Even more dirt cheap shares in Budapest


Analyst recommendations were prepared for new medium-sized domestic companies, and updates were published following the quick reports. All agree that they have set price targets that are much higher than the current stock price. But there are also risks.

Slightly reduced for the Alteo target

“We believe that the Russian-Ukrainian war and the energy market turbulences have had a positive effect on Alteo, which was also reflected in the last few flash reports. Due to higher gas and electricity prices, the margins of renewable power plants are improving, but at the same time, the maintenance costs of these power plants are not will change significantly.

At the same time, the difference between the price of electricity and the price of natural gas widened significantly, which means that the market-based segment achieved an extraordinary profit,” wrote Csaba Debreczeni, senior capital market analyst at Magyar Bankholding Zrt. In the updated analysis based on the latest quick report, the one-year they still lowered their target price, from HUF 4,116 to HUF 4,058,

fHeas the changed risk-free interest rate and tdue to the net debt stock of the company.

There is a lot of uncertainty

Currently, it is a difficult task to see the “near future” of Alteo on the stock market, so all possible future scenarios can only be predicted with a large margin of error. Such as how

atwill ársáság remain a public company or become a private company?

The analyst also identified several other risk factors. In the current economic environment, the energy market turbulence seems to be over, at least temporarily. It is a difficult task to see the electricity market of the next 5-10 years, which greatly affects the company’s revenues and results, he noted.

Alteo’s exchange rate. Source: Tradingview.com. Additional exchange rates and graphs: Privátbankár Exchange rate finder.

The first semester was good

By the way, in the first half of 2023, Alteo increased its EBITDA by eight percent compared to the previous year and reached HUF 12.77 billion. Sales increased by 55 percent, from HUF 37.98 billion to HUF 58.85 billion. The main driving force behind the increase in income was the rising energy price, thus

  • the electricity and telecommunications fixed at a higher levelHePrices;
  • the Alteo Control Center (virtual erHemoh or “VPP”) is increasingHe capacity and income,
  • and the waste management segment is developingHedéce.

Is the value of AutoWallis extremely low?

AutoWallis trades at an extremely low 4.3 times EV/EBITDA and 3.3 times P/E multiples based on earnings estimates for 2024, wrote Attila Vágó, senior analyst at Concorde Securities Zrt., in connection with the company’s quick report. They therefore left their 12-month target price at HUF 205 per share, which represented a 90 percent upside potential compared to the exchange rate at that time. (Now about 84 percent.)

Analyzes of stock market shares of medium-sized companies
Company Target price Appreciation potential Stock price. Analyze. Date Recommendation
Alteo 4058 48% 2750 2023-08-30
AutoWallis 205 84% 111.5 2023-09-01 purchase
Danube House 800 44% 554 2023-09-01 purchase
Graphisoft Park 10.5 24% 8.5 2023-08-10 purchase
Source: Bet.hu

However, they noted that AutoWallis is unlikely to pay a dividend for quite some time, for at least two reasons. On the one hand, the company focuses on growth and therefore reinvests its entire cash flow (the funds it generates). On the other hand, “as long as external financing remains key to financing rapid growth, AutoWallis must maintain an adequate level of equity”. (In other words, you need a lot of loan collateral – ed.)

The car company met expectations

The brokerage maintains its Buy recommendation on AutoWallis. They also kept their EBITDA estimate for 2023 and 2024 at the same level. Their EPS (earnings per share) estimate is HUF 28.8 for 2023 and HUF 32.8 for 2024. According to the analyst, the second quarter results were “strong as expected”.

Your highlightHe growth fHe the reason is inflation in the Central and Eastern European region, the Opel and SsangYong vehiclesohthanks to vek’s wholesale tradeHe organic volume growth and the acquisitions of Net Mobilitás and Nelson Flottalízing wrote the analysis.

EPS was HUF 5.32, compared to HUF 4.76 in the same period of the previous year, which is also in line with their estimate.

AutoWallis rate. Source: Tradingview.com. Additional exchange rates and graphs: Privátbankár Exchange rate finder.
AutoWallis rate. Source: Tradingview.com. Additional exchange rates and graphs: Privátbankár Exchange rate finder.

Duna House is under review

Duna House (DH) was also analyzed by Concorde Értékpapír Zrt., according to Gaál Gellért, it is also worth buying with a target price of HUF 800. Which, however, he labeled “under review” because “it will be updated soon”. Could the worst be behind us? he asks the question.

