 42.9% 43.2% 44.5% 44.0% 43.9% 43.5% 5.4% -0.7% -0.9% 0.4%Turkcell Iletisim Hizmetleri ATRY 6,810.5 20.3% 17.8% 18.5% 18.8% 32.5% 32.8% 32.8% 32.5% -12.9% -20.5% -20.9% -38.1%Median - - 12% 9% 12% 14% 34% 38% 35% 37% - - - -Rostelecom USD 4,002 14.2% 14.4% 14.2% 13.3% 37.9% 38.0% 39.1% 40.3% 24.0% 22.6% 29.6% 102.9%TeliaSonera AB SEK - 23,010 16.8% 15.8% 16.0% 15.7% 35.3% 35.1% 35.6% 36.1% 11.1% -3.0% -11.3% -5.8%Telenor ASA NOK 19,178 12.0% 13.6% 15.2% 16.3% 30.2% 30.5% 31.9% 33.4% 7.4% 1.0% 5.3% -0.1%Koninklijke KPN N.V. EUR 15,163 51.6% 57.8% 55.9% 55.5% 40.9% 39.8% 39.7% 39.4% 1.0% -7.6% -12.5% -9.0%Portugal Telecom SGPS S/ EUR 5,440 8.8% - - - 38.8% 36.2% 35.4% 35.8% -8.7% -20.2% -21.4% -14.4%Swisscom AG CHF - 17,261 29.0% - - - 38.3% 39.4% 39.5% 39.4% 5.9% 9.1% 2.1% 17.2%Median Total - 84,541 15.9% 15.0% 15.2% 15.7% 38.3% 37.1% 38.9% 37.9% - - - -EuroStoxx Telecommunications

212,289 20.7% 20.6% 23.5% 22.6% 35% 34% 34% 34% -9.3% -17.2% -17.1% -9.1%

CEE to Peer, Prem/Disc - -23% -39% -24% -11% -12% 3% -9% -3% - - - -


2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eMagyar Telekom 8.3 15.8 11.1 8.6 3.3 3.6 3.6 3.3 1.0 1.1 1.1 1.1T-Hrvatski Telekom 12.8 11.3 10.9 10.6 7.5 6.5 6.5 6.4 2.1 1.9 1.9 1.8Telefónica CR 10.1 16.9 15.3 13.7 5.0 6.9 6.7 6.5 1.7 2.0 2.1 2.1Telekom Austria 23.8 nm 16.7 13.8 3.4 2.7 3.2 3.1 3.2 4.1 4.9 5.7Telekom Slovenije nm 18.4 14.3 11.8 n.m. 2.1 2.1 2.1 0.7 0.6 0.6 0.5TPSA nm 11.2 22.9 21.0 4.5 3.9 4.9 4.9 1.5 1.6 1.7 1.8Turk Telekomunikasyon AS 9.0 9.6 9.4 8.7 5.5 5.9 6.0 5.8 3.7 4.2 3.9 3.6Turkcell Iletisim Hizmetleri AS 12.7 8.7 8.7 8.1 7.5 5.2 5.4 5.2 2.4 1.7 1.6 1.5Median CEE 11.4 15.8 14.8 12.8 4.5 3.7 4.3 4.1 1.6 1.7 1.8 1.8Rostelecom 18.2 16.3 15.1 13.7 7.1 6.3 5.7 5.3 2.6 2.3 2.1 1.8TeliaSonera AB 10.2 10.8 9.9 9.4 7.7 7.3 6.8 6.6 1.7 1.7 1.6 1.5Telenor ASA 14.2 11.7 9.8 8.3 5.9 5.7 5.3 4.8 1.7 1.6 1.5 1.4Koninklijke KPN N.V. 8.6 8.0 7.8 7.5 4.1 3.8 3.6 3.6 4.4 4.6 4.4 4.1Portugal Telecom SGPS S/A 14.8 9.5 10.1 8.8 5.2 3.1 3.1 3.0 1.3 1.4 1.4 1.3Swisscom AG 11.9 10.5 10.1 9.8 5.7 5.1 5.0 5.0 3.4 2.8 2.5 2.3Median Total 11.9 10.8 10.1 9.4 5.7 5.7 5.3 5.0 1.7 1.7 1.6 1.6EuroStoxx Telecommunications

11.0 10.0 10.1 8.8 4.1 3.2 3.4 3.5 2.6 2.4 2.4 2.4

CEE to Peer, Prem/Disc -4% 47% 47% 35% -21% -34% -20% -17% -7% 1% 9% 14%

2010 2011e 2012e 2013e 2010 2011e 2012e 2013eMagyar Telekom 1.5 1.5 1.5 1.5 4.2 4.4 4.5 4.1T-Hrvatski Telekom 2.4 2.1 2.1 2.0 5.5 4.8 4.7 4.7Telefónica CR 2.2 2.5 2.5 2.3 4.5 6.0 5.8 5.4Telekom Austria 1.7 1.5 1.5 1.5 5.3 5.4 4.7 4.6Telekom Slovenije 1.3 1.2 1.1 1.0 30.6 3.6 3.3 3.0TPSA 1.7 1.7 1.8 1.7 5.6 3.8 5.0 4.8Turk Telekomunikasyon AS 2.4 2.5 2.5 2.4 5.4 5.7 5.8 5.5Turkcell Iletisim Hizmetleri AS 2.3 1.5 1.6 1.5 7.0 4.7 4.8 4.6Median CEE 1.7 1.6 1.7 1.6 5.4 4.6 4.7 4.6Rostelecom 0.9 1.0 0.8 0.7 2.4 2.5 2.2 1.7TeliaSonera AB 2.7 2.6 2.5 2.4 7.6 7.3 6.9 6.6Telenor ASA 1.8 1.7 1.6 1.5 6.1 5.5 4.9 4.4Koninklijke KPN N.V. 2.2 2.1 2.0 2.0 5.3 5.2 5.1 5.1Portugal Telecom SGPS S/A 2.5 1.9 1.6 1.6 6.5 5.2 4.7 4.4Swisscom AG 2.5 2.4 2.3 2.3 6.6 6.0 5.9 5.7Median Total 2.2 2.0 1.9 1.8 6.1 5.2 4.9 4.8EuroStoxx Telecommunications

1.8 1.6 1.5 1.6 5.1 5.0 4.7 5.1


P/CE P/BV

EV/Sales EV/EBITDA

P/E




Magyar Telekom Accumulate Target price HUF 640.0Price (HUF) 510 ROCE 2010 11.0% 10 11e 12e 13eMcap (HUF mn) 530,564 ROE 2010 12.0% Sales (HUF mn) 609,579.0 591,585.1 588,381.0 592,027.0Mcap (EUR mn) 1,938 Net debt (EURmn, 10) 1,084.0 EBITDA margin 34.94% 34.35% 34.62% 37.29%Free f loat (%) 40.7% Gearing (2010) 51% EBIT margin 18.39% 17.61% 17.90% 20.87%Free f loat (EUR mn) 788 Sales CAGR 10-13e -2.1% Net profit margin 12.69% 7.80% 10.40% 12.78%Shares outst. (mn) 1,040.3 EPS CAGR 10-13e -5.6% EPS (HUF) 61.76 31.67 45.76 59.22


Performance 1M 3M 6M 12MAbsolute (HUF terms) -4.7% -6.1% -7.6% -25.8%Rel. to sector (EUR, ppt) -4.9 -5.0 -4.7 -18.8Rel. to universe (EUR, ppt) 3.6 6.1 3.2 -16.7

T-Hrvatski Telekom Hold Target price HRK 290.0Price (HRK) 252.0 ROCE 2010 23.0% 10 11e 12e 13eMcap (HRK mn) 20,636 ROE 2010 15.9% Sales (HRK mn) 8,374.6 8,051.3 8,109.0 8,134.6Mcap (EUR mn) 2,756 Net debt (EURmn, 10) -460.3 EBITDA margin 43.73% 43.43% 43.38% 43.37%Free f loat (%) 38.5% Gearing (2010) -31% EBIT margin 26.83% 27.01% 27.45% 27.56%Free f loat (EUR mn) 1,061 Sales CAGR 10-13e -1.1% Net profit margin 21.74% 22.39% 23.26% 23.87%Shares outst. (mn) 82 EPS CAGR 10-13e -1.2% EPS (HRK) 22.24 22.01 23.03 23.71


Performance 1M 3M 6M 12MAbsolute (HRK terms) -0.1% -1.6% -11.9% -1.9%Rel. to sector (EUR, ppt) 0.5 1.5 -9.3 -0.4Rel. to universe (EUR, ppt) 9.0 12.6 -1.5 1.6

Telefónica CR Hold Target price CZK 450Price (CZK) 425 ROCE 2010 16.4% 10 11e 12e 13eMcap (CZK mn) 136,888 ROE 2010 17.0% Sales (CZK mn) 55,655 53,021 53,263 54,926Mcap (EUR mn) 5,661 Net debt (EURmn, 10) -68.7 EBITDA margin 49.20% 42.03% 42.49% 42.49%Free f loat (%) 30.6% Gearing (2010) -2.4% EBIT margin 27.89% 19.47% 20.92% 22.43%Free f loat (EUR mn) 1,732 Sales CAGR 10-13e -2.1% Net profit margin 22.07% 15.37% 16.78% 18.18%Shares outst. (mn) 322.1 EPS CAGR 10-13e -3.8% EPS (CZK) 38.13 25.30 27.75 31.00


Performance 1M 3M 6M 12MAbsolute (CZK terms) -0.9% 2.7% 6.5% -3.0%Rel. to sector (EUR, ppt) 0.4 7.9 10.7 3.3Rel. to universe (EUR, ppt) 9.0 19.0 18.5 5.4

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Telefónica CRPX (Rebased)DJ EURO STOXX Telecommunications (Rebased)



Telekom Austria Sell Target price EUR 5.5Price (EUR) 7.7 ROCE 2010 5.4% 10 11e 12e 13e

ROE 2010 12.7% Sales (EUR mn) 4,650.8 4,467.4 4,418.0 4,424.0Mcap (EUR mn) 3,417 Net debt (EURmn, 10) 3,377 EBITDA margin 32.33% 27.85% 32.53% 32.58%Free float (%) 72.6% Gearing (2010) 229% EBIT margin 9.42% 5.01% 10.54% 11.70%Free float (EUR mn) 2,482 Sales CAGR 10-13e -2.0% Net profit margin 4.20% 0.37% 4.62% 5.60%Shares outst. (mn) 442.6 EPS CAGR 10-13e - EPS (EUR) 0.44 0.04 0.46 0.56

