Νο.1 @9:45πμ – Το χρηματιστηριακό σημειωματάριο του μικρομέτοχου (10 Ιουνίου 2020)
Beta Sec – Daily report 10-06-2020
Bank stocks continued their advance on Tuesday, while investor attention was focused on the benchmark bond issue, but non-banking stocks dragged the main index lower at the start of this four-day trading week at Athinon Avenue. General index ended at 678.68 points, shedding 0.70% from Friday’s 683.46 points.
The large-cap FTSE 25 index contracted 0.65% to 1,641.20 points. Nevertheless the banks index expanded 2 percent, with Alpha collecting 3.97%, Eurobank growing 1.85% and National grabbing 0.69%, while Piraeus parted with 1.61%. Motor Oil rose 3.43%, Ellaktor improved 2.33% and Fourlis advanced 1.41%, as Hellenic Exchanges gave up 1.63%, GEK Terna eased 1.47%, Athens Water (EYDAP) decreased 1.39%, Public Power Corporation shrank 1.38% and ADMIE Holdings dropped 1.20%.
In total 42 stocks registered gains, 71 sustained losses and 21 remained unchanged. Turnover amounted to €89.8m, just up on last Friday’s €89.7m.
As momentum lose steam we expect market to consolidate at current levels.
¢ In the Spotlight
Greece/New bond issue: Greece on Tuesday raised €3.0bn from capital markets through a successful completion of a 10-year bond issue which attracted significant interest. The interest of the 10-year bond loan was set at 1.55%, while bids submitted surpassed €16.5bns. It was the third time this year that Greece resorted to international capital markets, after a 15-year bond (2.5 billion euros at 1.88%) and a seven-year bond (2.0 billion euros at 2.0%).
BNP Paribas, BofA, Deutsche Bank, Goldman Sachs, HSBS and JPMorgan acted as underwriters of the issue. The bond issue will strengthen Greece’s cash, which, according to Finance Minister Christos Staikouras, totaled 36.6 billion euros at the end of March.
State bond yields eased further in the domestic electronic secondary bond market. The 10-year bond yield fell to 1.42% from 1.48% on Friday. The yield spread between the 10-year Greek and German benchmark bonds shrank to 1.74% from 1.80% last week with the German Bund yielding -0.32%. Turnover was 70 million euros of which 64 million were sell orders.
Greece/PDMA: Today the Hellenic Republic will auction 52 Weeks T-Bills, in book entry form, with maturity June 11, 2021. The amount to be auctioned is €1bn. Settlement date is June 12. During the auction non – competitive bids can be submitted up to 30% of the auction amount. On top of that, Primary Dealers can submit non-competitive bids up to another 30% of the auctioned amount, until June 11.
Greece/Trade Account Balance: The coronavirus lockdown weighed on Greek exports in April, with the biggest losses coming by way of the slump in fuel exports due to the drop in demand as well as the drastic cut in the rates of those products. Still, the same factors led to a slide in imports, narrowing the trade deficit. According to Hellenic Statistical Authority (ELSTAT) data released on Tuesday, the total value of exports came to €2.1bn in April, against €2.98bn a year earlier, a reduction of 30.6%. When fuel is excluded, the exports show a 10.5% annual drop to €1.94bn. The total value of imports amounted to €3.2bn, against €4.6bn in April 2019, a reduction of 30.5%, which resulted in the trade deficit declining 30.3%. The continued strong performance of Greek exports in categories such as food, olive oil and chemicals mitigated the losses from other categories and in several cases actually strengthened foreign customers’ confidence in Greek exporting enterprises. Chemicals enjoyed a 21.1% annual increase to €418.5mn, while food and livestock reached €406.2 million, rising 0.5%.
PPC: The company entered in MOU agreements with AB Vasilopoulos (food Retail Chain), Beat (Taxi services provider) and Fraport Greece (Greece’s main peripheral airport operator) for the provision of charging stations for electrical vehicles.
