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ΝATIONAL P&K SECURITIES S.A.

GREEK INVESTMENT BOOK 2010

E Q U I T Y R E S E A R C H
DECEMBER 2009
I N V E S T M E N T B O O K D
EQUITY RESEARCH

21 December 2009
GREEK INVESTMENT BOOK 2010 INVESTMENT BOOK

Equity strategy • Market positive – structural reforms in sight


• Attractive valuations across sectors
• Variety of early cycle, defensive and limited Greek exposure plays
• Adverse macro may impact disposable income and earnings

Macro strategy • International demand to lower extenal imbalancies


• Monetary conditions in EU area improving
• Pessimistic scenarios already priced in for financial assets
• Widening deficit and public debt undermine confidence in the economy
• Fiscal tightening may postpone capital formation for investment purposes

Investment • Economic reforms a key catalyst for banks/market rebound


Calls • Positive on Energy (RES), non residential construction and banks
• Top picks include Bank of Cyprus, Coca Cola Hellenic, Ellaktor, Metka

Valuation ratios
Chng Chng P/E EPS chng P/BV EV/EBITDA Div.Yield GDP CPI Exch. 10-yr
WTD YTD 2010e 2010e 2010e 2010e 2009e Growth ‘10e Rate ‘09e Bond y.
(%) (%) (x) (%) (x) (x) (%) ‘10e (%) (% eop) (€ eop) ‘09e (%)
Greece 5.5 24.4 9.5 5.0 1.2 6.4 4.1 (0.3) 2.5 1.4 n.a.

* The exchange rate ‘09e applies to USD/EURO rate. Source: National P&K Securities, Finansinvest, ETEBA Romania and NBG estimate
**Valuation multiples are based on National P&K Securities Watch list.
***Closing price, WTD and YTD refer to the General Index.

National P&K Research Team


+30210 7720 000
research@nationalpk.nbg.gr

Please refer to important disclosure at the end of the document


INVESTMENT
BOOK

EXECUTIVE SUMMARY
The end of the year finds Greece at a critical juncture. The dramatic widening in the budget
deficit to 12.7% of GDP in 2009 reflects the unwelcome combination of declining government
revenues and sizeable spending slippages. The international economic crisis made fiscal
constraints far more binding contributing to the rise of sovereign debt to record levels of 113%
of GDP.
The main challenge for the newly elected government is to implement measures of a
permanent nature including a revision of the social security system, as well as initiatives that
will help gain control of the extensively inefficient public spending regime, and measures that
will help curb tax evasion. An ambitious €2.5bn privatization program for 2010 will provide
additional comfort in meeting targets as will a commitment to growth achieved by tackling the
red tape and boosting liquidity.
On the other hand, investors have viewed government’s recent announcements with caution
given a row of successive revisions of Greek statistics, in the recent past. We subscribe to a
more positive view as we believe the Government has the clout and the social support that will
enable it to implement its proposed spending cuts and pension system revision initiatives.
Greece has successfully walked through a similar convergence path during the period of 1993-
‘99 in the run up for its Euro entry with Debt/GDP ratios above 100% and double digit deficits.
This time, EU supervision will ensure macroeconomic progress is followed through.
Key catalyst ahead is the Stability and Growth plan, to be released in January 2010, which will
detail the specifics for a successful implementation. This is the premise for our base case
scenario that calls for GDP decline of 0.3%, core inflation of 2.1% and a stock market upside of
roughly 20% for the FTSE 20 index over the next twelve months.
The recent underperformance of the Greek stock market has brought valuations to seven-year
lows relative to Euro stocks. Moreover, supportive factors for the key energy sector and
domestic concessions, improved balance sheets for Greek & Cypriot banks and opportunities
from a variety of early-cycle and defensive themes further increase our confidence in the Greek
market’s prospects. As the tides turn over the course of next year and the economic landscape
improves, we are looking forward with optimism to 2010.

Theodore Ritsos
Research Director
National P&K Securities

Page 2 Please refer to important disclosure at the end of the document


CONTENTS

Macro Strategy
Nick Magginas, PHD Sizeable fiscal imbalances blur Greece’s growth prospects 4

Equity Strategy
Theodore Ritsos Upside potential will be fuelled by country wide reforms 8
Kostas Ntounas

Sector Updates
Banks - Spread management and asset quality improvement to drive both earnings and prices 13
Panagiotis Kladis, CFA higher

George Vitorakis Gaming - Reform, now a not so distant scenario 15

Theodore Ritsos Telecoms - Mobile pricing pressures likely offset by weaker fixed line competition 16

Kostas Ntounas Industrials / Materials - Stocks to start pricing in gradually improving business environment 17
Victor Labate

Victor Labate Oil & Gas - Recovery in middle distillates and petrol station network expansion 18

Ioanna Katsoula Retail/Consumer Goods - Tough macroeconomic conditions will put pressure on consumer 19
spending –value for money concepts will prevail

Selected List 21

Watchlist Statistics 23

Company Index
Aegean Airlines 24 Iaso 46
Agricultural Bank of Greece 25 Intracom 47
Alapis 26 Intralot 48
Alpha Bank 27 Jumbo 49
Autohellas 28 Korres Natural Products 50
J&P Avax 29 Marfin Popular Bank 51
Coca Cola Hellenic 30 Metka 52
Corinth Pipeworks 31 Motor Oil 53
Bank of Cyprus 32 Mytilineos Holdings 54
Duty Free Shops 33 OPAP 55
Ellaktor 34 OTE 56
EFG Eurobank Ergasias 35 Piraeus Bank 57
EYATH (Thessaloniki Water) 36 PPA 58
EYDAP (Athens Water) 37 PPC 59
Folli Follie 38 S&B Industrial Minerals 60
Forthnet 39 Sarantis 61
Fourlis 40 Sidenor 62
Frigoglass 41 Terna Energy 63
GEK Terna 42 Titan Cement 64
Hellenic Exchanges 43 Viohalco 65
Hellenic Petroleum 44
Hellenic Postbank 45

Page 3 Please refer to important disclosure at the end of the document


Macro Strategy
Greece
Sizeable fiscal imbalances blur Greece’s growth prospects

Key Figures
2008 2009e Latest 2010e
REAL SECTOR
Investment positives GDP per Capita (€) 21672 21140 … 21310
GDP growth (real, %, y-o-y) 2.0 -1.2 -1.6 (Q3) -0.3
The considerable improvement in liquidity conditions in the euro area in
conjunction with higher domestic inflation, will keep the cost of funding at
LEADING INDICATORS
attractive levels while Greek households are not going to experience an PMI 50.4 45 47.3 Nov …
austere de-leveraging process. Consumer Confidence -45. 8 -46.0 -38 Νοv …
Construction Confidence -9.6 -40.3 -31 Nov …
The economy will benefit from the improvement in international demand and
especially from the recovery of the economies in euro area and SE Europe,
EXTERNAL SECTOR
while the size of external imbalances of the economy will decline.

A very pessimistic scenario for the near and medium-term prospects of the
Greek economy has been already incorporated in valuations of Greek
financial assets and any progress in the front of fiscal consolidation or CA Balance (% GDP) -14.6 -10.5 -1.5(Q3) -8.5
structural reforms, could improve significantly the macroeconomic outlook of FDI (% of GDP) -0.7 -0.9 0.17(Q3)
...
the country.

Investment negatives EMPLOYMENT


Unemployment rate (%, aop) 7.7 9.7 9.0 (Aug) 10.2
The dramatic widening in General Government deficit to 12.7 per cent of Employment rate (%, aop) 61.9 ... 61.6 (Q2) ...
GDP in 2009, from an upwardly revised 7.7 per cent in 2008, reflecting PRICES
declining revenues as well as considerable expenditure slippages in CPI (%, y-o-y, eop) 2.2 2.7 2.0 (Nov) 2.5
conjunction with the elevated public debt, undermine domestic and Core Inflation (%, y-o-y,aop) 3.4 2.4 2.0 (Oct) 2.1
international confidence with respect to the near-term prospects of the
economy.
FISCAL POLICY
Economic activity will remain in negative territory in H1:2010 and will be Fiscal Balance (% GDP) -7.7 -12.7 … -9.1
followed by a tepid recovery which will be mainly based on improving Government Debt (% GDP) 99.2 113.4 … 120.8
external demand and favorable base effects, while domestic demand will
remain weak against a backdrop of intensifying efforts for fiscal consolidation
MONETARY POLICY
and stagnated wages. Reference Rate

A high degree of uncertainty and a significant tightening of fiscal stance will


push back the expected recovery of fixed capital formation to H2:2010 for
business investment and even later for residential construction. INTEREST RATES

Euribor 3-m 4.6 1.2 0.7 Νοv ...

Catalysts 10-yr bond yield (%, eop) 5.1 ... 5.12 (1-9/12)

The successful implementation by the Government of 2010 budget and the


announcement of additional measures of more permanent nature, including a EXCHANGE RATES
revision of the social security system in conjunction with additional structural Exchange Rate: USD (eop) 1.39 1.45 1.48 1.49
reforms, could reverse sharply the current depressed outlook of the
Nom. Effect. Exch. Rate (aop) 103,4 104.4 105.2Oct …
economy.

TAX RATES
Corporate tax rate (%) 25 25 … 25
Personal income tax rate-
Central Bracket (%) 29 27 … 25

Nick Magginas, Ph.D.


Strategy & Economic Research Division NBG
+30210 3341516

Page 4 Please refer to important disclosure at the end of the document


Weakening domestic demand and sizeable fiscal ...despite healthy household balance sheets and
imbalances blur Greece’s growth prospects improving liquidity conditions
In Q1:2009, the Greek economy entered its first recession since The relatively low leverage of Greek households and the stable
1993. Activity was held back by a broad-based decline in domestic valuation of the stock of housing wealth make Greek
and external demand, despite the support from loose monetary household budgets less vulnerable to the economic downturn
conditions and a significant fiscal impulse (reflected in the compared with other euro area countries, whereas improving
substantial widening of the fiscal deficit to an estimated 12.7 per credit conditions will be also supportive of economic growth.
cent of GDP in 2009 from 7.7 per cent of GDP in 2008).
Nevertheless, despite the considerable loosening of monetary
conditions, reflecting the maintenance of interest rates at
GDP Growth historically low levels by the ECB, in conjunction with the
implementation of extraordinary liquidity enhancement
8 8

forec as t s
measures, credit to the private sector has further decelerated
6 6 to 4.4 per cent y-o-y in October from 5.4 in September
4 4 although it remained significantly higher than the euro area
2 2 refecting a high degree of uncertainty surrounding household
0
spending decisions and investment prospects. This further
0
deceleration reflected the continuing slowdown in household
-2 ‐2 credit (which grew by 3.3 per cent y-o-y in October) as
-4 ‐4 consumer and mortgage credit slowed to 2.4 and 4.0 per cent
-6 ‐6 y-o-y respectively, from 3.3 and 4.4 per cent in the previous
month, whereas credit to enterprises has also slowed to 5.4
2000

2001

2002

2003

2004

2005

2006

2007

2008

2009f

2010f

per cent y-o-y from 6.8 per cent in September.


Indeed, in 2009, credit expansion to households is estimated to
Euro area SEE-5 Greece be very weak (3.5 per cent y-o-y in December 2009), down
from 14.5 per cent y-o-y in 2008, a reduction in the credit
Source: Eurostat and NSSG, NBG estimations stimulus from 4.7 per cent of GDP in 2008 to 1.3 per cent in
2009.

Private consumption: On a downward path since


Q4:2008…
Consumer spending remains under pressure with private Credit to the Private Sector
consumption in negative territory for 3 consecutive quarters starting 250 % GDP (as in September 2009)
from Q1:2009. Although the recent readings of forward-looking
indicators point to a significant improvement in consumer
200
sentiment, private consumption is unlikely to recover before mid-
2010, as rapidly deteriorating labor market conditions will continue
150
to weigh heavily on household spending decisions. Employment is
expected to be down by 1.6 per cent y-o-y in 2009 and an
additional 0.7 per cent in 2010. 100

Further downward pressure on consumer spending is expected to 50


arise from: i) the need to intensify the fiscal adjustment effort in
view of EMU commitments and the high debt burden of the order, 0
ii) the containment of wage costs in the private, as well as in the Greece Euro area Portugal Spain Ireland
public, sector with a view to sustaining employment, and iii) the
weakening of favorable terms of trade effects from falling energy
prices. In addition, in view of the highly uncertain environment,
household savings are expected to increase, putting further
downward pressure on consumption.

Private Consumption and Real Disposable 40 Nominal House Prices 40


Income (y-o-y % change)
6 6
30 30

5 5 20 20
forec as t s

10 10
3 3
0 0
2 2
-10 -10
0 0 -20 -20
1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008 (e)

-2 -2
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009f
2010f

Greece Spain Ireland

Private Consumption Real Disposable Income Source: Bank of Greece OECD

Source: NSSG, AMECO and NBG estimates

Page 5 Please refer to important disclosure at the end of the document


Investment spending: The end of a high investment The near-term The current account deficit is expected to
era shrink by almost 4 percentage points of GDP to 10.5 per cent
of GDP in 2009 and decline further to 8.5 per cent in 2010
The continuing retrenchment in construction activity – which
against a background of weaker domestic demand and
continues for a third consecutive year-- compounded by shrinking
recovering economic activity internationally. oil.
business investment, and still existing margins for additional
adjustment in inventories, are expected to exert a net drag of more
than 4 percentage points on economic activity in 2009, and about Current Account Deficit
16 16
0.4 percentage points in H1:2010 before reversing course in late-
2010. In this respect, investment spending as a per cent of GDP is
expected to undershoot its 20-year average of 21 per cent by more 12 12
than 4 percentage points, which along with the contraction in
employment will lead to negative implications for potential growth 8 8
(c. 2% annually in the medium term).
The recovery will be led by an improvement in business investment 4 4
by mid-2010, on the back of the improving international
environment and the concomitant bottoming-out of business 0 0
sentiment from the very low level of 2009, whereas the pick up in

2009f
2001

2002

2003

2004

2005

2006

2007

2008
residential construction will take hold in early 2011, as the stock of
unsold houses remains high and new tax measures on real estate
property are implemented, whereas the correction in house prices, CA deficit (%GDP)
from their peak in Q4:2008, is expected to be of the order of 10 per
CA deficit, excluding oil & ships (%GDP)
cent (peak to trough).
Source: BoG and NBG estimates
Investment as %GDP
The international economic crisis made fiscal
35 35 constraints far more binding
30 30
The dramatic widening in General Government deficit to 12.7
forec as t s

25 25 per cent of GDP in 2009, from an upward revised 7.7 per cent
20 20 in 2008, reflects declining revenues as well as considerable
spending slippages. On the revenue side, the decline in
15 15
revenues by about 0.8 of a percentage point of GDP compared
10 10 with 2008 mainly reflects: i) weakening domestic demand; ii)
5 5 lower-than-expected return of revenue measures; and iii)
continuing weaknesses of the tax collection mechanism,
1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

especially during a prolonged election period. Expenses were


also out of control – increasing by about 3.5 percentage points
of GDP, reflecting inter alia: i) higher-than-projected transfers
Greece Spain Ireland
due to the operation of automatic stabilizers; ii) an extensive
Source: AMECO and NBG estimates electoral cycle due to the successive European and national
snap elections, and iii) insufficient expenditure rationalization
Although private consumption and fixed capital formation appear to especially in a time of crisis.
have started bottoming out in Q3:2009, the fragile outlook of
consumer and business sentiment presages further declines in
GDP in Q4:2009 and Q1 or Q2:2010. The expected return of The main challenge for fiscal policy in 2009 is to implement
annual GDP growth in positive territory in H2:2010 will be mainly permanent measures, most importantly intensify efforts against
based on recovering external demand and favorable base effects, tax evasion, stop wasteful and inefficient spending and
while domestic demand will remain weak against a backdrop of improve public spending control. The 2010 Budget aims to
intensifying efforts for fiscal consolidation. reduce the deficit to 9.1 per cent of GDP in 2010 on the back of
an increase in government revenue of 2.0 pps of GDP and a
reduction in spending of about 1.5 pps of GDP. The
External imbalances start to unwind, helped by the Government is expected to back its request for a 3-4 year
economic downturn reprieve to correct the excessive deficit with a package of
The continuing shrinkage in imports is expected to more than measures of more permanent nature, including a revision of
compensate for the significant drop in exports of goods and the social security system, to be announced early next year.
services. Indeed, increasing signs of a faster than-initially-expected
stabilization of the world economy start confining the losses in Fiscal Table
tourism and shipping revenue in the vicinity of -9 y-o-y and -27 per 2005 2006 2007 2008 2009f* 2010f*
cent y-o-y, respectively, in Q3:2009, from nearly -16 and -33 per General Government Balance -5,1 -2,9 -3,7 -7,7 -12,7 -9,1
cent, respectively, in H1:2009. Thus, the contribution of net exports
Primary Balance 1,7 2,7 1,4 2,0 3,2 3,2
on economic activity will be positive of the order of 2 per cent in
2009 and 0.2 per cent in 2010. In 2010, shipping revenue is Cycl. Adj. General Government Balance -5,7 -3,5 -4,8 -8,5 -11,4 -8,6
expected to increase by about 7 per cent annually, on the back of Ordinary Budget -3,3 -1,8 -2,9 -4,2 -9,2 -6,6
improving shipping market conditions and especially of significant Public Investment Budget -2,4 -2,1 -1,7 -1,9 -3,0 -2,6
improvements in the size and quality of the Greek fleet, whereas
Rest of General Government Budget 0,6 1,0 0,9 -1,6 -0,5 0,1
the recovery in tourism revenue will be marginal as severe cost
competition will continue to compress profit margins despite the Gross Debt 98,1 97,1 95,6 99,2 113,4 120,8
recovery in arrivals. Spread over 10-y Bund (period average) 18 bps 27 bps 28 bps 80 bps 185 bps …