Dividend/share (EUR) 0.75 0.76 0.76 0.76EV/sales 1.73 1.51 1.52 1.50EV/EBITDA 5.35 5.43 4.66 4.62P/E 23.83 nm 16.75 13.79P/CE 3.44 2.72 3.19 3.07P/BV 3.16 4.14 4.93 5.65Dividend yield 7.13% 9.84% 9.84% 9.84%EV/EBITDA rel. 1.0 1.2 1.0 1.0P/E rel. 2.1 - 1.1 1.1

Performance 1M 3M 6M 12MAbsolute (EUR terms) -26.8% -37.5% -41.7% -41.7%Rel. to sector (EUR, ppt) -7.0 -10.2 -21.7 -20.5Rel. to universe (EUR, ppt) 1.6 0.9 -13.8 -18.4

Telekom Slovenije Accumulate Target price EUR 85.0Price (EUR) 70.5 ROCE 2010 -12.2% 10 11e 12e 13e

ROE 2010 -22.7% Sales (EUR mn) 839.3 799.8 776.0 762.7Mcap (EUR mn) 458 Net debt (EURmn, 10) 541 EBITDA margin 4.29% 31.75% 31.80% 31.84%Free float (%) 25.4% Gearing (2010) 67% EBIT margin -21.26% 6.84% 7.69% 8.55%Free float (EUR mn) 116 Sales CAGR 10-13e -2.6% Net profit margin -25.06% 3.11% 4.13% 5.10%Shares outst. (mn) 6.5 EPS CAGR 10-13e 12.1% EPS (EUR) -32.33 3.83 4.93 5.97

Dividend/share (EUR) 3.00 3.00 3.00 3.00EV/sales 1.31 1.15 1.06 0.96EV/EBITDA 30.59 3.62 3.34 3.02P/E nm 18.41 14.31 11.80P/CE nm 2.07 2.10 2.12P/BV 0.69 0.56 0.56 0.54Dividend yield 3.49% 4.26% 4.26% 4.26%EV/EBITDA rel. 5.7 0.8 0.7 0.6P/E rel. - 1.2 1.0 0.9Performance 1M 3M 6M 12MAbsolute (EUR terms) -4.7% -8.4% -15.1% -22.5%Rel. to sector (EUR, ppt) -3.4 -4.7 -11.7 -18.3Rel. to universe (EUR, ppt) 5.2 6.4 -3.8 -16.3

TPSA Sell Target price PLN 16.0Price (PLN) 17.1 ROCE 2010 0.9% 10 11e 12e 13eMcap (PLN mn) 22,806 ROE 2010 0.7% Sales (PLN mn) 15,715 15,085 14,834 14,855Mcap (EUR mn) 5,489 Net debt (EURmn, 10) 1,149 EBITDA margin 29.98% 43.95% 36.03% 36.05%Free float (%) 50.2% Gearing (2010) 31% EBIT margin 5.78% 19.07% 11.15% 11.77%Free float (EUR mn) 2,756 Sales CAGR 10-13e -3% Net profit margin 0.69% 12.90% 6.71% 7.30%Shares outst. (mn) 1,336.0 EPS CAGR 10-13e -4.1% EPS (PLN) 0.08 1.46 0.74 0.81

Dividend/share (PLN) 1.50 1.50 1.50 1.50EV/sales 1.69 1.68 1.79 1.72EV/EBITDA 5.65 3.82 4.96 4.78P/E nm 11.24 22.92 21.04P/CE 4.50 3.86 4.88 4.86P/BV 1.49 1.57 1.68 1.81Dividend yield 9.11% 9.17% 8.79% 8.79%EV/EBITDA rel. 1.0 0.8 1.1 1.0P/E rel. - 0.7 1.5 1.6

Performance 1M 3M 6M 12MAbsolute (PLN terms) -1.3% -6.0% 2.2% -0.8%Rel. to sector (EUR, ppt) -3.6 -6.6 1.1 -1.1Rel. to universe (EUR, ppt) 4.9 4.5 8.9 1.0

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Telekom SlovenijeSBI TOP (Rebased)DJ EURO STOXX Telecommunications (Rebased)

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TPSAWIG 20 (Rebased)DJ EURO STOXX Telecommunications (Rebased)



Turk Telekomunikasyon ASBuy Target price TRY 10.2Price (TRY) 7.8 ROCE 2010 23.9% 10 11e 12e 13eMcap (TRY mn) 27,440 ROE 2010 44.5% Sales (TRY mn) 10,852.5 11,734.9 12,325.5 12,794.6Mcap (EUR mn) 11,148 Net debt (EURmn, 10) 2,032 EBITDA margin 44.55% 44.02% 43.92% 43.51%Free float (%) 12.5% Gearing (2010) 68% EBIT margin 30.51% 30.44% 31.08% 31.21%Free float (EUR mn) 1,393 Sales CAGR 10-13e 4.9% Net profit margin 21.46% 21.19% 22.87% 23.89%Shares outst. (mn) 3,500.0 EPS CAGR 10-13e 14.5% EPS (TRY) 0.70 0.75 0.84 0.90


Performance 1M 3M 6M 12MAbsolute (TRY terms) 8.3% 6.5% 9.5% 27.5%Rel. to sector (EUR, ppt) 6.7 3.0 2.4 4.6Rel. to universe (EUR, ppt) 15.3 14.2 10.3 6.7

Turkcell Iletisim Hizmetleri Reduce Target price TRY 8.5Price (TRY) 7.6 ROCE 2010 21.5% 10 11e 12e 13eMcap (TRY mn) 16,764 ROE 2010 20.3% Sales (TRY mn) 9,003.6 9,171.7 9,511.5 9,950.7Mcap (EUR mn) 6,811 Net debt (EURmn, 10) -1,003 EBITDA margin 32.50% 32.77% 32.84% 0.00%Free float (%) 33.5% Gearing (2010) -22% EBIT margin 19.36% 19.65% 20.35% 20.85%Free float (EUR mn) 2,280 Sales CAGR 10-13e 2.7% Net profit margin 18.96% 18.59% 19.43% 19.98%Shares outst. (mn) 2,200.0 EPS CAGR 10-13e 4.7% EPS (TRY) 0.81 0.80 0.87 0.94


Performance 1M 3M 6M 12MAbsolute (TRY terms) -10.6% -14.8% -12.6% -21.4%Rel. to sector (EUR, ppt) -9.2 -11.0 -9.3 -17.3Rel. to universe (EUR, ppt) -0.7 0.1 -1.4 -15.2

52 weeks

4,55,05,56,06,57,07,58,08,59,09,5

Turk Telekomunikasyo n ASISE 1 00 (Reba sed)DJ EURO STO XX Tele communicatio ns (R ebased)

52 weeks

7,07,58,08,59,09,5

10,010,511,011,5

Turkcell Iletisim Hizmetleri ASISE 100 (Rebased)DJ EURO STOXX Telecommunications (Rebased)

Sector Insight Travel & Tourism


– DO&CO terminated its bid for London Olympics – Fortuna 1H11 below market consensus, small acquisition in Poland – Danubius: Slow recovery and lower than expected profit in 2Q11

DO&CO’s results slightly below expectations. DO&CO announced its financial results for 1Q11/12, with profit of EUR 4.3mn, up 84% y/y. Net sales reached EUR 117mn, coupled with an EBITDA margin of 9.2%. The results were lower than our sales expectation of EUR 130mn and profit of EUR 5.9mn. Overall, the results showed improvement on a y/y basis and we think that the company will achieve its year-end target EBITDA margin of 11% going forward. The company held a conference call after the results and announced that they officially pulled out of the bid for the London Olympics catering tender, as the contract size did not turn out to be profitable. The company was expecting revenues of EUR 15-30mn from this contract. In airline catering, the company gained new contracts from Emirates in Malta, Jet Airways in London and Oman Air in Milan. DOCO also renewed existing contracts with Cathay Pacific and Turkish Airlines at JFK. A VIP lounge for Turkish Airlines was also opened during the quarter. Regarding future acquisitions, the company stated that the balance sheet would allow a price tag of EUR 400-500mn. CEO Attila Dogudan stated that an announcement regarding a local acquisition would be made in the very near future. He also ruled out any share buyback scenarios going forward. The company thinks that that there will be a decline in their initial year-end sales guidance of EUR 484mn, due to the depreciation of the TRY. The company expects sales of around EUR 470mn going forward, coupled with an EBITDA margin of 11%. The company plans to open three more Henry stores in the remainder of the year, with plans to extend the concept to London and Istanbul in 2012.

Air passengers continued to increase in July - PAX up 15.4%: International passengers increased 14.2% to reach 32mn, while domestic passengers were up 16.5%, reaching 33.5mn in the Jan-July period. PAX figures were up 13% at Istanbul Ataturk Airport, reaching 20mn, while Ankara Esenboga Airport reached 5mn passengers, up 15%.

Fortuna released its 1H11 figures, with the amount staked at EUR 209mn, up 9.1% y/y, gross win at EUR 47.9mn, up 19.4% y/y, EBITDA at EUR 11.9mn, up 2.4% y/y, and net profit at EUR 8.6mn, up 19.3% y/y. The amount staked and gross win surprised negatively, adding only 1.6% compared to 2Q10, while gross win was down 7.9%. Moreover, the revenue side was supported by the strengthening of local currencies, as the CZK strengthened 5.2% y/y in 1Q11 and the PLN added 1.1% y/y. Fortuna achieved a relatively weak EBITDA margin of 5.7%. Financials in 2Q were partly burdened by the staff cost relating to the Lottery project start-up (not more than EUR 1mn) on the EBITDA level and the high base in 2Q10 (FIFA World Cup). The Polish Parliament amended the gambling law to allow online sports betting for locally licensed players. The new regulations strengthen the Polish Customs Service’s authority in controlling illegal online gambling activities, including monitoring and suspension of money transfers. The new regulations came into force on July 14, 2011. Fortuna asked the Ministry of Finance for the license, which is expected to be approved within the next few months. Fortuna is in talks to buy 190 outlets in Poland from Tipsport, which would improve its market share by 4% (above 33%), while current market share is close to 30% (Fortuna operates 380 outlets in Poland). Total anticipated CAPEX will not exceed hundreds of thousands EUR and it will have no impact on the dividend policy. Fortuna reiterated its marketing budget for the lottery project at EUR 4-5mn by the end of 2011, while it could start in September 2011. The lottery project is expected to be in red figures on EBITDA level in 2011 (around EUR 4-5mn), while in 2012 company expects to break even.