ADMIE (IPTO) HOLDING: The company informs that though its affiliate, ADMIE (IPTO) Group that on June 10 the contracts for the Crete – Attica Interconnection will be signed between Ariadne Interconnection, a 100% subsidiary of ADMIE (IPTO) Group and its contractors. The contractors for the cable sections of the interconnection amounting to €615mn, are NEXANS, PRYSMIAN and HELLENIC CABLES-NKT and the contractor for the Converter Stations amounting to €370mn, is the consortium SIEMENS – TERNA.
OPAP (Q1:20 results preview): OPAP will announce Q1:20 results today after market hours followed by a conference call tomorrow. Expectedly a weak quarter as 17 days lockdown period in Q1:20 will weight on OPAPs turnover. Specifically, the lockdown period accounts for 19% of business days while major leagues paused before the national lockdown, reducing activity in sports betting further. However, momentum in OPAPs games was satisfactory until the lockdown thus percentage figures are expected to settle in negative mid teen digits. In more details:
§ Wagers are forecasted lower at €899m vs €1.082,8m (-17% y-o-y). Note that wagers exclude VLTs net drop. Respective payout for the period is seen lower at 62.9% vs. 63.4% a year ago.
§ Sports betting gross gaming revenue is expected at €87.5m vs. €101.7m in Q1:19. Note that sports betting does not include any contribution from subsidiary Stoiximan.
§ Kino and numerical GGR are forecasted lower at €153.5m (19.9% y-o-y) on relatively tough comps
§ Instant and Passives are also seen down 21.3% courtesy of higher stock in agents after the strong holiday season.
§ Finally, VLTs are seen down 4.5% yet resilient performance is attributed to lower installed machines in Q1:19 (c20K) vs Q1:20 (25K).
§ All in, GGR is expected to reach €333.5m down 15.8%
§ Further down EBITDA will settle at €81.5m -27% y-o-y and net income will reach €33.5m down 41.4%
In the conference call we expect the group to provide update regarding the resume of operations. Also we expect some color regarding the ordinary dividend from FY:19 profitability. Note that according to the Greek law the minimum amount of net profits which OPAP could distribute is in the tune of 0.23 eur/share.
The following table summarise our estimates:
Conference Call Details: Thursday, 11th June 2020, 16:00 Greek time / 14:00 UK time
· GR Participants dial in: + 30 211 180 2000
· UK Participants dial in: + 44 0 800 368 1063
· US Participants dial in: +1 516 447 5632
QUEST HOLDINGS (Q1’20 review): Quest Group reported an inline set of Q1’20 results vs our estimates. Q1 2020 was not significantly impacted by Covid19, however April’s lockdown will hurt both April as well as Q2 and FY 2020 performance. Sales came in 18.2% higher to €147.748mn compared to €124.996mn in Q1’19 and vs our call for €144.4mn. In more details:
§ In the IT products segment sales surged 23.85 to €80.98mn with EBITDA decelerating 18.2% to €2.55mn on the back of the €1.4mn loss of last year’s provision reversal for intellectual rights.
§ In the IT services segment sales augmented 19.9% to €29.93mn on strong Unisystems performance both internationally and in the recovering domestic segment. EBITDA came in 7.9% higher to €1.3mn on a small EBITDA margin retreat by 50 bps to 4.3%.
§ In the postal services division sales advanced by high single digit growth (+9.7%) to €26.65mn with EBITDA margin improvement by 60bps leading Q! EBITDA figure up 14.6% to €3.84mn.
§ In Cardlink (Electronic transactions) sales fell 13.4% to €8.15mn as a result of POS maturity stage and new banks agreement including revenue discounts for the years 2018-2020 and lower prices during its renewed duration (2020-2024). Cardlink’s EBITDA followed in a narrow path coming in 10.9% lower to €3.16mn on a strong 38.8% EBITDA margin.
§ In the energy division increased y-o-y capacity resulted in doubling top line to €1.9mn sales mitigating the increase to EBITDA which came in at €1.56mn on a resilient 82% EBITDA margin. The current total installed base is circa 26MW with 14.5MW’s rendering y-o-y comparison very favorable.