Source: NSSG and NBG estimates


* MNEC and NBG estimates (in per cent of GDP)

Page 6 Please refer to important disclosure at the end of the document


Greek sovereign bond spreads have widened since Inflation pressures will remain muted despite the
November after the announcement of the new fiscal fading out of favourable base effects
situation
Headline inflation will remain muted in 2009, near 1.2 per cent,
The sustained improvement in investors’ risk appetite in while the core measure will stubbornly remain near 1.7 per
conjunction with liquidity enhancement measures by the ECB in cent despite the sizeable output gap (of the order of -1½ per
Q2:2009 had compressed liquidity and risk premia, driving the cent of potential GDP) , due to rapidly rising unit labor cost, by
spread of the 10-year Greek Government bond to an 11-month 4 per cent y-o-y, and structural rigidities in domestic markets.1
low of 120 bps in September.
Nevertheless, the spread widened substantially in early
December to above 200 bps as a result of increasing worries
about the sustainability of Greek debt dynamics, the downward
revision in GDP growth for H1:2009 (by more than 0.7 per cent)
and the contraction of economic activity by 1.6 per cent y-o-y in
Q3:2009 in conjunction with the two consecutive downgrades of
the Greek sovereign debt by Fitch and S&P to BBB+ and an
increasing risk of an additional cut from Moody’s in coming
weeks.
18 General Government Deficit 18
(% GDP)
14 14

10 10

6 6

2 2
Source: NSSG and BoG
-2 -2

-6 -6
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009f
2010f

Major sources of uncertainty for 2010


Greece Euro area Spain ⇒ A further weakening of private consumption against a
Germany Ireland
backdrop of rapidly declining employment and intensifying
efforts for fiscal consolidation through increased tax
burden and stagnated wages
Source: European Commission Autumn Report and NBG estimates
⇒ A high degree of uncertainty and a significant tightening of
Greek sovereign debt pays an increasing borrowing fiscal stance could push further back the expected
premium in recent weeks due to a stricter recovery of fixed capital formation to early 2011 for
reassessment of fiscal imbalances and a business investment and even later for residential
concomitant credibility deficit construction
The spread over bunds is expected to be conditioned on near- ⇒ A new round of negative credibility effects and adverse
term developments in risk appetite and the progress on the fiscal feedbacks with other macroeconomic variables in the
consolidation front, whereas the probability of additional rating event of serious slippages in the implementation of 2010
downgrade (by Moody's and S&P) appears to have been, to a Government budget which could followed by a an
significant extent, incorporated in mid-December valuations of additional one-notch downgrade by rating agencies.
Greek government bonds (c. 240 bps). The achievement of fiscal
targets of 2010 budget and the credibility gains from potential ⇒ The Greek banking system remains healthy and well
announcement of structural economic measures in following capitalized although it cannot remain untouched by a
months could, ceteris paribus, bring the spreads significantly protracted period of high uncertainty and economic
down from their current extremely high levels. stagnation.
⇒ The continuation of a strong declining trend in imports in
Government Spreads against S&P Ratings conjunction with improving demand for Greek exports of
products and services
9 ES IE
NL
AAA NL ⇒ A stronger currently expected recovery of economic
AAA-7
FR FR activity in euro area and SE Europe.
S&P Ratings

AA+ BE BE
ES December 09
AA 5 IE
AA- PT
PT
A+ 3 IT IT
A GR
A- 1 January 08
BBB+ GR
-1

0 50 100 150 200 250 300


Spread over Bund
Source: Reuters

Page 7 Please refer to important disclosure at the end of the document


Equity Strategy
Greece
Upside potential will be fuelled by country wide reforms

The big picture will become positive


Trading Data
We maintain a positive market view for 2010, following the notable downturn in the 2007 2008 2009
Greek stock market at end Q4 ‘09. The sell off reflected a number of real Greek last
General Index 5,178 1,786 2,222
economy structural drags where however, investors have probably overlooked two chng (%) 18 -66 24
critical areas of public finances: Firstly, the relatively high waste in public sector and Market Cap (aop, € bn) 183 129 82
secondly, the magnitude of tax evasion. What has not been the case elsewhere, chng (%) 31 -29 -37
Greece continues to retain a pool of untapped potential which has never in the past Market cap / GDP (%) 80 53 34
been addressed by political agendas. Recent elections highlighted the extent of public Volume/Market cap (%) 65% 61% n.m
Daily volume (aop, €m) 472 316 206
endorsement for such an agenda, implying that society itself now stands behind the Free float (%) 50.7 48.4 61.7
reforms. This emulates somewhat how the G20 nations stood behind the measures for Foreign institutional (%) 39.7 32.4 34.1
a gradual global recovery, last March. Additionally, relative valuations for a number of Domestic FUM/GDP (%) 8.8 3.6 4.6
sectors have now reached very attractive levels, even assuming further negative Listed stocks (#) 293 262 230
revisions in 2010 earnings. Our base case scenario (based on GDP decline of 0.3%
and core inflation of 2.1% for 2010) implies a bottom up upside potential of 19% for
Valuation
the FTSE 20 index over the next twelve months.
2007 2008 2009e 2010e
EPS chng (%) 26 -10 0.3 5
Five reasons to buy Greek stocks in 2010 DJStoxx600 EPS chng(%) 5 -21 -14 25
Attractive valuation: The Greek market has been trading at a widening discount vs. P/E (x) 17.3 6.4 10.0 9.5
DJ Stoxx 600 P/E (x) 14.3 13.3 15.8 12.7
the DJ Euro Stoxx index. On pure valuation grounds, we spot opportunities in Earnings yield gap (bps) 3.9 7.5 n.a. n.a.
companies such as OPAP, PPC, Ellaktor, Bank of Cyprus, Alpha Bank and Eurobank EBITDA chng (%) -7 13.3 4.8 8.1
EFG. EV/EBITDA (x) 10.0 5.7 6.3 6.4
Dividend yield (%) 3.2 6.3 4.1 4.4
The government’s strong political will: In our view, there is a relatively high RoE (%) 32 38 26 26
probability that the government will succeed in improving public finances by tackling P/BV (x) 3.5 1.0 1.2 1.2
widespread tax evasion, spending in the public sector and the pension system deficit. Risk free (%) 4.5 4.7 5.2 5.2
Risk premium (%) 4.8 5.3 4.3 4.3
Supportive factors for the energy and construction sectors include the Public FTSE 20 2752 932. 1142 1363
Investment Programme (higher by ca 5% y-o-y), increasing pace of absorption of
subsidies and speed up in RES capacity additions. Transaction Data
Settlement T+3
Improved balance sheet for Greek & Cypriot banks by building equity reserves and 10% capital gains tax due 1/10
securing adequate liquidity resources. The macro turnaround will support profitability SE related taxes
cash dividend/stock options from1/ 09
and drive valuations higher. Fees to the SE 6bp per trade (4 goes to EXAE)
0.15% on positions purchased
A variety of early cycle, defensive plays and limited Greek exposure: We
highlight the resilient characteristics of OPAP (dividend yield and earnings clarity),
Ellaktor and Metka (top line visibility on high backlog and earnings power) and
Jumbo (value for money retail concept). Early cycle plays include Sidenor/Viohalco,
Titan, Mytilineos, S&B and Aegean Airlines while heavy foreign exposure is found
in CCHB, Intralot, Frigoglass, Bank of Cyprus and S&B.

Further Catalysts
Detailed structural reforms will be included in the Stability & Growth Program, due
by mid-January. They are likely to provide further macro support and confidence in the
economic recovery.
Updated and/or new business plans are likely to be presented by new management
teams in key names like PPC and OPAP as well as OTE. Increased visibility and
clarity for investment cases will be partly offset by the risk of governmental
interference.

Concerns
Adverse macroeconomic conditions and public finances could impact corporate
earnings. The most exposed sectors include financials, construction and retail. The
gaming and telecoms sectors should be largely unaffected.
Limited credit expansion and deteriorating asset quality could materially affect the
banking sector and the housing market.
Lower disposable income, on the back of increased taxes and unemployment, will
negative affect financials and retail stocks.
Increased government interference in the banking sector and in key state-controlled
companies (e.g. OPAP, PPC) could negatively affect market dynamics.

Page 8 Please refer to important disclosure at the end of the document


2010 Investment Themes
Valuation: Greek market trades at a discount Monetary Conditions and Interest rates
Following the liquidity crunch at the beginning of the year, markets
The charts below, which use forward P/E, show that the are starting to normalise while the ECB will start unwinding the
Greek market is trading at a discount (>25%) to the DJ Euro extraordinary measures taken during the crisis, gradually in 2010.
Stoxx Index. As demonstrated in the graphs, this could be Banks are tapping into wholesale markets again while deposit rates
construed as rather extreme, given past data (graph 2) and have declined substantially compared to H1 09. Looking forward,
the relatively small discrepancy in the respective EPS growth we believe that interest rates on deposits, which are the primary
estimates (graph 1). Having said that, we do point out that: source of funding for Greek and Cypriot banks (ie c63% of total
assets), will remain low reducing cost of funding. Interest rates,
ƒ The aforementioned discount is largely attributed to the which are projected to increase towards the end of 2010, will also
sharp correction (20-25%) witnessed in the Greek help banks to expand interest margins. Deposit rich banks like
market over the last month. NBG, Bank of Cyprus, Marfin Popular, ATE Bank and Hellenic
ƒ Earnings risk is relatively high given that corporate Postbank will benefit the most.
profits could prove to be quite sensitive to domestic
macroeconomic conditions and fiscal policy related Asset quality trends
measures. Asset quality, which was the key determinant for 2009 bank
profitability, will remain an important factor for 2010 earnings. The
Estimates Forward P/E and EPS Growth current year proved very tough with Greek, Turkish, and SEE
economies facing a sharp deterioration in economic activity.
for Greece Relative to DJ Euro Stoxx
Accordingly, quality of loan portfolios also deteriorated but not to
40% the extent that could raise viability concerns, as many investors
feared a year ago. Given the projected recovery in Turkey and SEE
we believe that NPL formation will decelerate and NPL ratio will
120% 20% peak by mid 2010. Therefore, cost of credit risk will be lower in
2010 in our view. We favour banks that have already shown some
progress on that front such as Eurobank, Bank of Cyprus and Alpha
110% 0%
USD/EUR rate: sustained weakness is likely
100% -20% We believe that the USD vs. the EUR is likely to remain weak (at
least in H1’10) as the Fed is expected to keep its rates roughly
unchanged for the first couple of months into 2010. Companies
90% -40% affected by such developments are: Refiners (MOH, ELPE),
Mytilineos Holdings, Titan, Intralot, Aegean Airlines, Jumbo and
Folli Follie.
80% -60%
P/E (L) Industrials: improving pricing environment starting from
70% -80% mid-2010
EPS Growth (R) We expect the increase in commodity prices starting from mid-2010
to also be accompanied by an increase in spreads on industrial
60% -100% products. Such an increase in spreads is anticipated to lead to a
99 00 01 02 03 04 05 06 07 08 09 10 material margin improvement especially for industrial companies
that have significant commodity costs (e.g. metal processors).
Commodity prices ($/ton)
Source: JCF
10,000 700
Copper (left axis)
9,000
600
Next 12 months P/E for Greece 8,000
Aluminium (left
axis)
vs. DJ Euro Stoxx 7,000
Zinc (left axis)
500
20 Steel (right axis)

6,000 400
18
5,000
16 4,000 300

3,000 200
14
2,000
12 100
1,000

10 0 0
2004

2005

2006

2007

2008

2009

8
Source LME, Metal Bulletin, Bloomberg.
6 More specifically, we expect a correction of 25% for copper prices
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 and of 15% for steel prices in H1’10, and then a subsequent
material increase in H2’10. We anticipate aluminium prices to
increase starting from beginning of 2010 as they remain below their
Greece (GR) DJ Euro Stoxx 10-year average. As a result, some companies that hold stocks of
copper and steel could incur inventory losses in H1’10 and make
Source: JCF
subsequent inventory gains in H2’10.

Page 9 Please refer to important disclosure at the end of the document


Interna
ational Expo
osure Cons
struction acctivity: Veryy weak ho
ousing markket vs.
spee
ed up in con
ncessions
GDP Growth
G (%) 2009f 2010f 2011f
2 The activity
a in thee domestic cconstruction sector
s is expeected to
Turkeyy -6.3 3.0 4.7 remain relatively poor throughou ut 2010 mainly due to a sustained
Roman nia -6.0 1.8 3.6 weakn ness in the housing
h markket. We note that building permits
Bulgariia -4.8 0.3 2.3 retrea
ated by 15.7 7% in the Jan-Aug ’09 period. A co ontinued
Serbia -3.4 1.4 3.4
weakn ness in the domestic
d markket will be neegative for companies
F.Y.R.OO.M. -1.2 1.6 3.5
Albania
a 2.0 3.1 4.7 like Titan
T Cement, Lafarge-He eracles Ceme ent, Viohalcoo Group
Ukrainee -13.6 2.1 4.0 (mainly Sidenor).
Source: NBG Economic Research
R On thhe positives, we see a prromising actio on plan, by thet new
goverrnment, for thee domestic co onstruction seector. Key theemes will
be:
International Exposure a) Speed
S up in the impleme entation of th he National Strategic
S
Reference
R Framework (NSR RF) 2007-2013 3.
60% b) Re-tendering
R o the Attica Ring Road ex
of xtension (expected at
50% yr-end
y ’10) andd tender for th
he Kasteli inte
ernational airp
port (due
40% out
o until summ mer ‘10).
30% c) Execution
E of PPPs.
20%
10%
Such developmentss are expecte ed to support construction
c a
activity in
Greecce with key beneficiaries being the sector’s majorr names
(Ellak
ktor, J&P Avaxx, Gek-Terna)..