The 2Q11 results were weak mainly due to high base in 2Q10. Moreover, the lottery project start-up has a negative impact on the figures (not more than EUR 1mn on EBITDA level). Fortuna expects the lottery project to post a loss in the range of EUR 4-5mn during 2011, while breakeven is expected in 2012. The acquisition of 190 Polish outlets will not have a significant impact on cash flow and Fortuna will be able to sustain a hefty dividend ability.

Danubius Hotels posted a HUF 924mn pre-tax profit in 2Q11 vs. a HUF 848mn loss in 2Q10. Profit last year was hit by the unrealized 1.5bn loss on FX loans, while the FX result was marginal this year, at HUF 33mn. Although revenue recovery was perfectly in line with our estimates, profit numbers missed our forecasts in 2Q, due to higher than expected operating costs and interest payment. Revenues went up 4.1% y/y, to HUF 10.82mn, while costs climbed by 1.9% vs. the same period last year. Group level occupancy increased significantly by 2.6pp y/y, to 66.2% in 2Q11. However, a further slump in average room rates partly offset this effect. The biggest gain was experienced in the Food & Beverage division, due to high inflation in food prices (which also affected costs). The operating profit of HUF 1.13bn missed our estimate of HUF 1.24bn. We see that Danubius is on good track



for recovery, but the process is still very slow, due to the further deterioration of room rates. Capacities in Budapest and other cities grew at a very fast pace, forcing hotels into fierce price competition. We therefore expect recovery to remain slow in the next years. We keep our FY2011 profit forecast of a small loss of HUF 59mn. The main shareholder, Sir Schreier, continued to slowly acquire the stock on the market but the delisting has still not come. We think that it might follow the recovery of the hotel sector and Danubius’ profitability.




AmRest PLN 341.4 7.4% 7.8% 10.7% 13.5% 8.7% 9.6% 10.9% 11.8% -5.6% -7.4% -3.3% 0.1%Danubius Hotels HUF 98.2 -2% -0.1% 0.9% 1.8% 11.3% 11.7% 12.9% 13.2% -7.0% -7.8% -13.2% -15.8%DO & CO EUR 272.8 14.8% 12.8% 13.0% 10.6% 10.8% 10.6% 10.7% 10.3% -15.1% -8.6% 4.2% 54.1%Fortuna Entertainment EUR 223.7 46.4% 33.4% 33.0% 35.3% 30.2% 22.0% 19.6% 21.2% -10.0% -17.6% 1.8% 0.0%Turkish Airlines TRY 1,165.1 7.2% 13.6% 20.5% 22.1% 11.7% 11.1% 13.1% 12.8% -25.4% -37.5% -38.4% -53.9%Vienna Int. Airport EUR 711.4 9.4% 9.8% 5.8% 5.2% 31.5% 32.9% 30.0% 31.4% -3.8% -16.3% -30.9% -26.8%Median - - 8% 11% 12% 12% 12% 11% 13% 13% - - - -EuroStoxx Travel & Tourism

32,838 12.3% 10.3% 10.9% 12.4% 12.5% 12.5% 13.1% 13.1% -11.9% -21.9% -27.0% -21.5%

CEE to Peer, Prem/Disc - -32% 9% 9% -2% -8% -9% -1% 0% - - - -


2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAmRest 30.3 23.6 16.1 11.3 8 .6 7.2 5.7 4 .6 1.9 1.8 1.6 1.4Danubius Hotels nm nm 62.4 29.8 10.5 5.6 5.4 4 .9 0.7 0.5 0.5 0.5DO & CO 19 15 14 15 8.8 6.5 6.8 7 .8 2.3 1.9 1.7 1.5Fortuna Entertainment 11 15 14 12 9.9 12.9 12.4 10.6 5.0 5.0 4.5 4.1Turkish Airlines 10 5 4 3 3.5 2.9 2.3 2 .1 0.7 0.8 0.8 0.7Vienna Int. Airport 14 9 14 16 6.8 4.7 5.1 4 .4 1.3 0.8 0.8 0.8Median CEE 14.2 15.0 14.3 13.7 8 .7 6.0 5.5 4 .7 1.6 1.3 1.2 1.1EuroStoxx Travel & Tourism

11.9 14.9 9.4 7.3 6.6 6.1 5.9 5.7 1.8 1.6 1.5 1.4

CEE to Peer, Prem/Disc 20% 1% 53% 86% 31% -1% -6% -16% -10% -19% -19% -18%

2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAmRest 0.8 0.7 0.7 0.5 8 .8 7.7 6.0 4 .6Danubius Hotels 1.4 1.1 1.0 0.9 12.2 9.4 8.0 7 .1DO & CO 0.5 0.4 0.3 0.3 4 .5 3.4 2.9 2 .8Fortuna Entertainment 3.0 2.5 2.1 1.9 9 .8 11.2 10.7 8 .9Turkish Airlines 0.6 0.6 0.6 0.6 4 .9 5.3 4.9 4 .6Vienna Int. Airport 3.5 2.9 2.9 2.7 11.0 8.8 9.8 8 .7Median CEE 1.1 0.9 0.8 0.8 9 .3 8.2 7.0 5 .9EuroStoxx Travel & Tourism

0.6 0.6 0.5 0.5 7.0 4.8 4.4 3.5

CEE to Peer, Prem/Disc 71% 56% 55% 50% 32% 72% 59% 67%

P/CE P/BV

EV/Sales EV/EBITDA

P/E




AmRest Sell Target price PLN 74.0Price (PLN) 75.0 ROCE 2010 6.9% 10e 11e 12e 13eMcap (PLN mn) 1,418 ROE 2010 7.4% Sales (PLN mn) 2,029.4 2,379.0 2,780.8 3,110.7Mcap (EUR mn) 341 Net debt (EURmn, 10) 44.6 EBITDA margin 8.73% 9.59% 10.94% 11.84%Free float (%) 68.2% Gearing (2010) 24% EBIT margin 3.69% 4.18% 5.18% 5.98%Free float (EUR mn) 233 Sales CAGR 10-13e 11.7% Net profit margin 2.05% 2.42% 3.16% 4.04%Shares outst. (mn) 18.9 EPS CAGR 10-13e 25.3% EPS (PLN) 2.38 3.04 4.65 6.65


Performance 1M 3M 6M 12MAbsolute (PLN terms) -2.0% -2.8% 1.1% 4.9%Rel. to sector (EUR, ppt) 8.7 14.9 20.1 26.4Rel. to universe (EUR, ppt) 4.3 7.5 7.9 6.4

Danubius Hotels Hold Target price HUF 4040.0Price (HUF) 3,400.0 ROCE 2010 -0.2% 10 11e 12e 13eMcap (HUF mn) 26,897 ROE 2010 -1.7% Sales (HUF mn) 42,920.0 44,422.5 47,386.2 49,842.6Mcap (EUR mn) 98 Net debt (EURmn, 10) 77.4 EBITDA margin 11.30% 11.69% 12.89% 13.20%Free float (%) 17.6% Gearing (2010) 41% EBIT margin 0.83% 1.15% 3.17% 3.97%Free float (EUR mn) 17 Sales CAGR 10-13e 3.5% Net profit margin -2.06% -0.13% 0.91% 1.81%Shares outst. (mn) 7.9 EPS CAGR 10-13e #ZAHL! EPS (HUF) -111.62 -7.43 54.51 114.01

Dividend/share (HUF) 0.00 0.00 0.00 0.00EV/sales 1.38 1.10 1.03 0.94EV/EBITDA 12.17 9.43 7.96 7.13P/E nm nm 62.37 29.82P/CE 10.49 5.57 5.41 4.86P/BV 0.70 0.53 0.53 0.52Dividend yield 0.00% 0.00% 0.00% 0.00%EV/EBITDA rel. 1.3 1.1 1.1 1.2P/E rel. - - 4.4 2.2

Performance 1M 3M 6M 12MAbsolute (HUF terms) -5.4% -5.0% -12.8% -18.9%Rel. to sector (EUR, ppt) 7.3 14.5 10.2 10.5Rel. to universe (EUR, ppt) 2.9 7.1 -2.0 -9.6

DO & CO Buy Target price EUR 40.0Price (EUR) 28.0 ROCE 2010 29.4% 10e 11e 12e 13e

ROE 2010 14.8% Sales (EUR mn) 426 486 550 540Mcap (EUR mn) 273 Net debt (EURmn, 10) -109 EBITDA margin 10.76% 10.55% 10.70% 10.33%Free float (%) 47.0% Gearing (2010) -72% EBIT margin 6.65% 6.42% 6.62% 5.92%Free float (EUR mn) 128 Sales CAGR 10-13e 11.2% Net profit margin 5.26% 5.26% 5.41% 4.88%Shares outst. (mn) 9.7 EPS CAGR 10-13e 10.6% EPS (EUR) 1.58 1.81 2.04 1.85


Performance 1M 3M 6M 12MAbsolute (EUR terms) -15.1% -8.6% 4.2% 54.1%Rel. to sector (EUR, ppt) -0.8 13.6 27.7 80.4Rel. to universe (EUR, ppt) -5.2 6.2 15.5 60.4

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Fortuna Entertainment Accumulate Target price EUR 120.0Price (EUR) 104.0 ROCE 2010 0.0% 10e 11e 12e 13eMcap (EUR mn) 224 ROE 2010 46.4% Sales (EUR mn) 379 456 543 602Mcap (EUR mn) 224 Net debt (EURmn, 10) 5 EBITDA margin 30.21% 21.98% 19.58% 21.17%Free f loat (%) 32.7% Gearing (2010) 11% EBIT margin 27.30% 19.41% 17.20% 18.82%Free f loat (EUR mn) 73 Sales CAGR 10-13e 15.5% Net profit margin 22.54% 15.92% 14.29% 15.58%Shares outst. (mn) 52.0 EPS CAGR 10-13e 2.0% EPS (EUR) 0.39 0.29 0.30 0.35

Dividend/share (EUR) 0.27 0.20 0.21 0.25EV/sales 2.96 2.46 2.09 1.88EV/EBITDA 9.81 11.19 10.68 8.87P/E 11.03 15.02 14.43 12.21P/CE 9.93 12.93 12.38 10.61P/BV 5.05 5.00 4.55 4.09Dividend yield 6.35% 4.66% 4.85% 5.73%EV/EBITDA rel. - 1.4 1.5 1.5P/E rel. - 1.0 1.0 0.9

