Greek Market Watch: PPC, Piraeus Financial Holdings, Alpha Services and Holdings, Jumbo, Coca Cola HBC, Athens Airport

Market Comment

ATHEX headed south yesterday, after six consecutive sessions with gains, in line with the European stock markets. In more detail, the General Index dropped by 0.47% at 1,397.14 units, (FTSE Large Cap: -0.77%, FTSE Mid Cap: +0.39%, Banks Index: -1.61%) and the traded value was shaped at EUR 232.0m, up from Tuesday’s EUR 177.9m. We expect ATHEX to try to move higher today, eyeing the international markets. 

Today’s Headlines

·         EC accuses PPC over predatory pricing in the Greek wholesale electricity market; we don’t expect any immediate and major negative impact

·         Piraeus targets net credit expansion growth of 5%-6% over 2024-2026-Press

·         Alpha Services and Holdings Stock Options Rights

·         Jumbo sales up by 4% y-o-y; Guides for sales growth of 8-10% in 2024e (positive)

·         Coca Cola HBC appointed new CFO

·         Athens Airport to enter ATHEX indices 

Company Headlines 

  • EC accuses PPC over predatory pricing in the Greek wholesale electricity market; we don’t expect any immediate and major negative impact

The EU released yesterday its preliminary view that PPC has breached EU antitrust rules by selling electricity in the Greek wholesale market below cost, thereby excluding its main rivals. The EC accuses PPC that during 2013-19 it abused its dominant position on the Greek wholesale electricity market by supplying the electricity generated by its thermal plants (i.e., lignite and gas) at prices below their variable costs. If the EC concludes, that there is sufficient evidence of an infringement, it can impose a fine of up to 10% of a company’s annual worldwide turnover. It is noted however that this preliminary view does not prejudge the outcome of an investigation. In response to EC’s accusation PPC notes that the said period was before the company’s transformation into a modern and sustainable energy company.

Exercise on potential Impact on PPC | Based on the table below, past experience suggests that IF and entity (and only then): a) there is 5% chance that the max amount fine is 10% of revenues, and b) there is 64% chance that fine is <1% of revenues. That said, and based on our projected Group Turnover for 2024-26e of c.EUR 10bn, and IF any fine will imposed on PPC, there is 64% chance that this would be less than EUR 100m, or <EUR 0.26/share. It is noted that this procedure will most likely take time, at least 2-3 years according to similar cases.

  • Comment  | We consider today’s sharp drop in PPC; share price (-4%) as excessive, a) considering that the said investigation refers to the past, with no impact on the company’s business model and investment programme, and b) taking into account that this investigations is ongoing over the past seven years, with no final conclusions expected in the short term and c) most likely, even if EC imposes a fine on the Company, the negative impact will most likely be minor. That said, and also taking into account that PPC appears deeply undervalued in 2024-25e EV/EBITDA (trades at a c29-39% discount), we reiterate our BUY recommendation on the stock, with a TP at EUR 17.40 (45% upside). 

Piraeus targets net credit expansion growth of 5%-6% over 2024-2026-Press

Press reports (newmoney) indicate that Piraeus will announce on 14 February that it targets net credit expansion to grow by 5.0% to 6.0% per annum over 2024e-2026e, in line with our estimates and the NPE ratio to drop to 3.5% vs. 5.5% in 9M2023.  Piraeus is our top pick in the sector with TP of EUR 5.00/share, implying 32% upside potential.

  •  Alpha Services and Holdings Stock Options Rights

Alpha Services and Holdings announced that 1,142,026 Stock Options Rights were exercised (0.049% of the share capital), with a nominal value of Euro 0.29 per share and amounted to EUR 336,003.62. Following the above share capital increase through payment in cash, the share capital of the Company amounts to EUR 682,323,512.13, divided into 2,352,839,697 common, registered shares with voting rights and a nominal value of EUR 0.29 each. We reiterate our Buy rating on the stock and TP of EUR 2.10/share, implying 22% upside potential.

  •  Jumbo sales up by 4% y-o-y; Guides for sales growth of 8-10% in 2024e (positive)

Jumbo released yesterday January sales up by 4% y-o-y on tough comparables, guiding for FY24e sales growth of 8-10% (in line with our 2024e sales estimate of EUR 1.18bn). In particular, Greece sales were up by +3%, Cyprus was flattish y-o-y, while Romanian and Bulgarian exhibited strong growth of 10% and 8% respectively.

  • Additionally, Jumbo during yesterday’s EGM approved the distribution of an extraordinary DPS of EUR 0.6 (2.3% DY, ex-date 19 March, Payment on 26 March).

During yesterday’s EGM, the management reportedly (Capital.gr) stated that the Company has temporarily suspended the supply from cargo ships from the East, as the freight costs have tripled, so as to keep prices for its consumers at low levels.

Additionally, the management said that the company will distribute 30% of net earnings (that is c. EUR 0.72/share on our expected 2024e net profits of EUR 311m, below our EUR 1.72/share dividend estimate). 

  • Coca Cola HBC appointed new CFO

The company announced that Mr. Anastasis Stamoulis will replace Mr. Ben Almanzar as the new Group Chief Financial Officer with effect from 1 May 2024. Mr. Stamoulis has a proven track record and broad experience gained from 16 years with Coca-Cola HBC where through his development journey he held several senior financial positions, including as CFO in several of the Company’s operations, as Group Financial Controller, Group Financial Operations and as Head of Strategic Finance and FP&A. Recall that the company is scheduled to announce FY2023 results on Wednesday 14 February at 09:00 Athens/ 07:00 GMT Time and management will host a conference call on the same day at 11:00 Athens/09:00 GMT Time.  

  • Market Headlines 

Athens Airport to enter ATHEX indices

Athens Airport will be included in ATHEX composite and ATHEX total return composite indices with effect from Monday, 12 February. 

Calendar of Events

Macros

09/02/24 | Industrial Production Index DEC

14/02/24 | Import Price Index in Industry DEC

15/02/24 | CPI JAN & Evolution of Turnover of Enterprises (4Q23 & DEC)

FY23 Results

14/02/24 | Piraeus Financial Holdings, Coca Cola HBC

22/02/24 | OTE

28/02/24 | Ideal Holdings (Flash Note)

29/02/24 | HELLENiQ ENERGY, Entersoft

06/03/24 | Optima bank

07/03/24 | Eurobank Holdings

11/03/24 | Sarantis

EGM / AGM

13/02/24 | GEKTERNA (EGM)

20/02/24 | Entersoft (EGM)

Ex-Dividend

19/03/24 | Jumbo (extraordinary cash distribution EUR 0.60/share)

Ex-Capital Return

26/03/24 | Alpha Real Estate Services (EUR 2.20) 


Research Department
Equity Research 

Τ: 210 8173 383 F: 210 3279 287 E: [email protected]

32 Aigialeias & Paradissou str., 15125, Maroussi optimabank.gr

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