Gove
ernment inte
erference & Privatisation Program
mme
Banks: Restriction
ns, political in
nvolvement
The plan
p imposes certain
c restricttions on the baanks such as a cap to
their asset
a growth (c.15%) as w well as the dis stribution of dividends
(at 35
5%), bearing inn mind that lasst year, the fin
nance ministe er did not
Source: National P&K allow banks to payy dividends a at all. Howeve er, most of the banks
have already exprressed their w willingness to exit the govvernment
Coca Cola
C Hellenic is one of the Greek
G compan nies with high suppo ort plan; we expect the majority of the banks un nder our
exposurre to SEE. According
A to National
N P&K Estimates in coverrage to exit by H2 2010.
2009 circa 46.5% of the EBIT will come from SEE S countries
namely the Developiing and the Emerging
E segments of the Electricity: Dependent on gove
ernment decisions
Group, excluding Niggeria. We exp pect this to inccrease in the PPC's erformance is highly depen
s financial pe ndent on govvernment
coming years with thhe turnaround of the econo omies in SEE decisiions as man nagement nee eds to securre state apprroval on
while we
w also noticee that despite e the crisis the Company variou
us issues, suchs as: a)) tariff incre
eases, b) corporate
manage ed to increasse its markett shares in the t sparkling restru
ucturing, c) pottential break-u
ups into separrate legal entitties, and
beveragges category in 2008 in Eastern Europe. Therefore, d) investment progrrammes.
we believe that the Company is well positione ed to capture
future growth
g opportunities in thesse countries where
w it also ernment anno
Gove ounced privattization progrramme
has exccees productio
on capacity. In rec
cent speechess and presenttations, the Prime Minister and the
Frigogllass has the highest exp posure in Easstern Europe Finance Minister re eferred to the
e implementattion of a privatization
among the companie es in our univeerse, with a 51% exposure prograamme that ca an result in re
evenues of mo
ore than 1% of GDP.
for the group and c. 70% for the ICM businesss. We believe Key holdings
h in liste
ed companiess are demonstrated below.
that the
e exposure to o Eastern Eu urope is bene eficial as the
penetraation rate remaains at lower levels vs. Wesstern Europe, Commpany Mcap (€) Stake
and theere is remarkaable potential for
f growth in markets
m such OPAAP 4,989 34.4%
OTE 5,147 20.0%
as Russsia. PPC 3,071 51.1%
Sideno or and the Viiohalco group have a 40 0% and 35% enic Petroleum
Helle 2,537 35.5%
Agric
cultural Bank of Greece 1,675 77.3%
exposurre to Eastern n Europe resp pectively. We believe that
Helle
enic Postbank 1,206 44.3%
construction activity is
i likely to pick up in the Ba
alkans before Athens Water 618 71.6%
any reccovery in Gree ece. Thereforre, we anticipaate Sidenor’s eus Port Authoriity
Pirae 388 74.5%
exposurre to Eastern Europe to increase and th he expansion Helle
enic Duty Free 326 20.1%
in the re
egion to drive volume growtth next year. Thesssaloniki Water 178 74.0%
Thesssaloniki Port Au
uthority 146 74.3%
Euroba ank EFG and d NBG are th he banks with h the largest Sourc
ce: National P&K Securities
S
footprint in the SEE E region andd Turkey. Given the low
penetraation of the banking
b sector in these ecconomies we
Accorrding to our base
b case sccenario, a feaasible revenuue target
believe that positive earning surp
pises are likelyy for the two
would
d be €2bn. In addition, one e could expecct additional re
evenues
groups in 2010. Mo oreover Bankk of Cyprus and Marfin
from a potential prrivatization of the Public Gaas Company (DEPA),
Popula ar are also baanks that deriive most of th
heir earnings
e the Greek State has 65
where 5% participation. According g to the
outside Greece; mosst importantly form Cyprus and to lesser
FY’08
8 published financial acccounts, DEPA A’s BV amo ounts to
extent form
f SEE and Russia.
€1.22
2bn and net inccome reached d €120.5m, upp 53% y-o-y.

Page 10 Pleasse refer to impo


ortant disclosure
e at the end of th
he document
Earnin
ngs surprise
es/revision 2008
8-2012 Nattional Alloccation Plan (NAP) & Full
Althoug
gh Q3 results (like Q2) had d more positive surprises, Auctioning Sche
eme as of 2
2013
the earnings revision
n outlook is negative given
n the adverse ƒ The NAP P allows 32 24,807,009 emitted
e CO22 tones
macro environment.
e (338,567,7
709 if 2005-2 2007 allowan nces are add
ded), or
65,315,679 annually forr the entire cou
untry.

Earnings
s surprises ƒ Main CO22 emitting seectors/compannies (as a % of total
20
Negative
e Positive
NAP) are:
15
¾ Electricity
E geneeration (PPC): c. 71%
¾ Cement
C (Titan and Lafarge): c. 16%
10
¾ Refiners
R (ELPEE, MOH): c. 6%
%

ƒ PPC’s ann nual free allow wance is 44,354,531 tones (or 68%
5
of the country’s total am
mount).
ƒ PPC’s CO O2 emissions in FY’08 amo ounted to 52.7
7mil MT,
0
c. 18.8% higher
h than itss free allowanc
ce limit.
Q1'08

Q2'09

Q3'09
FY ‘06

Q1 ’07

H1 ’07

9M ’07

FY ’07

H1 ’08

9M’08

FY ’08

Q1 '09

Accorrding to the EU E directive on the green nhouse gas emission


e
allowa
ance trading scheme
s of the
e Community, full auctioning g should
So
ource: National P&K
be the rule from 2013
2 onwardss for the pow wer sector, takking into
Competition accouunt its ability to pass on th he increased CO2 cost. For F other
Gaming g: OPAP facin ng on-line co ompetition sectors covered byy the Commun nity scheme (ee.g. air transpo
ortation),
a tran
nsitional system should be put in place. In I order to ensure the
Given loocal internet player
p results,, we estimate that the size
orderlly functioningg of the carrbon and ele ectricity markets, the
of the Greek
G non-reggulated marke et is at levels in excess of
auctio
oning of allow wances for th he period com mmencing fro om 2013
€3bn. As
A a result, it is evident tha at OPAP is already
a facing
onwards should starts by 2011. It will be based on clear and
severe competition where
w payout of Internet bo ookies stands
objecttive principles which will be defined well in advance.
close to
o 90% and the e gaming opp portunities theyy provide are
superior to those of OPAP.
O
Telecom ms: OTE vs Altnets
A RES
S: Promising
g action plan
n by the new
w governme
ent
The pricing pressure es as observe ed during 200 09 by altnets We be elieve that the
e government shows a willin ngness to devvelop the
mited financiall flexibility seeking market share gains
with lim necesssary businesss environmen nt in Renewa able Energy Sources
and atteempting to reeach critical su ubscriber masss is likely to (RES), having takken into acco ount the vario
ous issues th hat have
be easeed in 2010. We
W would expe ect medium te erm pricing to n from Gree
arisen ece’s heavy dependence on imported d fuels.
convergge to Europea an averages of o around €30 (from c. €40 Thereefore, it plans to significantly boost capa
acity additionss in RES
currently) for double play
p and c. €440 for triple pla
ay. Moreover and in
n turn reduce carbon
c emissiions through:
custome er churn will become more e pronounced during 2010
upon thhe expirations of typical one-year lock up periods for ƒ Voting for a new bill thaat targets spee eding up the licensing
contracts. procedure es in RES. Th he Minister of Environment,, Energy
and Clima ate Change re ecently presen nted the propoosed bill
Regula
ation
which is aimed
a at facilitating the RES projects licensing
Gaming g: Deregulation now a nott so distant scenario
procedure e. According too the new bill:
We believe that the Greek gaming g sector is likkely to face a ¾ The installed
i capaacity target sttands at 8 to o 10GW
structurral reform both in terms of changes in th he regulatory from RES by 2020 0, with annual installations reaching
r
framework as well as a new produ uct offering. Government’s
G approoximately 1GW W.
intentionn to raise additional funds in order to reduce widening ¾ The tiime of investm ment will be reduced to 8-10 0 months
budget deficits is exp pected to be the
t main drive er behind any from the
t 4-5 years that it is currently.
final deecisions. We believe that during 2010 0, the Greek In our view,
v the ne ew law is expected
e to reduce
governm ment is likely to begin a pu ublic consultation regarding bureaucra acy and othe er administrattive bottleneccks thus
a contro olled liberaliza
ation model and
a stay with the view that positively affecting listeed companies active in the RES
the Gre eek Sate will take regulattory action ahead of any sector (Teerna Energy, E Ellaktor, Mytilin
neos and PPC C).
rulings from
f the ECJ.
Gaming g: Awaiting gambling
g taxa
ation reform ƒ Appointingg a pro-RES/g green energy management in PPC.
Despitee the recent postponement
p t for the app plication (until New mana agement will definitely hav ve a clear mandate to
30.04.10) of forme er tax meassures, the Government’s
G deliver a significant
s reduction in CO2 2 emissions thhrough a
intentionn to raise additional funds in order to reduce widening less carbon-intensive generation mix m (i.e. high her RES
budget deficits is exp pected to be the
t main drive er behind any on and gradu
contributio ual replacem ment of old-in nefficient
final deccision to introdduce a new taaxation regime e. We believe thermal unnits with new p plants). We allso think that PPC will
that thee new regime, albeit neg gative, could prove to be start making heavy use e of new techn nologies (e.g. filters to
somewh hat more po ositive for OPAP
O compa ared to the curb emisssions) in its exxisting lignite and
a fuel plantss.
postpon ned measuress.
Telecom ms: Mobile te ermination ra ate reductions s
Greek operators are e following a sliding path in reducing
mobile termination rates by a cu umulative 50% % over 2009-
2011 fro om 0.0989 to €0.0495 per min to meet EU E averages.
A 20.5% % reduction was w seen in January
J 2009, with further
cuts ass follows: a 20.6%
2 cut in 2010 and a 20.7% 2 cut in
T impact could be a mino
2011. The or negative forr Cosmote as
operatoors with large customer
c base es tend to be net receivers
of termination revenu ues.

Page 11 Pleasse refer to impo


ortant disclosure
e at the end of th
he document
Greek Sectors

Page 12 Please refer to important disclosure at the end of the document


Panagiotis Kladis, CFA
Financials Analyst Banks
Tel.: +30210 7720185
e-mail: kladis@nationalpk.nbg.gr
Spread management and asset quality improvement to
drive both earnings and prices higher

View After a very challenging year for Greek and Cypriot As it can be seen in the graph there is a strong correlation
banks, we believe that 2010 will be a better year. In 2009 we between the banks’ Earnings Yield (reciprocal of P/E) and the
witnessed: i) a significant margin squeeze as a result of the sovereign spread. Consequently, an improvement in the outlook
liquidity crunch, ii) a sharp slowdown in loan growth, iii) a spike for the Greek economy which would ease pressures on the
in the cost of credit due to the economic recession but also iv) sovereign spread is a necessary condition in order to see higher
strong trading gains after March. We believe that loan growth bank valuations.
will remain limited in the foreseeable future but margin
Valuations supportive At this point, valuations do seem to offer
recovery along with a gradual reduction in cost of credit, will
support as on a P/B relative basis compared to their European
prove to be adequate for higher earnings in 2010. Lately,
peers we are at lower levels even when compared to Q1 09,
concerns over the Greek macroeconomic environment have
when the spread of the 10year GGB versus the respective
come to the forefront, resulting in local banks’
German bund had reached 300bps.
underperformance relative to their European peers.
Greek & Cypriot Banks 12m fwd P/B relative to DJ Euro Stoxx Banks P/B
2.20
Recommendations In such an environment we are looking for
banks that: i) can better manage their NIM, ii) have already 2.00

experienced a slowdown in NPL formation which will gradually 1.80

result in a lower cost of credit risk, iii) have more exposure


1.60
outside of Greece, and iv) have a solid balance sheet. In our 5yr average

view, Bank of Cyprus stands out as it compares favourably 1.40

with its local peers in all the above mentioned criteria. We also 1.20
favour EFG Eurobank due to its significant exposure outside of
1.00
Greece and Alpha Bank which combines a solid balance sheet
with a very attractive valuation. 0.80
15/10/2004 15/10/2005 15/10/2006 15/10/2007 15/10/2008 15/10/2009

Key Sector Themes Source: FactSet, National P&K Securities


Macro Concerns Weigh on Valuations The recent concerns
over the Greek macroeconomic environment are reflected in We believe that once positive news on the Greek macro front
the sovereign spread widening versus the German bund which emerges, Greek banks will outperform their European peers
spiked lately. once again.

Sovereign Spread and Bank Valuations


0.300 3.50% NIM Management Bank NIMs took a significant hit at the
Greek & Cypriot Banks - Earnings Yield (L)
beginning of the previous year due to the liquidity crunch making
3.00%
0.250 deposits very expensive. Banks began to reprice their asset side
10 Year Sovereign Spread
0.200
2.50% which resulted in a significant recovery during 2Q and 3Q.
2.00%
Admittedly, this effort has to a large extent now taken place
0.150 which leaves little room for further improvement. However, given
1.50% that deposit margins are still in negative territory, as a result also
0.100
1.00% of historically low interbank rates, we believe that NIMs can
0.050
improve further.
0.50%

0.000 0.00%
Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09

Source: FactSet, National P&K Securities

P/E P/BV RoE


Prices as of Rating Target Current Upside M.Cap YTD 2009e 2010e 2009e 2010e 2009e 2010e
December 16th Price Price Potential (€m) (%)
Alpha Bank O/P €12.0 €8.55 40.4% 4,658 40.2% 11.2x 11.3x 0.83x 0.99x 8.8% 9.0%
Agricultural Bank U/P €1.80 €1.85 -2.3% 1,675 32.1% 17.5x 18.5x 0.93x 0.90x 7.2% 5.0%
Bank of Cyprus O/P €6.10 €4.72 28.6% 2,769 76.8% 8.4x 8.9x 1.24x 1.13x 15.4% 13.3%
EFG Eurobank O/P €11.0 €7.95 38.6% 4,281 42.3% 11.3x 10.7x 1.08x 1.02x 9.8% 9.8%
Piraeus Bank Neutral €11.5 €8.25 39.6% 2,274 31.6% 10.8x 12.1x 0.83x 0.79x 7.2% 7.1%
Hellenic Postbank Neutral €4.70 €4.24 11.8% 1,206 -5.3% 8.9x 13.0x 0.95x 0.93x 15.0% 7.2%
Marfin Popular Neutral €2.8 €2.38 19.5% 1,975 25.3% 11.5x 12.8x 0.56x 0.55x 5.0% 4.4%
AVG* 33% 11.3x 12.4x 0.9x 0.9x 10% 8%
DJ Euro Stoxx 50.0% 15.99x 12.03x 0.98x 0.94x 6.15% 7.80%
Source: National P&K Securities Estimates *Simple arithmetic average

Page 13 Please refer to important disclosure at the end of the document


Despite the fact that banks will have to gradually replace
cheap ECB liquidity in 2010, we believe that the total cost of Asset Quality Improvement – Lower Cost of Credit Risk
funding will be lower on the back of the lower cost of deposits We believe that NPL formation will start to decelerate slowly but
which account for 60-70% of total liabilities. steadily in 2010, as with Q3 results, given the fact that the
macroeconomic outlook for the SEE region and Turkey are
considerably better than 2009. Although banks need to restore
Interest Rates on Existing Balances - Greece
7 coverage ratios which were pushed significantly lower in 2009,
we believe that this can be achieved with a lower cost of credit
6
risk. We assume a c.8bps lower cost of credit than the 130bps
5 witnessed in 2009.
4 Quarterly NPL Formation/Aggregate Figures*
(in € m)
NPL Formation NPLs to peak
3 during H1 2010
2,261

2
1800
1700
1600
1 1,480 1500

1,138
0
Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09
Time Deposits - Households Time Deposits - Corporate
Mortgage Loans - (maturity >5yrs) Corporate Loans - (maturity >5yrs)
Source: Bank of Greece, National P&K Securities

Q4 '08 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10

Furthermore, any rate hikes from the ECB, which are projected Source: Companies’ Reports, National P&K Securities
towards the 2H of 2010 will also help bank NIMs. Finally, the
yield curve remains steep and is projected to remain so well Cost containment also supportive It has been a year since
into 2010. management teams made cost containment a priority. This
included freezing new branch openings and new employee hires
as well as efforts to rationalize and streamline general and
ECB funding not an issue Q3 results showed that Greek
administrative expenses. Early indications of this policy’s results
banks have already started implementing their own exit
are clearly identifiable in the last two quarters and we believe
strategies from the cheap ECB liquidity extensively used
that further signs of cost containment will be evident in the
during 2009. During Q3, we witnessed the largest Greek banks
foreseeable future. Overall constrained cost evolution will be
reducing their exposure substantially, i.e. c.30% qoq.
supportive for the bottom line since we estimate that these will
post marginal increases during 2009 - 2010 and in some cases
ECB Funding
(i.e. EFG Eurobank) we may even see a reduction in the overall
cost base.
€ 12.7bn
€ 11.8bn € 12bn

Q2 '09 Q3 '09
Regulatory Environment Following last year’s crisis in the
€ 9.5bn
€ 9bn
financial sector, it is highly likely that a stricter regulatory
environment will evolve. We believe that in 2010, regulatory
€ 6.3bn
bodies worldwide will decide on the new regulatory environment;
€ 6bn
bearing in mind that a grace period of several years will be
€ 3.8bn
granted in order for the banks to adjust. Furthermore, Greece’s
€ 2.6bn
€ 1.9bn
newly appointed government is currently amending the
regulatory environment in order to resolve issues concerning
longstanding overdue debts. In their attempt to be proactive in
NBG Alpha EFG Piraeus Marfin
light of this, the banks under our coverage have already
Source: Companies’ Reports, National P&K Securities enhanced capital bases, reduced loan to deposit ratios and
leverage whilst constantly seeking settlement and debt
In our view, as the unwinding of the ECB’s funding is expected restructuring with clients facing economic difficulties.
to be gradual and smooth, Greek banks will not face any Consequently, we do not see any serious impact from the above
problem in reducing their dependence. Moreover given that the mentioned regulatory changes.
12m Euribor currently stands at 1.23%, the impact in the
overall cost of funding will be limited and will be more than Banks will repay govt support by mid 2010 NBG, Hellenic
offset by the lower deposit rates. Postbank and Alpha bank have already proceeded with capital
increases, the latter exclusively to repay government preferred
securities. Most of the other banks will examine the repayment
Loan growth limited Given another stagnant year in Greece of government support by mid 2010 while the Bank of Greece
in addition to the fact that credit penetration is approaching has asked for any repayments to take place after May 2010. We
maturity levels, i.e. above 100% of GDP, we expect that loan believe that for the large part, banks will repay the government
growth will remain limited in the years to come. Loan growth support plan by the end of 2010; hence any government
therefore, will most likely surface from the banks’ SE intervention and more specifically restrictions on dividend policy,
operations. However, we believe that in 2010, Greek & Cypriot will cease to take effect.
banks will remain cautious. Hence, a mid single digit on a
Group level should be expected in our view for the next year.