Performance 1M 3M 6M 12MAbsolute (EUR terms) -10.0% -18.8% 1.1% -1.9%Rel. to sector (EUR, ppt) 4.3 4.6 25.2 26.3Rel. to universe (EUR, ppt) -0.1 -2.8 13.1 6.2

Turkish Airlines Accumulate Target price TRY 4.75Price (TRY) 2.4 ROCE 2010 3.7% 10e 11e 12e 13eMcap (TRY mn) 2,868 ROE 2010 7.2% Sales (TRY mn) 8,167 10,425 11,970 12,764Mcap (EUR mn) 1,165 Net debt (EURmn, 10) 1,204 EBITDA margin 11.71% 11.09% 13.08% 12.82%Free f loat (%) 50.9% Gearing (2010) 71% EBIT margin 6.49% 6.87% 8.72% 8.46%Free f loat (EUR mn) 593 Sales CAGR 10-13e 16.1% Net profit margin 2.89% 4.65% 6.20% 6.51%Shares outst. (mn) 1,200.0 EPS CAGR 10-13e 10.4% EPS (TRY) 0.20 0.40 0.62 0.69



Vienna Int. Airport Reduce Target price EUR 32.0Price (EUR) 33.9 ROCE 2010 5.1% 10e 08e 09e 10eMcap (EUR mn) 711 ROE 2010 9.4% Sales (EUR mn) 534 573 600 632Mcap (EUR mn) 711 Net debt (EURmn, 10) 771 EBITDA margin 31.50% 32.93% 29.95% 31.38%Free f loat (%) 50.0% Gearing (2010) 94% EBIT margin 19.17% 21.48% 14.95% 13.18%Free f loat (EUR mn) 356 Sales CAGR 10-13e 6% Net profit margin 14.18% 14.45% 8.33% 7.22%Shares outst. (mn) 21.0 EPS CAGR 10-13e -11.2% EPS (EUR) 3.61 3.95 2.38 2.17


Performance 1M 3M 6M 12MAbsolute (EUR terms) -3.8% -16.3% -30.9% -26.8%Rel. to sector (EUR, ppt) 10.5 6.0 -7.5 -0.5Rel. to universe (EUR, ppt) 6.1 -1.4 -19.6 -20.6

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Sector Insight Utilities


– CEZ’ 2Q11 EBITDA hurt by low CO2 gains – Zorlu Enerji acquired additional stake in Russian venture as part of court settlement – Kazanci Holding finance deal - implied valuation positive for Aksa Enerji – Transgaz 1H11 profit above expectations

As weak summer season ends, electricity prices show modest recovery. One-year forward power prices on the EEX are up 1.6% m/m, while the one month contracts are up 4.7%. The increase in power prices was primarily driven by the recovery of CO2 prices (+8.2%) from their recent multi-month lows and, which is quite positive, by steadily growing clean-dark spreads. Our model clean-dark spreads (or model margins on generation from hard coal) are at the EUR 5.0/MWh level, which is the highest value in more than three years. Spreads between the EEX and Czech prices are steady, at around EUR 2.0/MWh for CAL 12, but negative for the front month contract. Polish prices are slightly up in the local currency, to PLN 205/MWh for the 2012 contract, while they are down in EUR (to EUR 49.5/MWh), due to significant depreciation of the PLN during August.

Power prices on EEX and PXE and clean-dark spreads on the EEX

Source: Bloomberg, Erste Group estimates

CEZ: Summary of our company report (Accumulate maintained). As we rollover our forecast period, we lower our target price for CEZ by 7%, to CZK 902/share, due to higher YE2011e net debt and slightly lower mid-term estimates, which is partly offset with lower WACC (safe haven effect). We keep our 2011-12 estimates almost unchanged, but lower our 2013 estimates 9.5%, due to lower expected CO2 and, consequently, electricity prices. The later finalization of two power plants (from early 2013 to 2014) further delays earnings growth. We keep our Accumulate recommendation with an 18% upside potential, as we see the basic story about a necessary increase in electricity prices as untouched. CEZ is one of the best plays on power prices in the CE region.

CEZ reported a 12.8% y/y decline in EBITDA, primarily due to lower hedged power prices and due to surprisingly low gains on CO2 permits (higher utilization of coal plants and negative revaluation). EBITDA in the core CE generation segment thus decreased by 15% y/y, in spite of a 3% y/y increase in production. Results in the distribution segment (some 19% share on EBITDA in 2010) declined as well, but this business is volatile on a quarterly basis and included some one-offs in 1H11. The first significant production from wind farms in Romania (600 MW once finalized) brought some relief to the results. Net income was further affected by the 32% gift tax on granted CO2 permits (valid for 2011-12) and by the decreasing value of options on MOL shares (MOL share price was down 13% q/q) and fell by 40% y/y. The 2Q results were basically hurt by several negatives, which will be hardly repeated (MOL options, one-offs in distribution, significant fluctuation in EUA and CER prices). More importantly, the company confirmed its FY11 EBITDA guidance at CZK 84.8bn (-4.8% y/y) and increased its net income guidance by 1.2%, to CZK 40.6bn (-14% y/y), thanks to lower achieved interest rates.

CEZ: 77.6mn free CO2 permits for NAP III. The Czech Environment Ministry specified its draft plan for free CO2 permit allocations in 2013-20, to be submitted to the EC by the end of September. Electricity producers will be granted a total of 108.2mn permits in the period and CEZ will get 77.6mn permits (including CO2 permits for the to-be-acquired Energotrans plant). This means that CEZ should get around 72% of the total. We have included the proposal in our new report with more or less neutral impact on the net income and valuation compared to

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earlier expectations. Note there is still room for negotiation and we think CEZ is in good position to get slightly more. The proposal should help to lift the uncertainty regarding CO2 permit allocations in NAP III, which could help CEZ’s shares get closer to our target price.

In a filing submitted to the Public Disclosures Platform, Zorlu Enerji announced that a settlement had been reached with Talex International LLC in the legal case announced on April 27, 2010, initiated by Invar International Inc. and Talex International LLC. Zorlu Enerji has announced that, according to the settlement, a 24.5% stake in ICFS International LLC was acquired from Talex International LLC for USD 14.8mn. Talex will thus have no stake left in ICFS Int’l LLC, while Zorlu Enerji's stake will increase to 75.5%, and Invar maintains its stake of 24.5%. There are two natural gas power plant projects, each with a capacity of 340 MW in Moscow, Russia, that ICFS Int’l LLC has undertaken. The initial phase, with a capacity of 340 MW, is expected to be operational within 2011.

In a filing submitted to the Public Disclosures Platform, Kazanci Holding, the parent company of Aksa Enerji, announced that a finance deal was signed with Goldman Sachs International (GSI). Kazanci Holding will receive a finance package for USD 192mn for a period of one year and one week that is collateralized with a 43.64% stake in Aksa Enerji. USD 150mn of this loan will be used to repay debt owed to Aksa Enerji by Kazanci Holding. Kazanci Holding has also appointed GSI exclusively for a stake sale and signed a protocol agreement that is not binding. Kazanci Holding will sell a 26.47% stake in Aksa Enerji for USD 450mn to GSI and Kazanci Holding will provide protection for GSI against unfavorable economic conditions. The sale proceeds will be used to repay the USD 192mn provided by GSI and repay debt owed to Aksa Enerji. The final binding agreement is planned to be completed by October. Recent news reports had revealed that such a deal was on the way. The deal is positive for Aksa Enerji, as it will receive back loans, and the stake sale of 26.47% implies a total valuation of USD 1.7bn, much higher than the recent market value of USD 1.125bn

Transelectrica announced net profit for 1H11 of RON 178.6mn, fuelled by an excellent operating performance, with EBITDA of RON 344.7mn, + 134.5% y/y. The bottom line was sustained by the RON appreciation against the EUR in the first half of the year, which resulted in RON 24.4mn unrealized FX gains (due to revaluation of balance sheet positions in FC as of the end of June). The performance was in line with the signal sent by the first quarter results, but is above our forecasts and market consensus. As expected, after the weak FY09 and FY10, Transelectrica will enjoy an excellent FY11. This is based on the advance of the business in volume terms by over 10% and an increase of the transmission tariff by 10.4%. The 2011 figures should be supportive for our Buy rating and for market sentiment related to this stock, after the financial markets return to more confident territory.

Transgaz reported 3.2% higher sales y/y for 1H11, to RON 712mn, on the back of higher volume of gas transported (+5.2%). While sales were in line with our forecast, EBIT came in higher (+0.9% y/y), at RON 310mn, which is 2.8% above our forecast and 5.2% higher than the market consensus. We are rather optimistic for FY11. Our view is based on better expectations in terms of gas consumption development y/y, with the main triggers being the power production sector (as result of Petrom’s starting power plant operations) and the chemical sector. Thus, even in a negative scenario wherein the tariffs charged by Transgaz are not updated by the end of the year, we believe that there is a high chance that the company’s FY11 results will be similar to those from FY10, which was an exceptional year for the company. Negative surprises may occur if the cost of maintenance and repair works significantly jumps y/y. In 1H11, the expenses incurred from these were in line with our estimate, which makes us confident that no major (negative) deviation from our estimate will be seen.

Polish energy segment - There were important events in September. The CO2 allocation plan was revealed. Starting from 2013, energy generating companies will be granted only 47-53% (and falling) of the rights for emission. This is a harsher regulation than was widely expected. PGE also signaled that it does not expect the CO2 burden to be fully incorporated in the prices. This would most severely affect hard coal generating units (on which Tauron is almost 100% based), which would be forced to sell energy below the variable cost level. This would increase the competitive edge of PGE over Tauron. Both utilities posted quite good results for 2Q11. Separately, PGE announced that it will not go through with the debut of PGE Renewable this year, due to the poor market conditions.