Among the good news is that DH’s profit improved on a quarterly basis thanks to higher transaction and loan volumes. This increased the profit to HUF 23.6 per share. Net profit after taxes was HUF 569 million, HUF 17 per paper. (Of this, HUF 337 million is related to financial income.)

Cash reserves have decreased

The analysis sees an improvement in the Hungarian “core” business, even if this happened from a very low base. The management repeated its previous annual profit forecast of HUF 70 per share. Housing market demand is expected to accelerate in the second half of the year, as some subsidized loans will be phased out from 2024. The EBITDA of the Polish operation is also out of the red range.

The main negatives of the second quarter report are that DH’s cash reserves have decreased after the large dividend payment, which will moderate the financial income potential in the future. And sales of the Forest Hill project have slowed.

Duna House exchange rate. Source: Tradingview.com. Additional exchange rates and graphs: Privátbankár Exchange rate finder.
Duna House exchange rate. Source: Tradingview.com. Additional exchange rates and graphs: Privátbankár Exchange rate finder.

“Perhaps it is too early to speculate on the dividend”, but based on the company’s dividend policy, which includes a 45 percent payout ratio, the ordinary dividend per share could be around HUF 30, they write. In addition, you can distribute additional extra money to the investors around HUF 50-75, so a total of HUF 75-100 is expected. This can mean a dividend yield of 13-18 percent – which can be modified by M&A, i.e. mergers and acquisitions. And cash reserves provide opportunities for growth through acquisitions.

Twenty percent return a Parkat?

Graphisoft Park reported new good results – Wood & Company analyst Jakub Caithaml assessed the August quick report. The annualized FFO (return on cash flow from operations – ed.) in 2023 is 17 percent per year at the current share price. The real estate portfolio “offers an annual yield of around eight percent” (in euros – the editor), so this “represents a tangible buffer” compared to the 5.75-6.5 percent primary yield reported by leading real estate agents for offices in Budapest.

According to the analyst, a further increase in yield cannot be ruled out either, although the almost full utilization of the “Park” “testifies to the loyalty of the tenants”. But the indexation of rents also causes a continuous increase in rents. According to the analysis, the development of the gross leasable area (GLA) can increase the mentioned FFO yield to over twenty percent.

How much is the office worth if you are Hungarian?

By the way, the Hungarian office market is described as a place where turnover has fallen sharply, and the ideas of buyers and sellers rarely meet. But they hope that traffic will increase next year and that they will be able to get a clearer picture of the value of the properties.

THE stock is one of the most expensiveHezHebb adds valueHe mayHein the Central and Eastern European real estate universe summarize.

And the expected yield decline in the market in the next 3-6 months may further improve the sentiment regarding real estate stocks in the coming months.

Where do the analyzes come from?

The quoted analyzes were prepared in the framework of a program financed by the Budapest Stock Exchange. (“BÉT’s market development program for small and mid-cap stocks.”) Brokerage companies therefore receive remuneration for them. The vast majority of writings are only available in English.

Privátbankár.hu Kft. (privatbankar.hu) does not qualify about investment companies and commodity exchange service providers, as well as the rules for the activities they can perform solo CXXXVIII of 2007 Act (“Bszt.”) as an investment company, so the Bszt does not prepare and does not provide investment analyzes according to Bszt. investment advice for its users. The website content of privatbankar.hu (“Website Content”) reflects the private opinion of the authors, which reflect the position of privatbankar.hu valid at the time of publication, which may change in the future without prior notice. The website content is only informative, contains the main characteristics of the services and products concerned without any pretense of being complete, and serves only to attract attention. The displayed graphs, figures and images are for illustrative purposes only, privatbankar.hu assumes no responsibility for their accuracy and completeness. Privátbankár.hu Kft., as the operator of the privatbankar.hu website, as well as its editors, creators and authors, disclaim all liability for any direct or indirect damage resulting from certain investment decisions based on the website content. Therefore, before making your investment decisions, we ask that you be sure to obtain information from several sources and, if necessary, consult your personal investment advisor. Privátbankár.hu Kft. (privatbankar.hu) does not participate in any transaction that may result from the website content it has prepared for informational purposes for the given financial instrument, and thus its independence is preserved. It follows from all of this that, with the content of the Website or its publication, the Bszt., as well as the Directive of the European Parliament and the Council No. 2004/39/EC dated April 21, 2004, on the markets of financial instruments (“MIFID”) ) legal purpose is not violated.

The article is in Hungarian

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