Page 14 Please refer to important disclosure at the end of the document


George Vitorakis
Gaming
Tel.: +30210 7720151 Gaming
e-mail: gvitorakis@nationalpk.nbg.gr

Reform, now a not so distant scenario

View We believe that the Greek gaming sector is now close to a With regards to new products, a public consultation on a
series of structural changes including regulatory reforms as well scratch ticket Tender had already commenced under the
as new product introductions. The government’s need to raise former government. We believe that sooner rather than later,
additional funds in order to reduce widening budget deficits is the current government will move towards this direction as
expected to be the main driver behind any final decisions. well, whereby the viability of the scratch tickets Tender will rely
heavily on the upfront payment and payout structure of the
game.
Higher gambling taxation across the board We note the
growing trend for higher gambling taxation across the board that Lack of major privatizations in the next 6 months; higher
is hurting both domestic and global operators as seen in expectations in the medium-term In terms of the global
Bulgaria (where taxation rose to 15% from 10% previously) and operating environment, our thesis for 2009 regarding
Poland). In Greece, the Ministry of Finance postponed the international operators and their reduced risk appetite, has
application of the tax regime until 30.04.2010. We believe that proved to be correct as evidenced in cases such as Milli
although it will still hold negative implications, the new regime Piyango, Tote Tasmania and Camelot which attracted little
will be more positive for OPAP compared to the postponed investor interest. Despite a clear improvement in investor
measures. sentiment, we see little room for major privatization projects
taking place during the first half of 2010. Acquisitions or
buyouts are now more viable even in the short-term, with
Deregulation & instant tickets: Evolution during 2010 has
Camelot ranking as one of the first available targets. In the
higher chances Regarding evolution on the deregulation front,
longer term, we would expect to hear about the final decision
the debate between regulation and deregulation has still not
regarding the Illinois lottery privatization, clearly a landmark
provided any unanimous decision on a European level.
case for future developments in the US, during Q4 2010.
However, key countries such as France and Denmark are now
ready to follow a controlled liberalization model and open their
domestic gambling market. In addition, the Schleswig-Holstein Sill cautious on player spending recovery As for player
state in Germany has also expressed its intention to regulate its spending evolution, we stay cautious on European player
gambling market locally, which may lead to wider changes on a spending recovery. In doing so, we share Intralot’s
national level in the longer term. management’s view that any signs of an upturn on an
international level will be more evident in the US and Asia. In
With regards to the Greek monopoly issue, investors’ attention
our view, higher gambling taxation in SEE Europe could further
has shifted to the anticipated decision of the Greek Council of
State on Stanleybet’s appeal. The worst-case scenario for now hurt player spending in the region. On the positive side,
would be a referral to the ECJ, which in turn would mean that concerns over the Greek macroeconomic environment should
more time (in excess of 1-2 years) would be needed to reach a not have an impact on Intralot as more than 95% of our target
ruling. We believe that over the next two years it is more likely valuation derives from international operations.
that the Greek Government will begin a public consultation
regarding a controlled liberalization model. We therefore Top recommendations Overall, 2010 should be a year of high
reiterate our view that the Greek State will take regulatory volatility for the gaming sector. Although we prefer OPAP in
action ahead of any rulings from the ECJ. the short-term, we would also feel comfortable with a “buy on
the dips” approach for Intralot as well. Especially with regard to
changes on the regulatory front, any major developments
could eventually serve as good entry points for both stocks.

Prices as of Market EV/EBITDA EV/EBITDA


Price Perf. Y-t-d P/E 09 e P/E 10 e DivYield 09 e DivYield 10 e
December 16th Cap. 09 e 10 e
OPAP 15.2 4,849 -27% 7.9 x 7.3 x 4.5 x 4.7 x 12.3% 13.2%
Intralot 3.8 606 27% 7.4 x 6.7 x 4.8 x 4.6 x 4.11% 5.36%
Lottomatica` 13.5 2,331 -23% 13.8 x 11.6 x 5.3 x 5.0 x 4.64% 4.27%
Scientific Games 9.9 925 -21% 21.4 x 16.2 x 8.3 x 7.3 x 0.00% 0.00%
Ladbrokes 1.6 1,398 -5% 6.9 x 8.6 x 7.1 x 7.6 x 3.57% 4.48%
William Hill 2.1 1,489 35% 9.5 x 9.4 x 6.9 x 6.3 x 3.98% 4.50%
Paddy Power 23.9 1,147 82% 21.0 x 17.8 x 13.2 x 10.4 x 2.18% 2.28%
SNAI 3.0 347 39% 98.0 x 19.4 x 6.4 x 5.0 x 0.00% 1.20%
Bwin 40.2 1,425 202% 22.2 x 14.8 x 12.4 x 8.8 x 1.64% 2.64%
Party Gaming 2.9 1,186 44% 15.9 x 13.6 x 10.9 x 8.4 x 0.00% 0.00%
Simple average 35% 22.4 x 12.6 x 8.0 x 6.8 x 3.37% 3.71%
OPAP’s close peers 38.1 x 12.5 x 6.8 x 6.3 x 2.52% 3.39%
Intralot’s close peers 17.6 x 13.9 x 6.8 x 6.2 x
Source: Factset estimates, National P&K Securities

Page 15 Please refer to important disclosure at the end of the document


Theodore Ritsos
Research Director
TMT/ Transportation
Tel.: +30210 7720176 Telecoms
e-mail: t.ritsos@nationalpk.nbg.gr

Mobile pricing pressures likely offset by weaker fixed


line competition

View Mobile telephony: New rounds of termination cuts …


Greek operators will have to follow a sliding path in reducing
During 2010, the Greek telecom market will continue to be mobile termination rates by a cumulative 37% over the next
characterised by rising broadband penetration, investments in two years from 0.0786 currently to €0.0495 per min to meet EU
Local Loop Unbundling (LLU) and price undercutting in mobile averages. These cuts will be broken down in two tranches:
services. Fixed line altnets and mobile operators’ financial where a 20.6% reduction will take place in January 2010
struggles to produce positive returns by reaching a critical followed by a 20.7% cut in 2011. The impact may be a minor
mass of unbundled subscribers or protecting customer bases negative (1-2% at the EBITDA level) for Cosmote as operators
has led to unsustainable market share chasing strategies with large customer bases tend to be net receivers of
(bundling of services, triple play offers and undercutting termination revenue.
prices). This unstable industry structure and market frustration
is likely to increase inertia among existing incumbent OTE
customers, decelerate line loss and protect fixed line … and likely price wars may outpace data growth
revenues, in the short term. On the other hand, mobile
competition is likely to remain well in place which coupled with Mobile post paid customers will seek to lower their bills as their
termination rate cuts, may sustain lower margins and returns contracts expire early and late in 2010. As aggressive price
for the industry. promotions initiated by Wind Hellas early in 2009 expire,
contract customers are likely to seek similar if not higher,
Key themes savings in monthly bills. This may lead players to promote
lower tariff plans in order to prevent customer market share
LLU competition likely to ease -- Altnets with relatively limited loss.
financial flexibility (for example Tellas and HOL) are likely to
ease pricing pressures that were exerted during 2009. This will On a more positive note, higher ARPU levels may e driven by
clear the field for growth for better financed players, like raising data revenues as smart phones tend to grow faster
Forthnet and OTE, whom are generally committed to operating than plain terminals. Generally, Smartphones have driven
margin protection and cash flow generation. higher data ARPU and revenue growth in EU and the US
without cannibalizing voice.
We would expect medium term pricing to converge to
European averages of c. €30 (from c. €40 currently) for double Recommendations
play and c. €40 for triple play packages. Dominant players will
be in an improved position to benefit from incremental On the growth side of the sector, Forthnet remains our
broadband penetration. Customer churn will also be evidenced preferred play as it is the financially strongest altnet in
among altnets during 2010 upon the expiration of typical one- broadband and content provision set to benefit from an
year lock up periods for contracts – also leaving extra room for unsustainable level of competition. The viable strategy of focus
customer growth. on profitability -- rather than market share chase through price
cuts – faces an economic environment less supportive for
Fixed to mobile substitution an ongoing threat to line premium, pay TV, services, in the short term.
loss-- With the fall of mobile prices, fixed line access fees are
becoming an unnecessary expense while mobility premiums On the other hand, OTE’s strengthened market position in
outweigh the faster access, albeit with complications and domestic fixed line, due to weakening altnets as well as the
logistics, of ADSL and LLU services. introduction of competitive tariff schemes, is likely to mitigate
part of the decline in revenues from mobile. Further upside
may arise from additional employee redundancies and tangible
synergies from Deutsche Telekom’s involvement.
P/E P/BV EV/Sales EV/EBITDA
Prices as of
December 16th Market Mean EV
Currency Price YTD 2009 e 2010 e 2009 e 2010 e 2009 e 2010 e 2009 e 2010 e
Cap (m) '09
BT Group GBP 1.43 11,062 20,988 5.5% 10.3 9.5 1.0 1.0 3.8 3.7
Deutsche Telekom EUR 10.29 44,878 86,068 -4.3% 15.5 15.1 1.2 1.2 1.3 1.3 4.2 4.2
Portugal Telecom EUR 8.38 7,510 12,955 38.0% 12.8 12.6 11.7 10.8 1.9 1.8 5.3 5.0
Vodafone Group GBP 1.42 74,693 107,274 2.2% 9.5 9.3 0.8 0.8 2.5 2.4 7.3 7.1
Telefonica EUR 19.41 91,324 133,365 22.5% 11.4 10.4 4.4 4.0 2.4 2.3 5.9 5.7
Telekom Austria EUR 9.74 4,315 7,986 -5.4% 16.5 11.9 2.3 2.4 1.6 1.7 4.8 4.9
France Telecom EUR 17.31 45,847 78,942 -13.3% 9.8 9.3 1.6 1.6 1.6 1.5 4.6 4.4
OTE EUR 10.48 5,137 9,293 -11.9% 8.9 9.0 3.4 3.0 1.5 1.6 4.2 4.4

Average excl OTE 12.3 11.2 3.7 3.4 1.8 1.7 5.1 5.0
Premium(Discount) -27.0% -19.3% -8.0% -12.2% -12.1% -8.8% -17.5% -12.8%
Source: National P&K Securities, Factset estimates

Page 16 Please refer to important disclosure at the end of the document


Kostas Ntounas
Deputy Research Director
Industrials / Energy / Construction
Tel.: +30210 7720174
Industrials / Materials
e-mail: ntounas@nationalpk.nbg.gr

Victor Labate Stocks to start pricing in gradually improving business


Industrials / Oil & Gas
Tel.: +30210 7720076 environment
e-mail: labate@nationalpk.nbg.gr

View
Key themes in 2010
We believe that there will be a gradual recovery of demand for Upturn in Depreciation
commodity
Exposure
residential
Exposure
public
High Regional Diversified
USD vs. EUR leverage exposure operations
industrial products in 2010 driven by the pick up in economic prices sector projects
MYTIL - / + (*) - +
activity in Europe. We are already in the midst of observing METKA -
positive trends, such as positive GDP growth and the TITAN
S&B
- -
-
+ -

improvement in industrial activity in some EU countries. We also VIOHALCO + - - + - - +


SIDENOR + - - + - -
note that building materials is an early cycle sector. As a result, HALCOR + - - - -
stocks will start pricing in the economic recovery in key markets ELVAL
FRIGOGLASS
+
-
- - - - +

(US and Europe). Source:National P&K Securities, (*) lower base metal prices: negative, lower oil prices: positive

We favour companies with the following characteristics:


Positives
ƒ Defensive and diversified operations.
ƒ Early cycle plays. The economic recovery in Europe should lead to higher demand
ƒ Limited exposure to the domestic housing market. for industrial products in 2010.
ƒ Attractive valuations, balance sheet strength and good The upturn in commodity prices will be accompanied by an
top line visibility on high backlog. improved pricing environment for metal processors.
Our preferred picks are Metka (low risk) and Sidenor-Viohalco Implementation of concessions and public projects in Greece,
(high risk). We would also have S&B Industrial Minerals on our after years of delays, can support revenues and profits for
radar screen due to its very limited exposure to the Greek industrial companies, such as Sidenor and Titan, in the medium
market and its leading market position in most of its segments. term.
We adopt a non-positive stance (i.e. neutral or bearish) on Low transportation costs (e.g. ocean freight rates) will have a
companies that are heavily exposed to the EUR/USD rate, positive impact on S&B, Mytilineos and Corinth Pipeworks.
possess large regional exposure, sell mostly to the construction
sector and have high leverage. Expansion abroad, combined with Greek metal processing
Outlook companies’ leading position in SEE and a developed distribution
⇒ Pick up in industrial demand in Western Europe. network represents an opportunity to strengthen market share in
⇒ Stagnant construction activity in Greece and SEE the region (Viohalco and Titan).
mainly due to sluggish residential sector. The transition to higher value added products represents an
⇒ Public construction/BOOT activity gradually opportunity to improve margins.
accelerating.
⇒ We expect volatility and likely pressure on base metals
prices in the short-term, but a gradual recovery starting Negatives
from mid-2010. Key determinants of metals’ prices are Recovery may take longer than expected (Viohalco-Sidenor,
expected to be China’s economic growth and output Titan and Mytilineos). For instance, the domestic residential
gap globally. sector could recover but most likely not before H1’11.
⇒ Likely further weakening of USD vs. EUR (y-o-y) will be
Overcapacity in the South East Europe region, competition,
a drag on dollar denominated sales.
imports (mainly from Turkey and Italy) and the presence of many
⇒ Low transportation costs due to relatively low oil prices
players in the market, could lead to further weakening in selling
and ocean freight rates.
prices and in turn margin erosion (Titan and Sidenor).
Key Themes
Key themes for the sector for 2010 are the economic recovery in The volatility of base metals’ prices (including scrap metal) could
Europe which is expected to drive demand and improve the significantly hurt margins (Viohalco Group).
pricing environment for industrial products, the upturn in
Continued recession in the US residential sector will materially
commodity prices, the exposure to both the residential and
affect Titan’s operations for yet another year.
public construction sector, the weakening of the USD vs. EUR
and the impact of lower interest rates for the most highly
leveraged companies.