Akenerji Elektrik TRY 546.6 -3.8% 5.6% 6.6% 7.4% 6.5% 20.4% 21.7% 21.0% -2.1% -11.9% 13.7% -22.5%Aksa Enerji Uretim AS TRY 603.0 9.9% 14.9% 14.6% 15.4% 20.9% 21.7% 22.0% 22.7% -34.3% -48.3% -47.1% -58.5%CEZ CZK 17,222.7 22.8% 18.1% 17.7% 16.7% 44.8% 40.7% 41.7% 39.2% -9.5% -15.9% -2.4% -2.6%PGE PLN 9,131.1 8.9% 13.6% 10.1% 8.9% 33.3% 32.9% 27.5% 24.3% -14.8% -21.6% -13.0% -13.9%Tauron Polska Energia PLN 2,256.7 6.5% 7.7% 6.8% 4.6% 17.7% 13.3% 12.6% 10.7% -19.7% -22.5% -17.1% -4.5%Transelectrica RON 335.7 0.7% 5.3% 9.6% 12.9% 15.4% 18.8% -6.2% -19.4% -11.1% 10.2%Transgaz RON 558.7 10.2% 7.6% 8.2% 41.2% 33.2% 32.4% -9.9% -23.1% -25.8% -15.3%Verbund EUR 9,340.3 11.2% 10.1% 15.7% 15.8% 32.0% 31.4% 33.5% 33.4% -3.9% -13.9% -3.0% -3.2%Zorlu Enerji TRY 196.8 -37% -43% 51.7% 48.6% 11.9% 26.1% 35.8% 36.6% -20.3% -32.3% -34.1% -49.1%Median - - 9% 14% 12% 12% 27% 27% 25% 23% - - - -Enel S.p.A. EUR 38,102 11.7% 11.5% 11.3% 11.1% 23.8% 23.8% 23.9% 23.8% -7.0% -16.1% -1.2% 9.0%RWE AG EUR 20,770 25.7% 14.3% 14.2% 11.4% 20.2% 15.7% 16.4% 14.9% -0.1% -15.5% -29.5% -32.1%Fortum Oyj EUR 16,568 16.4% 15.2% 15.1% 15.3% 36.1% 40.8% 39.8% 39.8% -3.4% -19.3% -16.2% 4.1%Electricite de France S.A. EUR 50,251 12.6% 10.0% 11.2% 11.7% 25.5% 23.1% 24.2% 24.5% 2.7% -5.6% -15.9% -16.8%Median Total - 164,531 12.6% 11.5% 11.3% 11.4% 23.8% 23.1% 23.9% 23.8% - - - -EuroStoxx Utilities 359,470 11.7% 10.0% 11.3% 11.3% 26% 25% 25% 25% 0.0% 0.0% 0.0% 0.0%CEE to Peer, Prem/Disc - -26% 24% 9% 6% 14% 18% 3% -1% - - - -


2010 2011e 2012e 2013e 2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAkenerji Elektrik nm 27.8 24.5 20.2 778.3 16.2 15.3 13.0 1.8 1.7 1.6 1.4Aksa Enerji Uretim AS 46.4 10.3 9.8 8.1 21.3 5.6 5.1 4.5 3.5 1.6 1.3 1.1CEZ 8.9 10.2 9.6 9.4 5.7 6.2 5.9 5.5 1.9 1.8 1.6 1.5PGE 13.6 7.0 8.9 9.8 7.3 4.9 5.2 5.2 1.2 0.9 0.9 0.9Tauron Polska Energia 13.5 7.8 8.6 12.3 4.5 3.5 3.6 3.8 0.8 0.6 0.6 0.6Transelectrica 100.2 13.7 6.9 5.1 3.6 2.8 0.7 0.7 0.6Transgaz 8.2 11.1 10.4 4.7 5.4 5.2 0.8 0.9 0.8Verbund 21.8 22.3 13.1 11.7 14.9 13.2 9.4 8.7 2.4 2.2 1.9 1.8Zorlu Enerji nm nm 7.0 4.5 38.5 16.6 2.8 2.3 5.0 4.9 2.9 1.7Median CEE 13.6 10.3 9.7 9.6 14.3 5.9 5.5 5.3 1.8 1.6 1.4 1.3Enel S.p.A. 8.6 8.4 8.1 7.9 3.3 3.4 3.3 3.1 1.0 1.0 0.9 0.9RWE AG 5.3 8.4 7.9 9.4 2.8 3.4 3.3 3.4 1.4 1.2 1.1 1.1Fortum Oyj 12.3 12.0 11.4 10.6 11.5 7.5 7.9 7.3 2.0 1.8 1.7 1.6Electricite de France S.A. 12.6 15.3 13.0 11.8 4.4 4.6 4.3 4.1 1.6 1.5 1.5 1.4Median Total 8.6 12.0 10.1 9.4 3.5 4.6 4.3 4.1 1.4 1.2 1.1 1.1EuroStoxx Utilities 12.3 12.1 10.7 9.9 4.5 4.8 4.5 4.3 1.1 1.1 1.1 1.0CEE to Peer, Prem/Disc 58% -14% -4% 2% 310% 27% 29% 29% 35% 33% 29% 21%

2010 2011e 2012e 2013e 2010 2011e 2012e 2013eAkenerji Elektrik 5.1 3.6 4.4 4.3 77.7 17.7 20.1 20.6Aksa Enerji Uretim AS 4.4 1.5 1.4 1.2 21.0 6.8 6.1 5.2CEZ 2.9 2.8 2.7 2.5 6.4 7.0 6.5 6.3PGE 2.2 1.2 1.2 1.2 6.6 3.7 4.5 4.8Tauron Polska Energia 0.8 0.4 0.4 0.5 4.4 3.2 3.4 4.4Transelectrica 0.9 1.0 0.9 7.3 6.2 5.0Transgaz 1.7 1.8 1.6 4.2 5.4 4.8Verbund 4.3 4.0 3.3 3.2 13.6 12.8 9.8 9.5Zorlu Enerji 4.8 3.9 1.9 1.6 40.4 15.1 5.3 4.3Median CEE 3.6 2.2 2.0 1.8 13.8 6.9 6.3 5.7Enel S.p.A. 1.1 1.1 1.1 1.0 4.6 4.7 4.6 4.4RWE AG 0.8 0.7 0.7 0.6 4.0 4.4 4.1 4.1Fortum Oyj 4.3 3.6 3.5 3.3 11.8 8.9 8.9 8.2Electricite de France S.A. 1.4 1.3 1.3 1.3 5.5 5.6 5.3 5.2Median Total 1.1 1.1 1.1 1.0 5.2 5.6 5.3 5.1EuroStoxx Utilities 1.6 1.6 1.5 1.4 7.0 6.7 6.2 6.0CEE to Peer, Prem/Disc 232% 92% 86% 74% 166% 23% 20% 13%

P/CE P/BV

EV/Sales EV/EBITDA

P/E




Akenerji Elektrik Accumulate Target price TRY 3.6Price (TRY) 4 ROCE 2010 -1.8% 10 11e 12e 13eMcap (TRY mn) 1,345 ROE 2010 -3.8% Sales (TRY mn) 428 529 546 611Mcap (EUR mn) 547 Net debt (EURmn, 10) 429.1 EBITDA margin 6.52% 20.41% 21.70% 21.00%Free float (%) 25.3% Gearing (2010) 116% EBIT margin -0.03% 14.41% 15.70% 15.00%Free float (EUR mn) 138 Sales CAGR 10-13e 7.5% Net prof it margin -5.99% 8.43% 10.06% 10.90%Shares outst. (mn) 375.8 EPS CAGR 10-13e 41.6% EPS (TRY) -0.07 0.12 0.15 0.18

Dividend/share (TRY) 0.00 0.00 0.00 0.00EV/sales 5.07 3.62 4.35 4.33EV/EBITDA 77.71 17.75 20.05 20.64P/E nm 27.80 24.48 20.22P/CE 778.28 16.24 15.34 13.04P/BV 1.77 1.66 1.56 1.45Dividend yield 0.00% 0.00% 0.00% 0.00%EV/EBITDA rel. 5.6 2.6 3.2 3.6P/E rel. - 2.7 2.5 2.1

Performance 1M 3M 6M 12MAbsolute (TRY terms) 0.6% -5.5% 25.6% -1.6%Rel. to sector (EUR, ppt) 7.4 5.2 20.0 -15.8Rel. to universe (EUR, ppt) 7.8 2.9 24.9 -16.3

Aksa Enerji Uretim AS Buy Target price TRY 3.8Price (TRY) 2.6 ROCE 2010 3.5% 10 11e 12e 13eMcap (TRY mn) 1,484 ROE 2010 9.9% Sales (TRY mn) 911.3 1,597.3 1,763.9 1,806.0Mcap (EUR mn) 603 Net debt (EURmn, 10) 579.9 EBITDA margin 20.86% 21.73% 22.03% 22.69%Free float (%) 5.5% Gearing (2010) 145% EBIT margin 12.99% 14.73% 14.03% 14.69%Free float (EUR mn) 33 Sales CAGR 10-13e 19.8% Net prof it margin 6.62% 8.32% 8.57% 10.20%Shares outst. (mn) 578 EPS CAGR 10-13e 22.0% EPS (TRY) 0.11 0.23 0.26 0.32



CEZ Accumulate Target price CZK 902.0Price (CZK) 780.0 ROCE 2010 11.9% 10 11e 12e 13eMcap (CZK mn) 416,446 ROE 2010 22.8% Sales (CZK mn) 198,848 208,583 216,412 234,752Mcap (EUR mn) 17,223 Net debt (EURmn, 10) 5,671 EBITDA margin 44.80% 40.72% 41.75% 39.20%Free float (%) 30.1% Gearing (2010) 63% EBIT margin 32.72% 28.48% 29.27% 25.77%Free float (EUR mn) 5,184 Sales CAGR 10-13e 4.6% Net prof it margin 23.72% 19.63% 20.03% 18.74%Shares outst. (mn) 533.9 EPS CAGR 10-13e 2.4% EPS (CZK) 88.48 76.81 81.32 82.54


Performance 1M 3M 6M 12MAbsolute (CZK terms) -9.5% -17.1% -3.1% -4.6%Rel. to sector (EUR, ppt) 0.0 1.3 3.9 4.1Rel. to universe (EUR, ppt) 0.4 -1.0 8.8 3.7

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PGE Accumulate Target price PLN 26.8Price (PLN) 20.3 ROCE 2010 8.6% 10 11e 12e 13eMcap (PLN mn) 37,938 ROE 2010 8.9% Sales (PLN mn) 20,476.5 27,668.0 29,253.6 32,394.7Mcap (EUR mn) 9,131 Net debt (EURmn, 10) 237 EBITDA margin 33.35% 32.88% 27.48% 24.26%Free f loat (%) 30.7% Gearing (2010) 2% EBIT margin 20.44% 23.18% 17.88% 15.00%Free f loat (EUR mn) 2,803 Sales CAGR 10-13e 10.6% Net prof it margin 17.60% 19.09% 14.71% 12.16%Shares outst. (mn) 1,869.8 EPS CAGR 10-13e -1.94% EPS (PLN) 1.71 2.78 2.27 2.08