§ Group EBITDA accelerated at a milder pace, up by 6% y-o-y to €12.6mn, in line with our estimate for €12.46mn and higher than last year’s €11.845mn figure. Recall that Q1 2019 EBITDA was boosted by extraordinary profits of €1.4mn related to reversal of provision for intellectual rights in the IT products segment (related to ISquare and Infoquest Techologies).
§ Finally, Net income after minorities marginally declined 1.3% to €4.355mn compared to €4.412mn and our estimate for €4.89mn.
§ Net Cash came in at €5.3mn compared to €5.3mn in FY’19, a reduction mainly to seasonality of business requiring increased WC needs during Q1. Capex in Q1 stood at €3mn, €1.3mn higher y-o-y directed to the acquisition of a new solar energy park (€1mn) and ACS new hub infrastructure development.
§ Management guided for the Covid19 impact on the Group indicating that it is manageable, partly due to businesses diversification. In specific:
§ IT products with the sale and distribution of Apple products will be the most severely affected segment (due to retail stores lockdown for the whole April and the loss of Easter period sales) partially offset by higher internet channel sales (YOU), state measures to mitigate COVID-19 crisis impact (rent and labor regulations) and receivables timely payment.
§ IT services segment is not influenced particularly from the pandemic.
§ Picture in postal services is mixed with courier services (accounting for 87% of ACS sales) elevated both in April and May and postal services down by double digit (11% of ACS sales) leaving April sales at Q1 levels (high single digit growth). ACS increased activity will be impacted though by higher costs regarding its operations (extra financial assistance to the company’s agents, increased hires and overtime costs, urgent rents of storage spaces, and costs for new equipment) hurting its EBITDA profitability line in Q2.
§ Electronic payments in April are down by double digit as a result of the new agreement with banks and the lockdown (fewer transactions) by around 10% yet the outlook remains positive (for the FY) since the post Covid19 habits seem to favor the use of cards against cash. During May transactions sharply recovered to last year levels.
§ Energy sector is not disrupted at all regarding its operations from the COVID19 and the added capacity (+14MW’s y-o-y in 2020) is expected to boost both revenues and profitability.
Overall a strong set of Q1’results with limited impact mainly caused by the Cardlink and IT products businesses related to COVID19, which is expected to strengthen in Q2 but limited in the FY’20 picture. We will revert with an update. We have an Overweight Recommendation on Quest Holdings trading at FY20 PE 11.2 and EV/EBITDA 4.1x.
The following table summarizes Quest’s Holding Q1’20 financial performance vs our estimates:
Conference Call Details: Wednesday, 10th June 2020, 16:00 Greek time / 14:00 UK time
· GR Participants dial in: + 30 213 009 6000
· UK Participants dial in: + 44 203 059 5872
· US Participants dial in: +1 516 447 5632
NBG: The bank called for its AGM on June 30. Amongst the regular issues of the meeting NBG shareholders are asked to approve share buyback and authorize BoD to decide on rights issue, bonds issue and warrants.
Fourlis: On June 5, the company bought 3,000 own shares at €3.84/share for a total consideration of €11.520K. Fourlis now commands 429,654 own shares or 0.8262% of share capital.
Mytilineos: On June 5, the company bought 70,000 shares at €7.9693/share for a total consideration of €557.850K. Treasury stock now amounts to 300,000 shares or 0.21% of share capital.
Terna Energy: On June 5, the company bought 36,934 own shares for a total consideration of €353.871K (€9.58 avg price per share).
Autohellas: Main shareholder and CEO Mr Vassilakis bought 15K shares of the company for €61.9K (€4.12/share).
Sunlight: The company will fully repay its €50mn bond loan with last trading session being June 17.
B&F: The company concluded its bond by back program by acquiring in total 2,273 bonds at €877.67/bond average price. The company cancelled 740 bonds (2.96% of the issue) and now controls 1,533 bonds (or 6.32% of the issue).
PETROPOULOS: AGM on June 29.
KEPENOS MILLS: The company trades ex FY 2019 gross dividend €0.053/share (net €0.05035/share) on July 15 with payment concluded on July 21.
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