Prices as of Target Market P/E EV/EBITDA P/BV Div. Yield


December 16th Sector Rating Price Price (€) Cap (€ m) ‘09e ‘10e ‘09e ‘10e ‘09e ‘10e ‘09e ‘10e
Mytilineos Holdings Metals & Energy Neutral 5.10 6.2 597 22.0 9.6 8.5 6.7 0.7 0.7 2.5% 5.8%
Metka EPC Outperform 9.17 14.4 476 12.7 8.1 7.5 5.3 3.0 2.4 4.7% 7.4%
Titan Cement Cement Neutral 21.58 21.0 1,700 13.7 10.6 8.4 6.7 1.2 1.1 1.4% 1.8%
Viohalco Metal Processor Neutral 4.14 4.2 826 n.a. 49.9 27.3 10.2 0.7 0.8 0.0% 0.6%
Sidenor Metal Processor Outperform 4.82 6.8 463 n.a. 22.2 55.3 8.8 0.9 0.8 n.a. 1.3%
Corinth Pipeworks Pipes Underperform 1.44 1.5 179 8.7 n.a. 6.3 17.6 1.2 1.2 0.0% 0.0%
Frigoglass Ind. Packaging Underperform 7.50 6.0 302 42.7 19.9 10.1 8.2 2.8 2.5 0.8% 1.7%
Source: National P&K Securities Estimates

Page 17 Please refer to important disclosure at the end of the document


Victor Labate
Industrials / Oil & Gas
Tel.: +30210 7720076 Oil & Gas
e-mail: labate@nationalpk.nbg.gr

Recovery in middle distillates and petrol station


network expansion

View
Motor oil respectively) and by expanding in SEE (Hellenic
Even though the economic environment could remain Petroleum).
challenging in Greece in 2010, refiners are expected to gain
The fundamentals for storage activity remain good at a global
from the improvement in refining margins. We expect an upturn
level and we expect Motor Oil in particular, to continue earning
in middle distillates spreads in 2010 driven by the global
stable income from this activity.
economic recovery, whilst on the other hand; we anticipate light
and heavy distillates to remain at their current levels. Moreover, Preferred refiner: Motor Oil
the Balkans’ petrol station network remains underdeveloped and
In such a difficult refining environment, we prefer refiners with a
we expect Greek refiners to gain from their expansion in SEE
high level of complexity which are geared to gain from the upturn
and from the development of their Marketing Units.
in middle distillate spreads. Motor Oil remains our preferred pick
Key themes in the Greek market. With a Nelson Complexity Index of 11.95
and the Crude Distillation Unit investment due to start next year,
Key themes are a) the gradual recovery in benchmark Med
the refiner can maintain solid refining margins and boost its
cracking margins from their current record low levels and the
production of diesel and jet fuel. Motor Oil is also trading at a
upturn in middle distillates spreads driven by the global
discount vs. its peers (see table below).
economic recovery, b) the weak USD vs. the Euro, c) the
relative stability of crude oil prices, d) the development of
Marketing, and e) gains from storage activity. Med cracking ($/bbl), Diesel, Gasoline spreads ($/ton)
Benchmark Med cracking margins are forecast to improve 14 350
gradually in 2010 from their current record low levels. We
expect that there will be a relative shortage in the production of
12 300
diesel and jet fuel and increase in demand for middle distillates.
As a result, we expect a material increase in diesel and jet fuel
10 250
margins next year. Meanwhile, there will be excess capacity at
a global level for the production of gasolines.
8 200
The weak USD is anticipated to be negative for refiners as
benchmark refining margins are quoted in USD whereas a large 6 150
portion of costs are incurred in Euros. Refiners are expected to
make foreign exchange gains in the short-run but in the longer
4 100
run, they are expected to suffer from the weak USD.
Crude oil prices are projected to remain at their current levels (c. 2 Urals Med cracking (left axis) 50
$75) in 2010, and we do not foresee a large shift upwards or Diesel spread (right axis)
Gasoline spread (right axis)
downwards next year. 0 0
We anticipate Greek refiners to continue to develop their 2004 2005 2006 2007 2008 2009
marketing activity by achieving synergies and economies of
scale (acquisition of BP and Shell by Hellenic Petroleum and Source: Bloomberg, IEA.

Prices as of Rating Target Price Upside Market YTD P/E EV/EBITDA P/BV Div Yield
December 16th Price 09/12/09 Potential Cap (€m) (%) 2009e 2010e 2009e 2010e 2009e 2010e 2009e 2010e

Hellenic Petroleum Neutral 8.2 8.3 -1.0% 2,537 49,8 14.0 x 11.8 x 10.3 x 10.1 x 1.1 x 1.0 x 5.5 5.6
Motor Oil Outperform 13.5 10.7 25.3 1,185 34.7 10.7 x 9.4 x 9.2 x 8.5 x 3.4 x 3.1 x 7.9 11.6

Neste Oil n.a n.a 11.6 n.a 2,956 9.0 31.2 x 17.4 x 11.2 x 9.4 x 1.3 x 1.3 x 1.7 2.9

Erg n.a n.a 9.9 n.a 1,420 16.1 19.1 x 23.0 x 6.1 x 0.8 x 0.8 x 4.2 4.2

Saras n.a n.a 2.1 n.a 1,933 -15.3 13.6 x 12.1 x 5.4 x 1.5 x 1.4 x 0.5 4.4

MOL n.a n.a 56.8 n.a 5,924 52.7 14.5 x 8.9 x 7.2 x 5.3 x 1.1 x 1.0 x 2.6 3.0

PKN n.a n.a 7.6 n.a 3,213 20.2 20.2 x 11.4 x 7.3 x 5.9 x 0.7 x 0.7 x 0.0 1.0

OMV n.a n.a 28.5 n.a 8,607 53.3 11.4 x 7.2 x 4.2 x 3.3 x 1.1 x 1.0 x 2.6 3.7

Tupras n.a n.a 12.9 n.a 3,301 74.6 9.8 x 9.3 x 6.8 x 6.9 x 2.0 x 1.9 x 8.0 8.7
Source: National P&K Securities Estimates, Factset consensus.

Page 18 Please refer to important disclosure at the end of the document


Ioanna Katsoula
Retail/Consumer Goods
Tel.: +30210 7720184
e-mail: Katsoula@nationalpk.nbg.gr
Retail/Consumer Goods
Tough macroeconomic conditions will put pressure on
consumer spending –value for money concepts will prevail

Private consumption has been negative for 3 consecutive Key trends/issues: Heightened Competition: The key target
quarters in 2009 and it is not expected to recover before mid for all companies in the current environment will still be winning
2010. Negative factors such as increasing unemployment and market share. We expect an intensification of competition with
decelerating consumer credit are counterbalancing any positive the focus shifting to offers/promotions as well as advertising
effects from real wage increases. For the remainder of the year, campaigns. Financially healthy companies are likely to weather
private consumption is expected to remain a drag on GDP the difficulties and prevail vs. smaller, more distressed family
growth as employment and disposable income are expected to run companies.
deteriorate. Going forward, the government’s fiscal adjustments Focus on inventory management: Destocking - keeping lower
including higher taxes in 2010, the containment of wage inventory levels –the risks of inventory write offs fade out as
increases and the fading positive effect from falling energy companies addressed this issue in 2009.
prices are expected to put downward pressure on disposable
income. Cost containment focus: Retailers and consumer goods
companies addressed their opex levels in 2009 and proceeded
Lower private consumption has had a pronounced effect on with cost structure rationalisation measures - however in 2010,
retail sales in 9m 09. there is little room for further cutdowns. In certain cases, cost
containment initiatives and their effects will be fully
Retail Sales Evolution
in constant prices materialised in 2010.
15.0% Attempts to lower debt levels: through WC capital
10.0% improvements.
5.0%
Value for money concepts: Private label products are likely to
0.0%
gain popularity amongst consumers.
Jan 08
Feb08
March 08

Jun 08
July 08
Aug 08

Nov 08
Dec 08
Jan 09
Feb09
March 09

Jun 09
July 09
Aug 09
Apr 08
May 08

Sept 08
Oct 08

Apr 09
May 09

Sept 09

-5.0%

-10.0%
External Factors: such as weather conditions, strikes, riots and
-15.0%
the H1N1 flu pandemic.
-20.0% FX fluctuations affecting both companies with a sales presence
General Index including fuels General Index Excluding fuels in other countries as well as companies sourcing products or
Source: NSSG, raw materials from countries with different currencies.
Relative valuation: the re-rating of the international peer group
Business climate having peaked in October, declined in
positively affected all retail companies in FY 09.
November, mainly on the back of a significant drop in the
Consumer Confidence indicator and the mild decline in the Concluding, we believe that the following year will be a tough
Retail Trade Confidence Indicator. Consumer confidence is year in terms of macroeconomic and market conditions. High
expected to remain low at least until H1 10, on account of the uncertainty around the impact of the new tax measures and
high uncertainty around unemployment and new taxes. the changes in public sector wages will be a drag on consumer
spending at least for H1 10. Consumer behaviour will remain
Consumer Confidence vs. Retail Trade volatile, affected in large part by the macroeconomic outlook.
-10
Confidence
130
This uncertainty/volatility, at least for the first half of 2010,
120 will be potentially reflected on our covered company stock
-20 110
100
prices.
-30
90
80
We expect that the key trends we witnessed in 09 will continue
-40
70 and that value for money concept strategies will prevail. In
-50 60
50
addition, we anticipate market share gains, store network
-60 40 expansion and product mix enrichment, as well as cost
containment initiatives, and in some cases, a favourable FX
environment. Faster international recovery could have a
Co n sumer Co nfidence (left axis)
Retail Trad e Co nfidence (right axis)
positive impact on companies with international exposure
Source: IOBE
and/or dependency on the tourism industry.
Our favourite stock in the retail sector would be Jumbo due
to its more resilient product offering, higher margins and
returns and healthier balance sheet.
Prices as of EV/EBITDA EV/EBITDA
Price Market Cap. Perf. Y-t-d P/E 09 e P/E 10 e DivYield 09 e DivYield 10 e
December 16th 09 e 10 e
Folli Follie 14.34 472 147.2% 4.7 4.9 6.1 6.1 0.85% 0.83%
Fourlis 8.60 438 72.0% 12.1 10.9 7.3 6.9 2.4% 3.5%
HDFS 6.18 326 7.7% 7.2 6.7 6.9 6.6 7.4% 8.1%
Jumbo 8.20 994 88.9% 10.9 10.3 7.7 7.3 2.8% 2.9%
Korres 6.80 79 31.3% 20.5 18.4 12.7 11.5 1.7% 1.9%
Sarantis 4.56 175 7.5% 11.4 9.7 7.9 7.0 0.7% 1.5%
DJ Euro Stoxx Retail 272.3 113,522 +25.1% 16.4x 14.6x 8.0x 7.2x 2.86% 3.08%
DJ Stoxx
Personal/Household 310.2 174,996 +36.9% 23.1x 19.2x 12.0x 10.5x 1.97% 2.08%
Source: Factset estimates, National P&K Securities

Page 19 Please refer to important disclosure at the end of the document


Greek Selected List

Page 20 Please refer to important disclosure at the end of the document


Top picks Ellaktor
An investment proposal combining defensive charactersitcs, mostly linked to concessions (mainly the Attica
Ring Road), with strong growth potential coming from the Group’s RES/Environmental operations. We buy
the shares mainly due to:
ƒ Visibility from construction sales on relatively high backlog.
ƒ Positive catalysts will be the re-tendering of the ARR extension and the Kastreli airport in H2’10.
ƒ Anticipated stabilization of construction margins going forward.
ƒ Leading positions in local concessions and majority shareholding in the ARR. Concessions account
for c.60% of the consolidated operating profits.
ƒ Fast growing presence in the energy and environmental business sector, mainly through capacity
additions in wind energy.
ƒ Supportive peer group valuation.
Kostas Ntounas, +30210 7720174, ntounas@nationalpk.nbg.gr

Metka
A story highlighted by excellent growth potential at relatively low risk. We buy the shares mainly on:
ƒ Significant growth potential anticipated from FY’10 onwards on impressive backlog accumulation.
ƒ Work-in-hand has reached record-high of €2.2bn, or 3.5x ‘10e sales, providing excellent visibility for
the years to come.
ƒ Well-diversified project portfolio.
ƒ The project assignments in Pakistan, Romania, Syria and Turkey prove that Metka can successfully
participate in international tenders winning new contracts.
ƒ Net cash position maintained in 9M’09.
ƒ High operating margins and economic returns, very low capex needs and decent dividend yield.
ƒ Attractive valuation at current levels. EPS CAGR ’09-’11 of 32%.
Kostas Ntounas, +30210 7720174, ntounas@nationalpk.nbg.gr

Bank of Cyprus
A strong balance sheet and favourable geographical exposure:
ƒ The group’s operating performance is improving on a gradually expanding NIM and better asset
quality trends.
ƒ In terms of geographical contribution, BoC’s regional operations - most importantly Russia and
Greece - turned profitable during Q3. We expect these trends to continue providing support to the
group’s profitability as regional economies are on a recovery path.
ƒ Upcoming growth opportunities, especially in Russia, likely to further support profitability given
BoC’s strong balance sheet, both in terms of capital and liquidity.
ƒ Dividend payments and business guidance highlight commitment to shareholders.
Panagiotis Kladis, CFA +30210 7720185, kladis@nationalpk.nbg.gr

Coca Cola Hellenic


An investment proposal combining the defensive characteristics of the Food & Beverages sector, with strong
growth potential coming from the Group’s high exposure in the South Eastern European markets. We buy the
shares mainly due to:
ƒ Following a difficult year in 2009, it seems that the environment is getting better in most of the
economies of SEE for 2010. In its latest report IMF updated its projections for GDP and consumer
prices for 2010 for most of these countries, which will have a positive impact on volumes as well as
in the mix between Immediate and Future Consumption Channels
ƒ Limited exposure in the Greek market since sales will represent circa 7% of total volumes sold in
2009 and circa 9% of EBIT
ƒ Currencies had a headwind impact in 2009 while with the turnaround of the economies of SEE will
have a slightly tailwind impact in 2010
ƒ FY 2009 proved to be a record year for FCF generation due to effective working capital
management and reduced Capex. We expect this to continue in the coming years while we also
expect the Company to provide an upgraded guidance for FCF generation for the period 2010-2012
in February
ƒ Reduced Capex in the following years since the Company is well positioned to capture potential
growth in SEE countries
Iakovos Kourtesis, +30210 7720251, ikourtesis@nationalpk.nbg.gr

Page 21 Please refer to important disclosure at the end of the document


Greek Watch List

Page 22 Please refer to important disclosure at the end of the document


Watch list selected financials
Company View Close Chng Market Free Avg daily EPS chng P/E EV/Ebitda Div.Yield P/BV
16-Dec- YTD Cap Float value (3M) 2009e 2010e 2009e 2010e 2010e 2009e 2010e
(%) (€ m) (%) (€) (%) (%) (x) (x) (x) (%) (x)
Alpha Bank O/P 8.55 40.2% 4,568 91.0% 24,920,839 -30.0% -1.2% 11.2 11.3 n.a. 2.5% 0.9
Agricultural Bank U/P 1.85 32.1% 1,675 22.7% 2,522,333 n.m. -5.0% 17.5 18.7 n.a. 2.0% 0.9
Bank of Cyprus O/P 4.72 76.8% 2,769 100.0% 11,834,324 -37.5% -4.9% 8.4 8.9 n.a. 3.6% 1.1
EFG Eurobank O/P 7.95 42.3% 4,282 59.0% 15,541,837 -43.26% 5.89% 11.6 10.7 n.a. 2.2% 1.0
Marfin Popular Bank Neutral 2.38 25.3% 1,976 80.0% 12,341,802 -57.2% -10.2% 11.5 12.8 n.a. 3.5% 0.5
Piraeus Bank Neutral 8.25 31.6% 2,774 100.0% 11,312,565 -30.1% 2.5% 12.5 11.4 n.a. 1.7% 0.8
Postal Savings Bank Neutral 4.24 -5.3% 1,206 55.0% 3,155,396 n.m. -31.1% 8.9 13.0 n.a. 3.9% 0.9
Hellenic Bank -- 1.15 10.6% 342 70.0% 612.515 -- -- -- -- -- -- --
Banking 19.592 76.4% -23.9% 5.7% 9.6 9.1 n.a. 2.7% 1.0

OTE Neutral 10.48 -11.9% 5,137 50.0% 13,918,457 -4.4% -0.7% 8.9 9.0 4.4 7.2% 3.0
Forthnet O/P 1.09 53.5% 169 66% 466,106 n.m. n.m. n.m. 48.5 6.8 0.0% 0.4
Telecoms 5,306 49.7% -20.6% 0.9% 8.7 10.3 4.9 6.9% 2.6

CC Hellenic Bottling O/P 16.30 72.1% 5,956 46.0% 6,397,025 -0.6% 7.3% 14.1 13.1 7.5 1.7% 2.0
Food & Beverage 5,956 46.0% -0.6% 7.3% 14.1 13.1 7.5 1.7% 2.0