Tauron Polska Energia Sell Target price PLN 5.8Price (PLN) 5.4 ROCE 2010 6.0% 10 11e 12e 13eMcap (PLN mn) 9,376 ROE 2010 6.5% Sales (PLN mn) 15,428.9 21,386.9 22,548.1 24,613.2Mcap (EUR mn) 2,257 Net debt (EURmn, 10) -2 EBITDA margin 17.66% 13.26% 12.60% 10.66%Free f loat (%) 59.9% Gearing (2010) 0% EBIT margin 9.07% 7.04% 6.41% 4.51%Free f loat (EUR mn) 1,352 Sales CAGR 10-13e 15.9% Net prof it margin 6.43% 5.52% 4.95% 3.18%Shares outst. (mn) 1,752.5 EPS CAGR 10-13e 68.92% EPS (PLN) 0.49 0.65 0.62 0.43


Performance 1M 3M 6M 12MAbsolute (PLN terms) -24.4% -25.9% -10.8% 23.1%Rel. to sector (EUR, ppt) -10.1 -5.3 -10.8 2.1Rel. to universe (EUR, ppt) -9.8 -7.6 -5.9 1.7

Transelectrica Buy Target price RON 24.0Price (RON) 19.4 ROCE 2010 1.3% 10e 11e 12e 13eMcap (RON mn) 1,422 ROE 2010 0.7% Sales (RON mn) 2,750 2,910 3,164Mcap (EUR mn) 336 Net debt (EURmn, 10) 281 EBITDA margin 12.90% 15.40% 18.82% Free f loat (%) 12.8% Gearing (2010) 62% EBIT margin 2.88% 5.42% 9.14% Free f loat (EUR mn) 43 Sales CAGR 10-13e #WERT! Net prof it margin 0.51% 3.53% 6.47%Shares outst. (mn) 73.3 EPS CAGR 10-13e #WERT! EPS (RON) 0.19 1.40 2.79

Dividend/share (RON) 0.08 0.56 1.12EV/sales 0.94 0.95 0.93 EV/EBITDA 7.32 6.20 4.96 P/E 100.16 13.71 6.95P/CE 5.12 3.55 2.77P/BV 0.74 0.72 0.62Dividend yield 0.40% 2.92% 5.75% EV/EBITDA rel. 0.5 0.9 0.8 #WERT!P/E rel. 7.4 1.3 0.7 #WERT!

Performance 1M 3M 6M 12MAbsolute (RON terms) -6.2% -17.4% -10.5% 9.6%Rel. to sector (EUR, ppt) 3.3 -0.2 -4.2 16.3Rel. to universe (EUR, ppt) 3.7 -2.5 0.8 15.8

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Transgaz Hold Target price RON 287.7Price (RON) 201.0 ROCE 2010 9.6% 10e 11e 12e 13eMcap (RON mn) 2,367 ROE 2010 10.2% Sales (RON mn) 1,308 1,380 1,530Mcap (EUR mn) 559 Net debt (EURmn, 10) -17 EBITDA margin 41.21% 33.19% 32.38% Free f loat (%) 11.5% Gearing (2010) -2% EBIT margin 25.09% 17.24% 17.51% Free f loat (EUR mn) 64 Sales CAGR 10-13e #WERT! Net prof it margin 21.90% 15.25% 14.84%Shares outst. (mn) 11.8 EPS CAGR 10-13e #WERT! EPS (RON) 24.33 17.88 19.28

Dividend/share (RON) 30.80 12.40 13.03EV/sales 1.74 1.78 1.56 EV/EBITDA 4.23 5.38 4.81 P/E 8.21 11.14 10.43P/CE 4.71 5.43 5.20P/BV 0.82 0.86 0.84Dividend yield 15.41% 6.23% 6.48% EV/EBITDA rel. 0.3 0.8 0.8 #WERT!P/E rel. 0.6 1.1 1.1 #WERT!

Performance 1M 3M 6M 12MAbsolute (RON terms) -9.9% -21.2% -25.3% -15.7%Rel. to sector (EUR, ppt) -0.3 -4.0 -19.0 -9.1Rel. to universe (EUR, ppt) 0.0 -6.3 -14.1 -9.5

Verbund Hold Target price EUR 34.0Price (EUR) 27.0 ROCE 2010 7.5% 10 11e 12e 13eMcap (EUR mn) 9,340 ROE 2010 11.2% Sales (EUR mn) 3,308 3,531 4,227 4,321Mcap (EUR mn) 9,340 Net debt (EURmn, 10) 4,387 EBITDA margin 32.02% 31.35% 33.51% 33.37%Free f loat (%) 15.6% Gearing (2010) 100% EBIT margin 25.05% 23.68% 27.21% 27.26%Free f loat (EUR mn) 1,457 Sales CAGR 10-13e 6% Net prof it margin 14.64% 13.96% 19.94% 21.53%Shares outst. (mn) 345.9 EPS CAGR 10-13e 2.4% EPS (EUR) 1.28 1.21 2.06 2.30


Performance 1M 3M 6M 12MAbsolute (EUR terms) -3.9% -13.9% -3.0% -3.2%Rel. to sector (EUR, ppt) 5.6 3.3 3.3 3.5Rel. to universe (EUR, ppt) 6.0 1.0 8.3 3.1

Zorlu Enerji Accumulate Target price TRY 2.0Price (TRY) 1.7 ROCE 2010 -3.5% 10 11e 12e 13eMcap (TRY mn) 484 ROE 2010 -36.6% Sales (TRY mn) 434 466 895 901Mcap (EUR mn) 197 Net debt (EURmn, 10) 661 EBITDA margin 11.87% 26.07% 35.78% 36.58%Free f loat (%) 32.0% Gearing (2010) 869% EBIT margin -8.06% 8.02% 24.33% 25.08%Free f loat (EUR mn) 63 Sales CAGR 10-13e 17% Net prof it margin -17.43% -12.29% 7.78% 12.07%Shares outst. (mn) 281.7 EPS CAGR 10-13e 2.7% EPS (TRY) -0.24 -0.20 0.25 0.39

Dividend/share (TRY) 0.00 0.00 0.00 0.00EV/sales 4.79 3.93 1.90 1.56EV/EBITDA 40.39 15.08 5.32 4.27P/E nm nm 6.96 4.45P/CE 38.45 16.64 2.82 2.28P/BV 5.00 4.86 2.86 1.74Dividend yield 0.00% 0.00% 0.00% 0.00%EV/EBITDA rel. 2.9 2.2 0.8 0.7P/E rel. - - 0.7 0.5


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Looking ahead


Date Company/country Release/event05 Sep Telekom Slovenije / Slovenia Dividend pay day

Kapsch TrafficCom / Austria Dividend pay dayTelefónica O2 �R / Czech Republic Ex-Dividend day

06 Sep Zumtobel / Austria 1Q 2011/12 results07 Sep Transelectrica / Romania Half-yearly consolidate f inancial statements 201113 Sep Vienna Airport / Austria Traffic figures

PGE / Poland Ex-Dividend day16 Sep Wolford / Austria 1Q 2011/12 results

PBG / Poland Ex-Dividend day21 Sep bene / Austria 2Q 2011/12 results

OMV / Austria Capital Markets Day (1)22 Sep Wolford / Austria Ex-Dividend day

OMV / Austria Capital Markets Day (2)26 Sep Immofinanz/Austria 1Q 2011/12 results28 Sep Immofinanz/Austria AGM

PZU / Poland Ex-Dividend day30 Sep NWR / Czech Rep. Interim-dividend pay day11 Oct Vienna Airport / Austria Traffic figures13 Oct Agrana / Austria 2Q 2011/12 results18 Oct Pegas NW / Czech Rep. Ex-Dividend day

Turk Telekom / Turkey 3Q 2011 results20 Oct AT&S / Austria 2Q 2011/12 results21 Oct OMV / Austria Trading statement

Petrom / Romania Trading statementUnipetrol / Czech Rep. Trading statement

24 Oct austriamicrosystems / Austria 3Q 2011 results - after session25 Oct Erste Group / Austria 3Q 2011 results26 Oct CME / Czech Rep. 3Q 2011 results27 Oct Banca Transilvania / Romania 3Q 2011 results

Verbund / Austria 3Q 2011 resultsBZ WBK / Poland 3Q 2011 resultsEricsson Nikola Tesla / Croatia 3Q 2011 resultsAtlantic Grupa / Croatia 3Q 2011 resultsUnipetrol / Czech Rep. 3Q 2011 resultsPegas NW / Czech Rep. Dividend pay day

28 Oct Erste Group / Austria 3Q 2011 results T-Hrvatski Telekom / Croatia 3Q 2011 results

31 Oct Podravka / Croatia 1-3Q 2011 resultsSIF3 Transilvania / Romania 3Q 2011 results

01 Nov BRD GSG / Romania 3Q 2011 results03 Nov BRE Bank / Poland 3Q 2011 results

PKO BP / Poland 3Q 2011 resultsFortuna / Czech. Rep. 3Q 2011 resultsRHI / Austria 3Q 2011 results

04 Nov AMAG / Austria 3Q 2011 resultsSIF1 Banat Crisana / Romania 3Q 2011 results

08 Nov Intercell / Austria 3Q 2011 resultsKomercni banka / Czech Republic 3Q 2011 resultsPZU / Poland 3Q 2011 results

09 Nov Asseco Poland / Poland 3Q 2011 results - after sessionTelefónica O2 �R / Czech Republic 3Q 2011 resultsEgis / Hungary 4Q 2010/2011 resultsOMV / Austria 3Q 2011 resultsPetrom / Romania 3Q 2011 resultsCEZ / Czech Rep. 3Q 2011 resultsTelefónica O2 CR / Czech Rep. 3Q 2011 resultsWienerberger / Austria 3Q 2011 results

Looking ahead


Erste Group´s CEE Universe Mcap.

(EURmn)Free float (EUR mn)

Mcap. (EURmn)

Free float (EUR mn)

Mcap. (EURmn)

Free float (EUR mn)

PL PKO BP 10,638 5,187 A Verbund 9,340 1,457 HU MOL 6,121 1,622Bank Pekao 9,281 3,783 OMV 8,898 4,315 OTP 4,141 3,380PGE 9,131 2,803 Raiffeisen Bank Internationa 5,826 1,253 Richter Gedeon 2,368 1,770KGHM 8,111 5,532 voestalpine 4,451 2,937 Magyar Telekom 1,938 788PZU 7,357 4,032 Vienna Insurance Group 4,186 1,214 Egis 456 224TPSA 5,489 2,756 Telekom Austria 3,417 2,482 FHB 151 57PKN Orlen 4,046 2,518 Andritz 3,322 2,292 Danubius Hotels 98 17BZ WBK 3,916 1,155 STRABAG 2,732 628 E-Star 67 17BRE Bank 2,653 800 Immofinanz 2,357 2,061 PannErgy 45 30Tauron Polska Energia 2,257 1,352 Lenzing 2,185 708 Allami Nyomda 40 12Synthos 1,529 574 Uniqa 1,884 151 HR INA 5,610 432TVN 1,202 524 Austrian Post 1,501 705 T-Hrvatski Telekom 2,756 1,061Cyfrowy Polsat 953 331 Mayr-Melnhof 1,405 576 Atlantic Grupa 275 74Lotos Group 944 394 Agrana 1,197 114 Ericsson Nikola Tesla 217 92LPP 872 423 Wienerberger 1,170 1,053 Podravka 205 122Eurocash 810 393 SBO 864 553 Atlantska plovidba 99 77Asseco Poland 754 415 CA IMMO 852 705 Institut IGH 27 24GTC 640 369 conwert 849 658 TR Turk Telekomunikasyo 11,148 1,393ZA Pulawy S.A. 454 155 Vienna Int. Airport 711 356 Garanti Bank 10,681 5,195NG2 407 212 RHI 699 370 Akbank 10,400 1,071Emperia Holding 366 256 Kapsch TrafficCom 680 206 Isbank 8,062 2,451Cersanit 348 179 Zumtobel 666 326 Turkcell Iletisim Hizmetle 6,811 2,280AmRest 341 233 Palfinger 635 226 Yapi Kredi Bank 6,004 1,093PBG S.A. 323 245 Semperit 632 309 Halkbank 5,459 1,361Inter Cars 280 158 AMAG 561 213 BIM 3,392 1,859Multimedia Polska 250 46 austriamicrosystems 433 329 Tupras 3,306 1,620ZCh Police S.A. 240 76 DO & CO 273 128 Vakifbank 3,148 793Empik 234 86 S Immo 269 218 Emlak Konut REIT 2,275 569Polimex 229 229 BWT 252 136 Ford Otosan 1,625 293Agora 183 98 CAToil 251 75 Turk Ekonomi Bank 1,540 166Rafako 179 90 AT&S 237 121 Turkish Airlines 1,165 593Ciech S.A. 173 138 Polytec 147 64 Tofas 1,146 278Farmacol 143 71 Wolford 120 63 Aygaz 1,026 249Bioton 142 99 Intercell 109 84 Petkim 934 361Apator 141 103 RS Komercijalna Banka 325 105 Bank Asya 702 357Kulczyk Oil Ventures 114 32 Aik Banka AD 215 170 Aselsan 682 104Mostostal Warszawa 113 56 Sojaprotein AD 98 36 Aksa Enerji Uretim AS 603 33PGF 108 65 CZ CEZ 17,223 5,184 Akenerji Elektrik 547 138ComArch 107 25 Telefónica CR 5,661 1,732 Akcansa 502 103Colian (Jutrzenka) 81 30 Komercni banka 5,521 2,189 Turkiye Sinai Kalkinma B 444 184Trakcja Polska 74 36 New World Resources 1,810 658 Yapi Kredi Sigorta 414 140Neuca 68 30 Unipetrol 1,365 505 Cimsa 387 124Action SA 61 32 Philip Morris CR 1,214 272 Gubre Fabrikalari 387 132Sygnity 46 26 CME 552 288 Anadolu Hayat 384 65ACE 33 29 Fortuna Entertainment 224 73 Albaraka Turk 374 83CNG 31 25 Pegas NW 175 131 Arcelik 370 93Vistula Group 25 20 Orco 84 83 Sekerbank 349 112Berling 18 5 RO Petrom 4,480 278 Sinpas REIT 317 117

SLO Krka 2,037 1,435 BRD-Group SG 1,971 801 Turcas Petrol AS 258 74Telekom Slovenije 458 116 Transgaz 559 64 Zorlu Enerji 197 63Gorenje 113 60 Banca Transilvania 387 331 Park Elektrik 180 58

USA FX Energy 212 177 Transelectrica 336 43 Bagfas 177 105NL Cinema City 351 162 Biofarm 50 28 Anadolu Sigorta 165 70

Antibiotice 50 18 Vestel 159 30Albalact 29 9 Aksigorta 145 55Teraplast 28 13 Gunes Sigorta 110 23

Ege Gubre 65 12

Looking ahead


Contacts Group Research Group Institutional & Retail Sales Head of Group Research Institutional Equity Sales Vienna Friedrich Mostböck, CEFA +43 (0)5 0100 - 11902 Head: Brigitte Zeitlberger-Schmid +43 (0)5 0100 - 83123 Macro/Fixed Income Research Cash Equity Sales Head: Gudrun Egger, CEFA (Euroland) +43 (0)5 0100 - 11909 Dieter Benesch +43 (0)5 0100 - 83131 Mildred Hager (SW, JP, Euroland) +43 (0)5 0100 - 17331 Hind Al Jassani +43 (0)5 0100 - 83111 Alihan Karadagoglu (Corporates) +43 (0)5 0100 - 19633 Werner Fuerst +43 (0)5 0100 - 83121 Peter Kaufmann (Corporates) +43 (0)5 0100 - 11183 Josef Kerekes +43 (0)5 0100 - 83125 Carmen Riefler-Kowarsch (Corporates) +43 (0)5 0100 - 19632 Cormac Lyden +43 (0)5 0100 - 83127 Rainer Singer (US) +43 (0)5 0100 - 11185 Stefan Raidl +43 (0)5 0100 - 83113 Elena Statelov, CIIA (Corporates) +43 (0)5 0100 - 19641 Simone Rentschler +43 (0)5 0100 - 83124 Macro/Fixed Income Research CEE Derivative Sales Co-Head CEE: Juraj Kotian (Macro/FI) +43 (0)5 0100 - 17357 Christian Luig +43 (0)5 0100 - 83181 Co-Head CEE: Rainer Singer (Macro/FI) +43 (0)5 0100 - 11185 Manuel Kessler +43 (0)5 0100 - 83182 CEE Equity Research Sabine Kircher +43 (0)5 0100 - 83161 Co-Head: Günther Artner, CFA +43 (0)5 0100 - 11523 Christian Klikovich +43 (0)5 0100 - 83162 Co-Head: Henning Eßkuchen +43 (0)5 0100 - 19634 Armin Pfingstl +43 (0)5 0100 - 83171 Günter Hohberger (Banks) +43 (0)5 0100 - 17354 Roman Rafeiner +43 (0)5 0100 - 83172 Franz Hörl, CFA (Steel, Construction) +43 (0)5 0100 - 18506 Institutional Equity Sales London Elisabeth Springer, (Banks, Real Estate) +43 (0)5 0100 - 11903 Head: Michal Rizek +44 20 7623 - 4154 Daniel Lion, CIIA (IT) +43 (0)5 0100 - 17420 Jiri Feres +44 20 7623 - 4154 Christoph Schultes, CIIA (Insurance, Utility) +43 (0)5 0100 - 16314 Tatyana Dachyshyn +44 20 7623 - 4154 Thomas Unger, CFA (Oil&Gas) +43 (0)5 0100 - 17344 Declan Wooloughan +44 20 7623 - 4154 Vera Sutedja, CFA (Telecom) +43 (0)5 0100 - 11905 Institutional Equity Sales Croatia Vladimira Urbankova, MBA (Pharma) +43 (0)5 0100 - 17343 Damir Eror (Equity) +38 562 37 28 13 Martina Valenta, MBA (Real Estate) +43 (0)5 0100 - 11913 Zeljka Kajkut (Equity) +38 562 37 28 11 Gerald Walek, CFA (Machinery) +43 (0)5 0100 - 16360 Institutional Sales Czech Republic International Equities Head: Michal Rizek +420 224 995-53 Hans Engel (Market strategist) +43 (0)5 0100 - 19835 Ondrej Cech (Fixed income) +420 224 995-577 Stephan Lingnau (Europe) +43 (0)5 0100 - 16574 Radim Kramule +420 224 995-53 Ronald Stöferle (Asia) +43 (0)5 0100 - 11723 Jiri Smehlik (Equity) +420 224 995-510 Editor Research CEE Pavel Zdichynec (Fixed income) +420 224 995-590 Brett Aarons +420 233 005 904 Institutional Sales Hungary Research Croatia/Serbia Gregor Glatzer (Equity) +361 235-5144 Head: Mladen Dodig (Equity) +381 11 22 09 178 Attila Preisz (Equity) +361 235-5162 Head: Alen Kovac (Fixed income) +385 62 37 1383 Norbert Siklosi (Fixed income) +361 235-5842 Anto Augustinovic (Equity) +385 62 37 2833 Institutional Equity Sales PolandAnela Tomic (Fixed income) +385 62 37 2295 Head: Andrzej Tabor +4822 330 62 03Davor Spoljar; CFA (Equity) +385 62 37 2825 Pawel Czuprynski (Equity) +4822 330 62 12 Research Czech Republic Lukasz Mitan (Equity) +4822 330 62 13 Head: David Navratil (Fixed income) +420 224 995 439 Jacek Krysinski (Equity) +4822 330 62 18 Petr Bittner (Fixed income) +420 224 995 172 Institutional Equity Sales TurkeyHead: Petr Bartek (Equity) +420 224 995 227 Simin Öz Gerards (Head) +9 0212 371 2525Vaclav Kminek (Media) +420 224 995 289 Mine Yoruk +9 0212 371 2526 Jana Krajcova (Fixed income) +420 224 995 232 Institutional Equity Sales SlovakiaMartin Krajhanzl (Equity) +420 224 995 434 Head: Dusan Svitek +48 62 56 20Martin Lobotka (Fixed income) +420 224 995 192 Andrea Slesarova (Client sales) +48 62 56 27 Lubos Mokras (Fixed income) +420 224 995 456 Saving Banks & Sales Retail Research Hungary Head: Thomas Schaufler +43 (0)5 0100 - 84225 Head: József Miró (Equity) +361 235-5131 Equity Retail Sales Bernadett Papp (Equity) +361 235-5135 Head: Kurt Gerhold +43 (0)5 0100 - 84232 Gergely Gabler (Equity) +361 253-5133 Fixed Income & Certificate SalesZoltan Arokszallasi (Fixed income) +361 373-2830 Head: Uwe Kolar +43 (0)5 0100 - 83214 Research Poland Treasury Domestic SalesHead: Piotr Lopaciuk (Equity) +48 22 330 6252 Head: Markus Kaller +43 (0)5 0100 - 84239 Magda Zabieglik (Equity) +48 22 330 6250 Corporate Sales ATTomasz Kasowicz (Equity) +48 22 330 6251 Mag. Martina Kranzl +43 (0)5 0100 – 84147 Marek Czachor (Equity) +48 22 330 6254 Karin Rattay +43 (0)5 0100 - 84112 Bianka Madej (Equity) +48 22 330 6260 Mag. Markus Pistracher +43 (0)5 0100 - 84152Research Romania Günther Gneiss +43 (0)5 0100 - 84145 Head: Lucian Claudiu Anghel +40 21 312 6773 Jürgen Flassak, MA +43 (0)5 0100 - 84141 Mihai Caruntu (Equity) +40 21 311 27 54 Antonius Burger-Scheidlin, MBA +43 (0)5 0100 - 84624 Dorina Cobiscan (Fixed Income) +40 21 312 6773 1028 Fixed Income Institutional DeskDumitru Dulgheru (Fixed income) +40 21 312 6773 1028 Head G7: Thomas Almen +43 (0)5 0100 - 84323 Eugen Sinca (Fixed income) +40 21 312 6773 1028 Head Germany: Ingo Lusch +43 (0)5 0100 - 84111 Raluca Ungureanu (Equity) +40 21 311 2754 Fixed Income International & High End Sales Vienna Research Slovakia Jaromir Malak/ Zach Carvell +43 (0)5 100 - 84254 Head: Juraj Barta, CFA (Fixed income) +421 2 4862 4166 U. Inhofner/ P. Zagan/ C. Mitu +43 (0)5 100 - 84254Michal Musak (Fixed income) +421 2 4862 4512 Fixed Income International Sales LondonMaria Valachyova (Fixed income) +421 2 4862 4185 Antony Brown +44 20 7623 4159 Research Ukraine Head: Maryan Zablotskyy (Fixed income) +38 044 593 - 9188Ivan Ulitko (Equity) +38 044 593 – 0003 Igor Zholonkivskyi (Equity) +38 044 593 - 1784 Research Turkey Head: Erkin Sahinoz (Fixed Income) +90 212 371 2540Sevda Sarp (Equity) +90 212 371 2537 Evrim Dairecioglu (Equity) +90 212 371 2535 Ozlem Derici (Fixed Income) +90 212 371 2536 Duygu Kalfaoglu (Equity) +90 212 371 2534 Mehmet Emin Zumrut (Equity) +90 212 371 2539