S&B Ind. Minerals UR 4.52 -41.0% 137 42.6% 48,262 UR UR UR UR UR UR UR


Frigoglass Neutral 7.50 120.6% 302 55.9% 398,569 -63.7% 116.2% 42.7 19.8 7.8 0.8% 2.5
Sidenor O/P 4.82 50.6% 463 42.0% 446,849 n.m. n.m. n.m. 22.2 8.7 0.0% 0.8
Corinth Pipeworks U/P 1.44 63.6% 179 20.1% 171,104 99.0% -125.5% 10.1 n.m. 17.0 0.0% 1.3
Elval U/P 1.80 106.9% 223 44.9% 94,852 n.m. n.m. n.m. n.m. 8.1 0.0% 0.4
Halkor U/P 1.40 86.7% 142 49.6% 88,765 n.m. n.m. n.m. 30.9 11.7 0.0% 0.8
Viohalco UR 4.14 0.5% 826 44.9% 431,847 UR UR n.m. UR UR UR UR
Mytilineos Holdings Neutral 5.10 28.8% 597 64.4% 1,568,650 37.5% 130.2% 22.0 9.6 6.6 2.3% 0.7
Metka O/P 9.17 38.5% 476 47.0% 638,416 -9.3% 56.1% 12.7 8.1 5.3 4.7% 2.4
Materials/Industrials 3,345 48.0% -85.6% n.m. 11.1 16.4 8.1 0.7% 0.8

Ellaktor O/P 5.27 23.1% 933 60.0% 1,587,096 -0.9% 12.5% 9.8 8.8 5.6 2.2% 0.9
J&P Avax O/P 2.97 30.8% 231 26.8% 107,853 41.1% 6.1% 7.8 7.3 6.8 2.5% 0.8
GEK -- 5.87 75.7% 504 58.1% 185,402 --
-- -- -- -- -- --
Construction 1.668 56.6% 7.2% 11.0% 9.4 8.5 6.2 2.2% 0.8

Intralot Neutral 3.76 25.3% 598 66.0% 2,763,398 -14.2% 6.4% 8.0 7.2 5.0 3.8% 1.6
OPAP O/P 15.64 -24.4% 4,989 65.6% 14,627,947 -15.7% 7.7% 8.1 7.5 5.0 12.0% 18.3
Lodging/Gaming 5,587 65.6% -15.6% 7.5% 8.1 7.5 5.0 11.1% 8.8

EYDAP UR 5.80 11.1% 618 29.6% 320,085 UR UR UR UR UR UR UR


EYATH UR 4.90 14.0% 178 26.0% 248,601 UR UR UR UR UR UR UR
PPC O/P 13.24 14.7% 3,072 45.1% 11,587,693 n.m. -28.9% 3.9 5.4 5.3 10.4% 0.5
Utilities 3,867 41.7% n.m. -28.9% 3.9 5.4 5.3 10.4% 0.5

Hellenic Petroleum Neutral 8.30 53.7% 2,537 28.6% 1,501,977 n.m. 18.6% 14.0 11.8 10.1 5.5% 1.0
Motor Oil O/P 10.68 39.8% 1,183 38.5% 2,645,703 37.2% 14.8% 10.7 9.4 8.4 7.9% 3.1
Energy 3,720 31.7% 183.5% 17.2% 13.0 11.0 9.5 6.2% 1.3

Intracom Neutral 1.19 63.0% 158 55% 477,062 n.m. n.m. 48.0 n.m. 8.4 1.7% 0.4
Technology 158 53.6% n.m. n.m. 48.06 n.m. 14.4 1.7% 0.4

Titan Cement Neutral 21.58 55.3% 1,767 49.0% 2,082,240 -37.6% 28.4% 13.7 10.6 6.7 1.4% 1.1
Cement 1,767 49.0% -37.5% 28.4% 13.7 10.6 6.7 1.4% 1.1

Hellenic Duty Free Neutral 6.18 7.7% 326 22.0% 59,735 4.1% 6.5 7.2 6.7 6.6 7.4% 1.9
Jumbo O/P 8.20 88.9% 994 70.0% 1,694,907 16.1% 5.6% 10.9 10.3 7.3 2.8% 2.3
Sarantis Neutral 4.56 7.5% 174 55.0% 283,866 -39.8% 18.2% 11.4 9.7 7.0 0.7% 1.3
Fourlis O/P 8.60 72.0% 438 70.0% 751,195 -5.7% 11.3% 12.1 10.9 6.9 2.4% 1.8
Folli Follie Neutral 14.34 147.2% 472 50.0% 1,342,823 30.8% -5.4% 4.7 4.9 6.1 0.9% 1.1
Korres O/P 6.80 31.3% 79 30.0% 54,573 -1.9% 11.6% 20.5 18.4 11.5 1.7% 2.9
CG & Retail 2,483 59.6% 9.8% 1.4% 9.6 9.1 6.7 3.0% 1.7

Iaso O/P 3.55 -20.0% 189 79.0% 100,406 -19.1% 13.2% 10.9 9.6 8.0 3.2% 1.4
Healthcare 189 79.0% -19.1% 13.2% 10.9 9.6 8.0 3.2% 1.4

Alapis -- 0.44 -2.9% 863 50.6% 10,269,430 -- -- -- -- -- -- --


Pharmaceuticals 863 50.6% -- -- -- -- -- -- -

Terna Energy Neutral 6.58 70.5% 719 25.0% 363,076 -25.0% -11.0% 39.9 44.9 23.8 0.9% 1.8
RES 719 25.0% -25.0% -11.0% 39.9 44.9 23.8 0.9% 1.8

Teletypos (Mega) UR 3.75 -28.7% 142 47.8% 43,879 UR UR UR UR UR UR UR


Media 142 47.8% n.m. n.m. n.m. n.m. n.m. n.m. n.m.

PPA O/P 15.52 59.7% 388 25.0% 222,018 35.9% 139.2% 51.0 21.3 9.9 0.6% 2.0
Transport 388 25.0% 35.9% 139.2% 51.0 21.3 9.9 0.6% 2.0

Aegean Airlines O/P 3.40 16.8% 243 25.0% 90,403 -4.6% 8.7% 8.6 7.9 8.9 8.8% 1.1
Airlines 243 25.0% -4.6% 8.7% 8.6 7.9 8.9 8.8% 1.1

Hellenic Exchanges O/P 7.80 41.9% 510 79.0% 2,990,251 -38.4% 18.9% 13.7 12.0 11.2 3.8% 2.8
Exchanges 510 79.0% -38.4% 14.5% 13.7 12.0 11.2 3.8% 2.8

Autohellas O/P 1.99 63.1% 72 27.0% 23,368 35.6% 11.4% 4.0 3.6 2.6 7.5% 0.6
Leasing 72 27.0% 35.6% 11.4% 4.0 3.6 2.6 7.5% 0.6

Watch List 56,801 61.7% 0.3% 5.1% 10.0 9.5 6.4 4.1% 1.2
Watch List (excl.
banks) 37,550 39.1% 38.8% 4.5% 10.4 9.9 6.4 5.3% 1.4
Watch List (excl.
Emporiki and PPC) -15.9% 9.7% 10.8 9.9 6.9 3.8% 1.2
General Index 2,222.14 24.4%

O/P: Outperform, U/P: Underperform, U/R: Under review

Page 23 Please refer to important disclosure at the end of the document


AEGEAN AIRLINES Outperform
Price: € 3.4 Airlines 12M target price: € 5.0
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 2.5 - 4.9
Cost containment to offer reasonable support to margins in 2009 and outpace Market cap in € m 243
possible demand discrepancy for air travel. Supportive is the ongoing lowering in Reuters / Bloomberg AGNr.AT / AEGN GA
capacity across Europe coupled with exit from smaller players. Free float (e) 25%
Institutional ownership (e) 8%
Our DCF valuation is sourced on a reasonable 6% annual growth in long term
operating profitability, while on comparables the shares trade favourably -- less
than half forward earnings vs. low cost carriers, based on our numbers. Expected return
Upside to price target 42.9%
Dividend yield estimate 8.8%
Total return forecast 51.7%
Investment positives
Strong brand awareness and leading position in Greece coupled with market share Trading Data
gains Absolute 3m -25%
-¨ ¨- 12m 20%
Ongoing fleet renewal (from 21 in 2006 to 31 by 2010) provides for growth Relative to ATG 3m -13%
dynamics and homogeneity driven cost benefits (fuel consumption, maintenance, -¨ ¨- 12m -13%
crew). 3m avg. daily trading vol. in € m 0.09
Weight in ATG 0.38
Partnership with Lufthansa to support medium term volume growth and load
factors.
Price performance
Lower fuel cost offers a buffer for margins in the short term.
Share performance
5.0 3200

Investment negatives 4.5 2800

4.0 2400
Concerns about a weakening demand for leisure and business travel due to macro
economic downturn may impact capacity utilization for the sector as whole. 3.5
2000
3.0
1600
Weak load factors in the new international routes, yet improving as routes mature.
2.5
1200
Change in the competition structure in Greece following the privatization of legacy
01-09

03-09

05-09

07-09

09-09

11-09
player Olympic Airlines may lead to short term pricing pressures and lower yields.
Aegean Airlines S.A. Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates

Catalysts
Addition of state subsidized domestic routes (auctioned off in Q1 ’10) to add
network reach and boost customer loyalty Company description
Aegean Airlines is a full service airline passenger carrier with a
leading position in the Greek domestic route market and
Uptake in demand for tourism/leisure travel from gradually recovering central growing presence in the continental European market. The
European markets may raise passenger traffic and outpace yield pressures. company is currently running a fleet of 27 planes (8 Airbus
A320, 2 A321, 6 Avros RJ 100, and 11 Boeing 737 /300-400)
that will reach 31 planes by 2010 vs. 21 in 2006.

Key financials 2007 2008 2009E 2010E 2011E


Turnover (€ m) 482.7 611.8 642.8 699.5 764.7
EBITDA (€ m) 47.0 57.5 56.3 65.1 82.6
Profit after-tax (€m) 35.7 29.5 28.1 30.6 41.3
reported EPS (€) 0.57 0.41 0.39 0.43 0.58
adj.EPS chng (%) 19.2% -27.9% -4.6% 8.7% 35.2%
rep.P/E (x) 11.9 7.1 8.6 7.9 5.9
EV/EBITDA (x) 13.0 6.8 9.7 8.9 7.0
ROIC (%) 19.6% 18.4% 15.8% 18.5% 21.5% Theodore Ritsos
Research Director
DPS (€) 0.00 0.25 0.30 0.35 0.40
+30210 7720 176
Dividend Yield (%) 0.0% 0.0% 7.4% 8.8% 10.3% t.ritsos@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 24 Please refer to important disclosure at the end of the document


Agricultural Bank of Greece Underperform
Price: € 1.85 Financials 12M target price: € 1.80
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 0.96/2.47
We are concerned about asset quality deterioration, following the recent trends Market cap in € m 1,675.1
that showed a small acceleration in NPLs. Also we are cautious regarding ATE Reuters / Bloomberg AGBr.AT/ATE GA
bank’s prospects as the bank’s strategy remains unclear under the new Free float (e) 22.7%
government. Moreover, valuation at current levels seems quite demanding in our
view. Therefore, we retain our Underperform rating.
Expected return
Investment positives Upside to price target 2.3%
ATE Bank has been gaining market share in 2009 capitalising on its liquid balance Dividend yield estimate 2.0%
sheet; Solid NII increase on volume growth Total return forecast 4.3%

Has one of the largest network among its peers

Retains untapped sources of liquidity; loan to deposit ratio at 100% Trading Data
Absolute 3m 0.15%
Investment negatives -¨ ¨- 12m 31%
Relative to ATG 3m 32%
Highest NPL ratio at 7.3% (>90days); NPLs accelerated lately -¨ ¨- 12m -4%
3m avg. daily trading vol. in € m 2.5
Pre-provision earnings highly correlated to market performance Weight in ATG 0.02%

State induced lending to SME’s could potentially lead to second wave of NPL Price performance
formation, which might offset benefits from restructuring efforts Share performance

3200
High proportion of Gov Preferred to common equity could lead bank to seek capital
2800
Politically appointed management; subject to changes upon political developments 2
2400

2000
Catalysts
1600
Better/Worse than expected macro environment could affect asset quality and cost
of funding 1200
01-09

03-09

05-09

07-09

09-09

11-09
Could play an important role on new government plan for ‘green’ investing ATEbank S.A. Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates

Company description
Agricultural Bank (ATE Bank) was founded in 1929 as a non-
profit organization with the target of funding the agricultural
sector. In 1991, ATE was converted into a commercial bank
and in 2000 the bank was listed in the ASE with a free float of
15%. The bank currently has the 2nd largest branch network in
Greece (458) and is the 6th largest bank in terms of loans to
the private sector and 4th in terms of total assets and deposits.

Key financials 2007 2008 2009E 2010E 2011E


Net loans (Euro m) 16,743 20,854 22,348 24,440 26,377
Deposits (Euro m) 20,630 20,965 21,919 22,993 24,133
Total Assets (Euro m) 24,273 28,474 29,718 31,720 33,534
Pre-tax profit (Euro m) 317 15 123 118 173
Net profit (Euro m) 241 28 96 91 134
EPS (€) 0.27 0.03 0.11 0.10 0.15
EPS chng (%) 28% -89% 243% -5% 47%
ROE (%) 17.3% 2.4% 7.2% 5.0% 7.2%
ROA (%) 1.06% 0.11% 0.33% 0.29% 0.40%
P/E after tax (x) 14.3 45.5 17.5 18.5 12.5
P/BV (x)
Panagiotis Kladis, CFA
2.4 1.46 0.93 0.9 0.9
Analyst/Financials
Dividend yield (%) 2.6% 0.0% 2.0% 1.9% 2.7% +30210 7720 185
Cost/income 60% 74% 58% 61% 59% kladis@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 25 Please refer to important disclosure at the end of the document


ALAPIS N.A
Price: €0.44 Pharmaceuticals 12M target price: n.a.
(closing price 16/12/09)

Stock Data
Investment positives 52 week low / high 0.38-0.93
Market cap in € m 863
The pharmaceutical market is expected to grow at a CAGR of 8.3% in the 2008- Reuters / Bloomberg ALAr.AT /ALAPIS GA
2013 period below the double-digit growth of the 2000-2007 period. Notably, the Free float (e) 70%
outlook for the generics market is more optimistic with a projected CAGR of 17.3% Institutional ownership (e) 60%
in the 2008-2013 period.
Expected return
Strong relationships with multinationals that give the company access to a wide Upside to price target Na
customer base Dividend yield estimate Na
Total return forecast Na
Diversified product portfolio, a wide distribution network , strong infrastructure and
production capacity Trading Data
Absolute 3m -34%
Consolidator in the fragmented pharmaceutical markets of Greece and SEE. -¨ ¨- 12m -34%
Relative to ATG 3m -25%
Potential for cross synergies between business units - enabling the creation of a -¨ ¨- 12m -52%
vertically integrated platform / one stop shop in healthcare. 3m avg. daily trading vol. in € m 4.5
Weight in ATG 1.46%
Many patents will expire within the following 3 years giving the company the
opportunity of launching more generics and to capture the first mover’s advantage. Price performance
Share performance
Investment negatives 1 3200
Significant delays in the down payment of receivables in the healthcare sector
2800
Expected changes imminently in the pricing regulation of pharmaceuticals could
2400
put pressure on the company’s profitability
2000
Execution risk – may not be able to penetrate as fast as we expect the market
through its generics portfolio- 1600

1200
Competition could intensify with adverse effects for the company
01-09

03-09

05-09

07-09

09-09

11-09
Potential loss of key contracts would materially hurt the company’s revenues Alapis S.A. Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates


The Group faces the risk of exposure to product liability claims and adverse
publicity
Company description
Catalysts
Alapis Group resulted from the merger of Veterin SA, Lamda
Deregulation of the pharmaceutical market in Greece Detergent SA, EBIK SA and Elpharma SA. on June 01, 07. The
Group is involved in the manufacturing and distribution of
pharmaceuticals and parapharmaceutical products, veterinary
Growing economies and increased spending in SEE countries in healthcare pharmaceuticals, cosmetics, and detergents. In addition, it
distributes small animal accessories, medical equipment and
health equipment products. The company’s BUs can be
First mover advantage and gain of dominant position in the market grouped in 2 core categories: Healthcare (human health
pharmaceuticals, medical devices, veterinarian products) and
non-healthcare (detergents, cosmetics).
Key financials 2007 2007 PF 2008 2008 PF
Turnover (€ m) 442 1,119 1,136.29 1,344.58
EBITDA (€ m) 117 176.92 183.36 217.41
Net Income (€ m) 81.27 93.39 52.13 64.64
reported EPS (€) 0.19 0.10 0,0549 0.07
EPS chng (%) nm nm -72.1% -29.6%
rep. P/E (x) 10.1 21.86 8.3 6.7
EV/EBITDA (x) 5.0 nm 6.0 nm
P/BV (x) 1.4 nm 0.3 nm Ioanna Katsoula
Analyst
DPS (€) 0.02 nm 0.02 nm
+30210 7720184
Dividend Yield (%) 1.07 nm 3.34 nm katsoula@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates
* PF The Pro Forma Financial Information presents as at and for the year ended December 31, 2007, the hypothetical consolidated
balance sheet and income statement of the Company and its subsidiaries, as if the Company’s acquisitions which took place from
January 1, 2007 to June 30, 2009 had all taken place as of January 1, 2007and Jan 1, 2008 respectively.

Page 26 Please refer to important disclosure at the end of the document


ALPHA BANK Outperform
Price: € 8.55 Financials 12M target price: € 12.0
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 3.22/13.10
We believe Alpha Bank offers a combination of a strong balance sheet and a very Market cap in € m 4,568.0
attractive valuation. Following the successful rights issue, the group has a strong Reuters / Bloomberg ACBr.AT/ALPHA GA
capital base with a pro-forma Core Tier I at 9.3% and a tangible equity/assets ratio Free float (e) 91.0%
Institutional ownership (e) 50%
at 6.2%, indicating low leverage. The Group’s strong balance sheet will allow for
more aggressive expansion. In addition, recent results showed improving trends in
both NIM and asset quality.
Expected return
Investment positives Upside to price target 40.4%
Strong Balance sheet: enhanced capital base following the rights issue (Core Tier I Dividend yield estimate 2.50%
Total return forecast 42.9%
> 9%), untapped sources of liquidity, low leverage (TE/TA > 6%)

Long history and strong brand name which has resulted in strong client
relationships Trading Data
Absolute 3m -20.0%
Limited exposure to consumer credit at 12% of total loans -¨ ¨- 12m 78.0%
Relative to ATG 3m -8.0%
A recent organization restructuring could enhance the group’s efficiency -¨ ¨- 12m 30.0%
3m avg. daily trading vol. in € m 24.9
Investment negatives Weight in ATG 6.59%

Close to 15% of loan book exposed to real estate and construction


Price performance
SEE presence could be stronger and broader in order to create more earning Share performance

power 14 3200

Catalysts 12 2800
10
Better/Worse than expected macro environment could affect asset quality and cost 2400
of funding 8
2000
6

4 1600

2 1200
12-08

02-09

04-09

06-09

08-09

10-09
Alpha Bank A.E. Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates

Company description
Founded in 1879, Alpha Bank is the third largest bank in
Greece by market capitalization. The bank operates over 400
branches in Greece with a growing presence in SE Europe.

Key financials 2007 2008 2009E 2010E 2011E


Net Loans (€ m) 42,072 50,705 51,630 54,286 58,017
Deposits (€ m) 34,665 42,547 42,613 44,375 46,868
Revenues (€ m) 2,236 2,339 2,437 2,524 2,745
Pre-tax profits (€ m) 985 626 576 629 803
Net Profits (€ m) 770 450 323 405 579
EPS (€) 1.89 1.09 0.77 0.76 1.08
EPS chng (%) 36.5% -42.2% -30.0% -1.2% 43.1%
ROE (%) 25.2% 14.1% 8.8% 9.0% 11.9%
ROA (%) 1.63% 0.85% 0.68% 0.71% 0.84%
P/E (x) 13.1 6.1 11.2 11.3 7.9
P/BV (x) 3.00 0.91 0.83 0.99 0.90 Panagiotis Kladis, CFA
Dividend yield (%) 3.61% 0.00% 2.50% 2.75% 4.91% Analyst/Financials
+30210 7720 185
Cost/income 45.85% 50.38% 48.34% 48.02% 46.43% kladis@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 27 Please refer to important disclosure at the end of the document


AUTOHELLAS Outperform
Price: € 2.0 Transportation 12M target price: € 3.5
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 1.01-2.2
Letting aside size and liquidity restrictions, a dependable business model is driven Market cap in € m 72
by a cash-return-committed management and very supportive valuation. Our Reuters / Bloomberg AUTr.AT / OTOEL GA
valuation is derived from the average of dividend discount and discounted cash Free float (e) 27%
Institutional ownership (e) 16%
flow modeling with a largely stable dividend policy assumed and rather
conservative 3% annual growth in long term operating profitability.
Expected return
Upside to price target 87.9%
Investment positives Dividend yield estimate 7.5%
Total return forecast 95.4%
Largest Rent-a-Car in Greece with strong brand name (Hertz) and leading market
position. In-house repair canters offer synergies and shift towards fleet
management (70% of revenues) to reduce seasonality. Trading Data
Absolute 3m 6%
-¨ ¨- 12m 63%
Positive outlook for expanding contribution by Bulgarian, Cypriot and Romanian
Relative to ATG 3m 21%
operations. -¨ ¨- 12m 19%
Attractive valuation, relatively high and sustainable cash yield. 3m avg. daily trading vol. in € m 0.02
Weight in ATG n.a.

Investment negatives Price performance


Share performance
Relatively low free-float, limited coverage and liquidity concerns 2.5 3200

Highly fragmented and slow growing market renders operating profitability 2800
susceptible to cost controls and efficiency in operations 2.0
2400

1.5 2000

Catalysts 1600
1.0
Increase in penetration of corporate fleet in the total Greek car park (5% in Greece 1200
01-09

03-09

05-09

07-09

09-09

11-09
vs. 15-25% in EU) could significantly rise company’ fleet management car fleet
Autohellas S.A. Greece ATHEX Composite
Liberalization of the renting market (rent-a-van, chauffeur service, equipment Source: Company, JCF, National P&K Securities Research estimates
rental) will further enhance profitability

Company description
Autohellas is the largest R-a-C company in Greece and the
biggest national franchisee of Hertz International in Europe.
The company operates in Greece for more than 35 years
through 110 locations with a fleet exceeding 26,800 vehicles. It
runs similar, but minor in scale, operations in Bulgaria, Cyprus
and Romania.

Key financials 2007 2008 2009E 2010E 2011E


Turnover (€ m) 127.0 142.5 193.5 206.5 214.8
EBITDA (€ m) 75.1 80.7 83.7 91.9 97.6
Profit after-tax (€m) 15.6 13.4 18.1 20.2 21.9
reported EPS (€) 0.43 0.37 0.50 0.56 0.60
adj. EPS chng (%) -14.0% -14.0% 35.3% 11.6% 8.2%
rep.P/E (x) 9.5 3.3 4.0 3.6 3.3
EV/EBITDA (x) 3.8 3.1 3.1 2.6 0.0
P/BV (x) 1.0 0.4 0.6 0.5 0.5 Theodore Ritsos
DPS (€) 0.18 0.12 0.15 0.17 0.19 Research Director
+30210 7720 176
Dividend Yield (%) 6.1% 14.8% 6.0% 7.5% 8.5%
Source: Company, National P&K Securities Research estimates t.ritsos@nationalpk.nbg.gr

Page 28 Please refer to important disclosure at the end of the document


J&P AVAX Outperform
Price: € 2.97 Construction - Concessions 12M target price: € 5.9
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 1.61 - 4.08
We maintain our Outperform recommendation on the shares anticipating an Market cap in € m 231
increasing contribution from Greek BOOT projects coupled with maintenance of Reuters / Bloomberg AVAr.AT / AVAX GA
quite healthy margins going forward. Free float (e) 26.9%
Institutional ownership (e) 13.7%
Investment positives
High construction backlog at €2.9bn (c.3.0x FY ’09e sales) that breaks down to: a) Expected return
45% concessions (mainly in Greece and Cyprus), b) 55% private/public projects in Upside to price target 98.7%
Dividend yield estimate 2.4%
Greece, Cyprus, Middle East and Eastern Europe (mainly Poland). Total return forecast 101.0%

Well placed to win new infrastructure projects in Poland and in the Middle East.
Trading Data
Healthy construction margins. Construction EBIT margin remained at quite decent Absolute 3m -18%
levels of 4.6% (vs. 4.7% last year) in 9M’09 despite a weaker than expected -¨ ¨- 12m 33%
margin in Q3. Relative to ATG 3m -6%
-¨ ¨- 12m -3%
3m avg. daily trading vol. in € m 0.1
Participation in major Greek BOOTs. The Group has following key participations in
Weight in ATG 0.4%
domestic concessions: 30.8% in the Attica Ring Road, 20.5% in Rio-Antirio bridge,
21.0% in Olympia Odos and 21.25% in Maliakos-Kleidi.

The group does not have any exposure in Dubai. Its construction projects in the Price performance
Middle East refer mainly to the Queen Alia International Airport, which is self- Share performance
financed awarded by the government in Jordan. There are also smaller projects of 3200
subsidiary Athena in Abu Dhabi and in Qatar. Avax’s backlog in the Middle East 4
accounts for c.14% of its total backlog. 2800

Investment negatives 2400

2000
Very high leverage and increasing debt servicing costs. Net debt/EBITDA ratio
(including income from participations) is estimated at c.4.2x by year-end ’09. 2 1600

1200
The Greek state - Avax’s key client - has been consistently exhibiting significant
01-09

03-09

05-09

07-09

09-09

11-09
payment delays.
J&P-Avax S.A. Greece ATHEX Composite

Catalysts Source: Company, JCF, National P&K Securities Research estimates

The expected re-tendering of the Attica Ring Road and the tendering of the Kasteli
international airport in Crete (budget estimated at around €1.0bn).
Company description
J&P Avax is Greece’s second largest construction group and
The tendering of c. €5.2bn of new PPP projects. holder of three construction certificates. Furthermore, the group
maintains minority stakes in Greece’s major BOOT concessions.
J&P Avax is active in the following business areas:
Evolution of FX rates (particularly EUR vs. USD and Polish Zloty).
Construction: J&P Avax’s holds a leading position in the domestic
construction market while has expanded in CEE, Middle East and
Africa.
Concessions: The group holds stakes in Greece’s largest
concession projects while has geographically diversified its
concession portfolio in Cyprus and Jordan.
Other(Real Estate development & other): J&P Development
focuses on the development of residential and commercial
projects in Greece, Romania and Poland.

Key financials 2007 2008 2009E 2010E 2011E


Turnover (€ m) 683.3 991.1 967.3 999.0 1,012.0

EBITDA (€ m) * 47.2 51.1 66.4 69.0 70.3

Net Income (€ m) 25.4 21.0 29.7 31.5 30.5

reported EPS (€) 0.33 0.27 0.38 0.41 0.39

adj. EPS chng (%) -18.3% 24.3% 41.1% 6.1% -3.3%

rep. P/E (x) 19.7 8.4 7.8 7.3 7.6

EV/EBITDA (x) 12.6 7.4 6.8 6.8 6.7 Kostas Ntounas


2.0 0.7 0.9 0.8 0.7
Deputy Research Director
P/BV (x) Industrials/Energy/Construction Analyst
DPS (€) 0.12 0.05 0.07 0.07 0.07 +30210 7720 174
Dividend Yield (%) 1.9% 2.2% 2.4% 2.5% 2.4% ntounas@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates, * EBITDA doesn’t include income from participations.

Page 29 Please refer to important disclosure at the end of the document


COCA COLA HELLENIC Outperform
Price: € 16.30 Food & Beverages 12M target price: € 19.60
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 7.98 – 17.28
We maintain our Outperform rating having revised our target price upwards to Market cap in € m 5,956
€19.6/share to reflect a higher valuation for: a) successful cost containment due to Reuters / Bloomberg HLB.AT / EEEK GA
lower commodity costs and reduced Opex derived from an efficient restructuring Free float (e) 46%
Institutional ownership (e) 34%
plan, and b) due to the positive effect of an anticipated turnaround of the
economies of SEE as well as the appreciation of currencies in these markets. Expected return
Upside to price target 20.2%
Investment positives Dividend yield estimate 1.7%
Well positioned in South Eastern Europe where despite the crisis the Company Total return forecast 21.9%
managed to increase its market share in most of the markets
Trading Data
FCF of at least €1.2 bn and Capex up to €1.4 bn in the period from 2009-2011 Absolute 3m 5%
-¨ ¨- 12m 70%
Cost cutting efforts brought results in 2009 thus allowing the Company to maintain Relative to ATG 3m 21%
and increase margins in 2009 despite top line weakness. Operating leverage will -¨ ¨- 12m 24%
further boost earnings once top line strengthens 3m avg. daily trading vol. in € m 6.4
Weight in ATG 9.2%
Following the sharp depreciation of currencies at the end of 2008 the Company
enters 2010 with much easier comparables. In 2010, it is highly possible that sales
Price performance
will benefit from currency appreciation
Share performance

3200
The Company remains commited to innovation and product portfolio diversification
in order to boost pricing mix in most of its markets. 16 2800

Investment negatives 2400


12
2000
If the crisis persists and despite easy comparables for 2010 the Company may
face top line weakness with decreased volumes. 1600
8
1200
Difficult economic environment may result in additional pressure in the high margin
01-09

03-09

05-09

07-09

09-09

11-09
Immediate Consumption Channel
Coca-Cola Hellenic Bottling Co. S.A.
Greece ATHEX Composite
Catalysts
Source: Company, JCF, National P&K Securities Research estimates
A turnaround in the economies of SEE will boost Company’s profitability - in 2009
SEE will account for circa 46% of Company’s EBIT according to our estimates Company description
Coca-Cola Hellenic is the second largest bottler of The Coca
Expansion in new geographical regions Cola Company in terms of revenues and the third largest in
terms of volume unit cases sold. Coca Cola Hellenic is primarily
engaged in the production, sale and distribution of non-
Potential acquisition that will enhance Company’s product portfolio in the alcoholic beverages. The Company's product portfolio includes
categories of juice and water sparkling beverages (Carbonated RTD Beverages excluding
sparkling water), Still Beverages (Non RTD juice, sport drinks,
tea, coffee and other Non-CSD products) and water (both still
and sparkling). The Company has operations in 28 countries
and serves more than 550 million customers. It operates in
three major geographical segments; the established, the
developing and the emerging segments.

Key financials 2007 2008 2009E 2010E 2011E


Turnover (€ m) 6461.9 6980.7 6556.8 6849.2 7198.0
EBITDA (€ m) 1066.6 1039.0 1018.5 1095.7 1143.1
EPS (€) 1.30 1.16 1.16 1.24 1.29
EPS chng (%) 24.3% -10.4% -0.6% 7.3% 4.1%
P/E (x) 22.8 8.9 14.1 13.1 12.6
EV/EBITDA (x) 11.8 5.7 8.2 7.5 6.9
FCF yield (%) 1.0% 0.6% 8.2% 8.8% 8.9%
RoE (%) 17.0% 7.9% 16.3% 16.7% 15.3%
RoIC (%) 11.6% 10.4% 9.5% 10.2% 10.4% Iakovos Kourtesis
DPS (€) 0.25 0.28 0.28 0.28 0.28 Food & Beverages Analyst
+30210 7720 251
Dividend Yield (%) 0.8% 2.6% 1.7% 1.7% 1.7% ikourtesis@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 30 Please refer to important disclosure at the end of the document


CORINTH PIPEWORKS Underperform
Price: € 1.44 Industrials 12M target price: € 1.50
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 0.80 - 2.48
We maintain our Underperform recommendation and our target price of €1.5 per Market cap in € m 171
share. We expect a deterioration of volumes and lower margins on projects due to Reuters / Bloomberg CORr.AT / SOLK GA
a) the postponement and even cancellation of pipeline projects worldwide (e.g. the Free float (e) 20%
Nabucco pipeline is now expected for 2011-2012), b) the depreciation of the USD, Institutional ownership (e) 13%
and c) increased competition. We note however, that the company remains in
close proximity to the most profitable area of pipeline construction in the future and Expected return
is furthermore set to capture growth in the region. Upside to price target 8.7%
Dividend yield estimate 0.0%
Investment positives Total return forecast 8.7%
Fast growing energy markets to drive demand for pipelines in the medium to long
run.
Trading Data
Global presence with subsidiary company in Houston, USA, and cooperating Absolute 3m -34%
offices in 24 countries. -¨ ¨- 12m 57%
Relative to ATG 3m -21%
Promising partnership with TMK and entry into the Russian market. -¨ ¨- 12m 33%
Low capacity utilisation rate at the Thisvi plant, and end of investments to expand 3m avg. daily trading vol. in € m 0.163
capacity and product range in 2008. Weight in ATG 0.2%

Broadest product range of HSAW pipes in the market and pioneer user of X-80
steel grade. Price performance
Share performance
Investment negatives 3200
Global economic slowdown affects the construction of pipelines. 2800
2
Exposure to the price of oil and natural gas, and potential impact on orders if oil 2400
price goes below $40 a barrel.
2000
Dependency on the price of high-grade coil and bargaining power of suppliers.
1600

Catalysts 1200
01-09

03-09

05-09

07-09

09-09

11-09
New pipeline projects requiring high quality and technologically advanced pipes,
such as the Bourgas – Alexandroupoli pipeline in the Balkans. Corinth Pipeworks S.A. Greece ATHEX Composite

Addition of new high value added products and extension of the product range.
Source: Corinth Pipeworks, JCF, National P&K Securities Research estimates

Company description
Corinth Pipeworks (CPW) was founded in 1969, and listed on
the Athens Stock Exchange in 1998. It is specialised in the
production of steel pipe and hollow sections for the oil, gas,
water and construction industry. It has a global presence with a
representative sales network throughout the world. CPW
annual capacity is up to 700 KMT. Total annual sales in 2008
reached €385m and total annual volume 325 KMT.