Looking ahead


Disclosures

General disclosures: All recommendations given by Erste Group Research are independent and based on the latest company, industry and general information publicly available. The best possible care and integrity is used to avoid errors and/or misstatements. No influence on the rating and/or target price is being exerted by either the covered company or other internal Erste Group departments. Each research piece is reviewed by a senior research executive, the rating is agreed upon with an internal rating committee of senior research executives. Erste Group Compliance Rules state that no analyst is allowed to hold a direct ownership position in securities issued by the covered company or derivatives thereof. Analysts are not allowed to involve themselves in any paid activities with the covered companies except as disclosed otherwise. The analyst's compensation is primarily based not on investment banking fees received, but rather on performance and quality of research produced.

Description of specific disclosures:(1) Erste Group and/or its affiliates hold(s) an investment in any class of common equity of the covered company of more than 5% (for Croatian companies 1%). (2) Erste Group and/or its affiliates act(s) as market maker or liquidity provider for securities issued by the covered company. (3) Within the past year, Erste Group and/or its affiliates have managed or co-managed a public offering for the covered company. (4) Erste Group and/or its affiliates have an agreement with the covered company relating to the provision of investment banking services or have received compensation during the past 12 months. (5) Erste Group and/or its affiliate(s) have other significant financial interests in relation to the covered company.

Erste Group rating definitions

Buy Accumulate Hold Reduce Sell

> +20% to target price +10% < target price < +20% 0% < target price < +10% -10% < target price < 0% < -10% to target price

Our target prices are established by determining the fair value of stocks, taking into account additional fundamental factors and news of relevance for the stock price (such as M&A activities, major forthcoming share deals, positive/negative share/sector sentiment, news) and refer to 12 months from now. All recommendations are to be understood relative to our current fundamental valuation of the stock. The recommendation does not indicate any relative performance of the stock vs. a regional or sector benchmark.

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This research report was prepared by Erste Group Bank AG (”Erste Group”) or its affiliate named herein. The individual(s) involved in the preparation of the report were at the relevant time employed in Erste Group or any of its affiliates. The report was prepared for Erste Group clients. The information herein has been obtained from, and any opinions herein are based upon, sources believed reliable, but we do not represent that it is accurate or complete and it should not be relied upon as such. All opinions, forecasts and estimates herein reflect our judgment on the date of this report and are subject to change without notice. The report is not intended to be an offer, or the solicitation of any offer, to buy or sell the securities referred to herein. From time to time, Erste Group or its affiliates or the principals or employees of Erste Group or its affiliates may have a position in the securities referred to herein or hold options, warrants or rights with respect thereto or other securities of such issuers and may make a market or otherwise act as principal in transactions in any of these securities. Erste Group or its affiliates or the principals or employees of Erste Group or its affiliates may from time to time provide investment banking or consulting services to or serve as a director of a company being reported on herein. Further information on the securities referred to herein may be obtained from Erste Group upon request. Past performance is not necessarily indicative for future results and transactions in securities, options or futures can be considered risky. Not all transactions are suitable for every investor. Investors should consult their advisor, to make sure that the planned investment fits into their needs and preferences and that the involved risks are fully understood. This document may not be reproduced, distributed or published without the prior consent of Erste Group. Erste Group Bank AG confirms that it has approved any investment advertisements contained in this material. Erste Group Bank AG is regulated by the Financial Market Authority (FMA) Otto-Wagner-Platz 5,1090 Vienna, and for the conduct of investment business in the UK by the Financial Services Authority (FSA).

Notice to Turkish Investors: As required by the Capital Markets Board of Turkey, investment information, comments and recommendations stated here, are not within the scope of investment advisory activity. Investment advisory service is provided in accordance with a contract of engagement on investment advisory concluded between brokerage houses, portfolio management companies, non-deposit banks and clients. Comments and recommendations stated here rely on the individual opinions of the ones providing these comments and recommendations. These opinions may not fit to your financial status, risk and return preferences. For this reason, to make an investment decision by relying solely to this information stated here may not bring about outcomes that fit your expectations.

Please refer to www.erstegroup.com for the current list of specific disclosures and the breakdown of Erste Group’s investment recommendations.

Looking ahead


Company Spec. Disclosures*

Company Spec. Disclosures*

Company Disclosures

A&D Pharma Komercni banka 2, AB SA 2, KrkaACE Kulczyk Oil Ventures 3, Action SA Lenzing 4, Agora Lotos GroupAgrana LPPAik Banka AD Magyar TelekomAkbank Mayr-Melnhof 2, Akenerji Elektrik Uretim AS Mennica PolskaAksigorta MOLAlbalact Mostostal WarszawaAlbaraka Turk Multimedia PolskaAllami Nyomda NeucaAmbra New World Resources 2, AmRest NG2Anadolu Hayat OMV 2, 3, Anadolu Sigorta Orco 2, 4, Andritz OTPAntibiotice 2, PalfingerApator Pankl RacingArcelik PannErgyAsseco Poland PBG S.A.AT&S Pegas NW 2, A-Tec PetkimAtlantic Grupa 2, Petrom 4, Atlantska plovidba PGEaustriamicrosystems PGFAustrian Airlines 2, Philip Morris CR 2, Austrian Post 2, PKN OrlenBanca Transilvania PKO BPBank Asya PodravkaBank Pekao PolimexBerling 3, ProspectiuniBIM PZUBiofarm RafakoBioton Raiffeisen Bank International 2, BRD-Group SG RFVBRE Bank RHI 2, 4, BWT 2, Richter GedeonBZ WBK S Immo 1, 2, 4, 5, CA IMMO S&T 2, CA IMMO International SanochemiaCAToil SBO 2, CEDC SekerbankCersanit SemperitCEZ 2, 3, 4, SIF 1 Banat Crisana 5, Ciech S.A. SIF 2 Moldova 5, Cinema City SIF 3 Transilvania 5, CME 2, 3, 4, SIF 4 Muntenia 5, CNG SIF 5 Oltenia 5, ComArch Sinpas REITconwert Sojaprotein ADCWT STRABAG 2, 3, 4, Cyfrowy Polsat SygnityDanubius Hotels SynthosDO & CO 3, T-Hrvatski TelekomDuda Telefónica O2 CR 2, ECO Business-Immo Telekom Austria 2, 3, Egis Telekom SlovenijeEmperia Holding TeraplastEmpik TofasEnergoprojekt TPSAEricsson Nikola Tesla Trakcja PolskaEurocash TranselectricaFarmacol TransgazFerrovial SA TuprasFHB TurbomecanicaFondul Proprietatea 2, Turcas Petrol ASFord Otosan Turk Ekonomi BankFortuna Entertainment 2, 3, 5, Turk Telekomunikasyon ASFX Energy Turkcell Iletisim Hizmetleri ASGaranti Bank Turkiye Sinai Kalkinma BankasiGorenje TVNGraal Unipetrol 2, GTC Uniqa 2, Gunes Sigorta VakifbankHalkbank Verbund 2, 4, Immoeast 2, Vestel Immofinanz Vienna Insurance Group 2, 3, 4, Impact Vienna Int. Airport 2, INA Vistula GroupInstitut IGH voestalpine 2, 4, Inter Cars Wienerberger 2, Intercell 2, 4, WinterthurIs REIT WolfordIsbank Yapi Kredi BankJutrzenka Yapi Kredi SigortaKapsch TrafficCom 2, 4, ZA Pulawy S.A.KGHM ZCh Police S.A.Koc Holding Zorlu Enerji Elektrik Uretimi ASKoelner Zumtobel 2, Komercijalna Banka* Specific disclosures if applicable

CEE Equity Monthly - wall- · PDF fileCEE Equity Monthly September 2011 More of the same?!...

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