Key financials 2007 2008 2009E 2010E 2011E


Turnover (€ m) 358 385 332 235 344
EBITDA (€ m) 60 31 38 14 47
Profit after-tax (€m) 34 9 21 -0.5 26
EPS (€) 0.27 0.07 0.17 0.00 0.21
EPS chng (%) -6.7% -73.9% 132% -103% n.a.
P/E (x) 21.8 12.3 10. n.a. 6.5
EV/EBITDA (x) 13.8 5.1 6.1 17.0 5.2
Victor Labate
FCF yield (%) 3.5% 31.3% -7.9% -1.3% -12.6% Oil & Gas / Industrials Analyst
DPS (€) 0.0 0.0 0.0 0.0 0.0 +30210 7720 076
Dividend Yield (%) 0.0% 0.0% 0.0% 0.0% 0.0% labate@nationalpk.nbg.gr
Source: Corinth Pipeworks, National P&K Securities Research estimates

Page 31 Please refer to important disclosure at the end of the document


BANK OF CYPRUS Outperform
Price: € 4.72 Financials 12M target price: € 6.10
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 1.55/6.24
We retain our positive stance on Bank of Cyprus as the recent results showed that Market cap in € m 2,769.0
the group fundamentals are improving on the back of the macroeconomic Reuters / Bloomberg BOC.AT/BOC GA
recovery, most importantly in Cyprus and Russia. Furthermore, BoC retains a Free float (e) 100%
Institutional ownership (e) 37.6%
strong balance sheet with comfortable liquidity (L/D ratio at 89%) and capital ratios
(Core Tier I at 7.9%). Valuation is also attractive in our view.
Expected return
Upside to price target 28.6%
Investment positives Dividend yield estimate 3.56%
Total return forecast 32.16%
BoC is the national champion in the Cypriot economy, which despite its small size
has proved to be very resilient, outperforming most EU peers
Trading Data
Liquidity remains a strong advantage for the bank which has a L/D at 89% and an Absolute 3m -0.04%
unutilised asset base; all core regional operations are self funded -¨ ¨- 12m 87%
Relative to ATG 3m 11%
Not part of any government support plan, hence not subject to political intervention -¨ ¨- 12m 36%
3m avg. daily trading vol. in € m 11.8
Committed to shareholders; paying dividends consistently and providing guidance
Weight in ATG 4.2%
even in adverse conditions

Exposure to the promising Russian market through the underutilised network of Price performance
Uniastrum Bank Share performance

3200
6
Investment negatives 2800

Profitability is not diversified. More than 70% of net profit is generated from the 2400
Cypriot operations 4
2000

Cypriot economy is largely affected by the real estate market and tourism which 1600
both depend to a large extent on foreigners, mostly Russian and British. Both 2
sectors are still facing challenges in the after math of the global recession. 1200
01-09

03-09

05-09

07-09

09-09

11-09
Catalysts Bank of Cyprus PCL Greece ATHEX Composite

A stronger than expected recovery of Russian economy could jumpstart Uniastrum


operations. Source: Company, JCF, National P&K Securities Research estimates

Better/Worse than expected macro environment in Greece could affect asset


quality and cost of funding Company description
Bank of Cyprus is the largest financial services group in Cyprus
with a 30% share in deposits and 26% in loans in the local
banking sector market and a continuously growing presence in
Greece and Russia.

Key financials 2007 2008 2009E 2010E 2011E


Net Loans (€ m) 18,921 24,449 25,100 26,010 27,627
Deposits (€ m) 25,179 27,936 29,283 30,551 32,405
Revenues (€ m) 1,110 1,229 1,270 1,294 1,374
Pre-tax profits (€ m) 577 575 373 372 422
Net Profits (€ m) 480 526 328 312 354
EPS (€) 0.86 0.90 0.56 0.53 0.60
EPS chng (%) 51.1% 4.1% -37.5% -4.9% 13.4%
ROE (%) 27.3% 26.3% 15.4% 13.3% 13.7%
ROA (%) 1.69% 1.55% 0.89% 0.80% 0.87%
P/E (x) 5.5 5.3 8.4 8.9 7.8
Panagiotis Kladis, CFA
P/BV (x) 1.41 1.36 1.24 1.13 1.02
Analyst/Financials
Dividend yield (%) 9.32% 5.89% 3.56% 3.38% 3.84% +30210 7720 185
Cost/Income (%) 43.8% 44.9% 50.5% 51.8% 51.5% kladis@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 32 Please refer to important disclosure at the end of the document


DUTY FREE SHOPS Neutral
Price: €6.18 Retail 12M target price: € 7.69
(closing price 16/12/2009)

Recommendation Stock Data


52 week low / high 3.20-7.50
The uncertainty concerning the effects of the macroeconomic downturn lead us to Market cap in € m 325.5
remain cautious on the HDFS group, as the majority of its divisions are exposed to Reuters / Bloomberg HDFr.AT/HDF GA
consumers’ discretionary spending. Even if disposable income is not significantly Free float (e) 22%
Institutional ownership (e) 18%
impacted, low consumer confidence leads to soft consumer spending.
Furthermore, we identify additional risks concerning the group’s leverage and FΧ
exposure. The company trades at 6.7x its’10 earnings at a strong discount vs.
the DJ Euro Stoxx Retail Benchmark (standing at 14.6x) and its 5-year historical 2- Expected return
year forward P/E standing at c.13x. The company’s low free float and liquidity Upside to price target 24.4%
justify at a certain point the strong discount. Dividend yield estimate 7.4%
Total return forecast 31.8%
Investment positives
Concession owner of existing and future duty free shops at Greek exit points till
2048 - Strong barriers to entry Trading Data
Absolute 3m -12%
Marketing a portfolio of leading brands through Elmec Sport with extensive -¨ ¨- 12m 14%
networks in Greece, Bulgaria and Romania Relative to ATG 3m +1%
-¨ ¨- 12m -17%
3m avg. daily trading vol. in € m 0.1
Leading Department stores in Greece gaining market share on industry
Weight in ATG NA
consolidation
Duty Free core operation has low WC needs – cash generation – high DY
Price performance
Share performance
3200
Investment negatives
2800
Dependency on consumer spending levels – trends/ Passenger traffic 6
2400
levels/tourism
2000
Potential delays in the new POS/ Department stores rollout
4 1600

Highly leveraged B/S -interest rate levels affect profitability 1200


01-09

03-09

05-09

07-09

09-09

11-09
Hellenic Duty Free Shops S.A. Greece ATHEX Composite

Catalysts Source: Company, JCF, National P&K Securities Research estimates

Distribution agreements with more brands in Greece and SEE


Company description
New Department stores in Greece and Bulgaria, Romania The Group consists of the HDFS parent company that operates
in the Duty Free Retail Sector and holds 100% of Links of
Upgrade/Expansion of small popular regional airports in Greece London – a Jewellery company operating mainly in the UK but
also expanding into Japan and Hong Kong- and 96% of Elmec
Sport – operating in the Wholesale and Retail markets in
Resolution of the duty free fuel sales legal issue clothing and apparel, in Department stores, and Discount
Department stores. The HDFS parent company owns a 50yr
New product introduction jointly with travel agency could boost sales concession (since Jan 1st, '98) to operate existing and future
duty free (paid €58.7m).

Key financials 2007 2008 2009E 2010E 2011E


Turnover (€ m) 414 617 629 648 719
EBITDA (€ m) 69.8 96.9 95.8 99.5 115.0
Net profit (€m) 33.6 43.1 44.6 47.5 55.1
Reported EPS (€) 0.65 0.83 0.86 0.92 1.06
EPS chng (%) -21.0% 28.1% 4.1% 6.5% 16.1%
Rep. P/E (x) 9.6 7.5 7.2 6.7 5.8
EV/EBITDA (x) 13.3 6.7 6.9 6.6 5.6
ROE (%) 25.2% 31.8% 31.1% 29.4% 29.3% Ioanna Katsoula
Analyst
ROIC(%) 7.8% 11.9% 11.4% 11.5% 12.5%
+30210 7720184
Dividend Yield (%) 5.5% 8.2% 7.4% 8.1% 8.3% katsoula@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 33 Please refer to important disclosure at the end of the document


ELLAKTOR Outperform
Price: € 5.27 Construction - Concessions 12M target price: € 7.8
(closing price 16/12/09)

Recommendation Stock Data


We buy Ellaktor as it combines defensive characteristics (concessions account for 52 week low / high 3.40- 6.74
Market cap in € m 925
c.60% of the Group’s operating profits, good visibility in construction) with growth Reuters / Bloomberg HELr.AT / ELLAKTOR GA
prospects associated with the Group’s fast growing presence in Free float (e) 60%
RES/Environmental operations. Institutional ownership (e) 46%

Investment positives
Healthy fundamentals, defensive characteristics and a solid operating Expected return
Upside to price target 48.0%
performance despite adverse macro conditions.
Dividend yield estimate 2.2%
Total return forecast 50.2%
High construction backlog of €3.5bn (2.3x FY ’09e sales) provides good visibility
for 2010 and for the most part of 2011.
Trading Data
Stabilization of construction margins going forward. Absolute 3m -14%
-¨ ¨- 12m 32%
Strong revenue and profitability visibility from the Attica Ring Road. Relative to ATG 3m -1%
-¨ ¨- 12m -3%
3m avg. daily trading vol. in € m 1.5
Expansion of BOOT portfolio in SEE; preferred bidder in Romania’s €2bn first toll-
Weight in ATG 1.4%
road concession (50% partnership with Vinci). Well-positioned to become a key
player in the Balkans.
Price performance
Share performance
Quite attractive valuation to its peers (trades at a double-digit discount on any
valuation metric). 3200

2800
Investment negatives 6
2400
The Greek State - Ellaktor’s major client - has been consistently exhibiting
significant payment delays. 2000

1600
A rather complicated group structure with numerous participations in non-listed 4
companies and non-core activities. 1200
01-09

03-09

05-09

07-09

09-09

11-09
Uncertainty related to the substantial delays in the implementation of the Blue City Ellaktor S.A. Greece ATHEX Composite
project in Oman.
Source: Company, JCF, National P&K Securities Research estimates

Catalysts
The expected re-tendering of the Attica Ring Road and the tendering of the
Company description
Kasteli international airport in Crete (budget estimated at around €1.0bn). Ellaktor is a holdings company with operations in:
Construction: Aktor is the group’s key productive force and
The tendering of c. €5.2bn of new PPP projects. largest construction company in Greece. Aktor’s backlog is at
historical levels at c. €5bn.
Concessions: Aktor Concessions has the largest domestic
Continuation of restructuring and the completion of permitting process on concessions portfolio after totally absorbing the group’s
concession activities.
environmental issues in the Group’s mining activities in Northern Greece. Environmental: Helector is active in waste collection and
management as well as energy production from Renewable
Energy Sources.
RES: ELTECH Wind incorporates the group’s wind energy
operations following the recent restructuring in the wind energy
division.
Real Estate: REDS focuses on the development of shopping and
leisure centers, offices, mixed-use and residential projects.
Other Holdings: The group maintains minority shareholdings in
Hellenic Casino of Parnitha, European Goldfields and Hellas Gold.

Key financials 2007 2008 2009E 2010E 2011E


Turnover (€ m) 914.7 1,913.0 2,055.5 1,952.5 1,617.8

EBITDA (€ m) 108.3 310.1 314.6 342.7 357.5

Net Income (€m) 129.8 94.8 92.3 103.9 121.9

reported EPS (€) 0.81 0.54 0.54 0.60 0.71

adj. EPS chng (%) 42.6% 26.7% -0.9% 12.5% 17.4%

rep. P/E (x) 12.0 7.9 9.8 8.8 7.5

EV/EBITDA (x) 13.7 5.3 6.2 5.6 5.1


Kostas Ntounas
P/BV (x) 1.6 0.8 0.9 0.9 0.8 Deputy Research Director
DPS (€) 0.18 0.12 0.12 0.13 0.15 Industrials/Energy/Construction Analyst
+30210 7720 174
Dividend Yield (%) 1.8% 2.8% 2.2% 2.5% 2.9%
ntounas@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 34 Please refer to important disclosure at the end of the document


EUROBANK EFG Outperform
Price: € 7.95 Financials 12M target price: € 11.0
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 3.37/12.94
We are positive on EFG as we believe that the improvement in Group’s operating Market cap in € m 4,281.8
performance shown lately will continue, driving the group’s profitability higher. EFG Reuters / Bloomberg EFGr.AT/EUROB GA
is proving the most successful in cost containment among its peers while revenue Free float (e) 59%
Institutional ownership (e) 22.8%
and asset quality trends were improved recently. The group’s broad exposure in
SEE we believe can generate positive earnings surprises.
Expected return
Investment positives Upside to price target 38.6%
Focused management on delivering set targets; good track record; has grown into Dividend yield estimate 2.16%
one of Greece’s top three banks only in just two decades of operation Total return forecast 40.76%

Broad base presence, not particularly focused on one country, except for Greece. Trading Data
Absolute 3m -0.17%
Its future earnings power from SEE could be substantially higher than that of its -¨ ¨- 12m 55%
peers Relative to ATG 3m -5%
-¨ ¨- 12m 13%
Committed to financial innovation and client service 3m avg. daily trading vol. in € m 15.5
Weight in ATG 6.7%
Investment negatives
Price performance
High proportion of Gov Pfd capital to common equity. Repayment could lead to
equity offering. Company has repeatedly denied their need of fresh capital Share performance

3200
Limited capacity to further securitize loan book 12
2800
10
2400
One of the most exposed banks to consumer credit in our coverage 8
2000
Catalysts 6
1600
4
Economic recovery in the region, the bank has the most earnings power among 1200
domestic peers.
01-09

03-09

05-09

07-09

09-09

11-09
EFG Eurobank Ergasias S.A.
Better/Worse than expected macro environment in Greece could affect asset Greece ATHEX Composite

quality and cost of funding


Source: Company, JCF, National P&K Securities Research estimates

Company description
EFG was established in 1990 and is the 2nd largest bank in
Greece by market capitalization. Today, Eurobank EFG is a
European banking organisation that employs over 19,000
people and offers its products and services both through its
network of over 1,400 branches and points of sale and through
alternative distribution channels.
Key financials 2007 2008 2009E 2010E 2011E
Net Loans (€ m) 45,638 55,878 55,217 57,823 61,865
Deposits (€ m) 36,151 45,656 47,794 50,140 52,881
Revenues (€ m) 2,817 3,277 3,069 3,127 3,408
Pre-tax profit (€ m) 1,050 818 454 503 759
Net profit (€ m) 851 652 370 400 603
EPS (€) 1.67 1.24 0.70 0.74 1.12
EPS chng (%) 18.0% -26.00% -43.26% 5.89% 50.80%
ROE (%) 23.6% 16.6% 9.8% 9.8% 13.7%
ROA (%) 1.33% 0.87% 0.44% 0.47% 0.68%
P/E (x) 14.4 4.6 11.3 10.7 7.1
P/BV (x) 2.97 0.84 1.08 1.02 0.93 Panagiotis Kladis, CFA
Dividend yield (%) 3.37% 0.00% 2.16% 2.34% 4.23% Analyst/Financials
+30210 7720 185
Cost/income (%) 48.8% 47.8% 47.9% 48.6% 46.7%
Source: Company, National P&K Securities Research estimates
kladis@nationalpk.nbg.gr

Page 35 Please refer to important disclosure at the end of the document


EYATH U/R
Price: € 4.90 Utilities 12M target price: UR
(closing price 16/12/09)

Investment positives Stock Data


Secure status under a regulated monopoly 52 week low / high 3.98 - 7.72
Market cap in € m 177.9
Reuters / Bloomberg EYATHr.AT / EYAPS GA
Headcount reduction Free float (e) 26%

Trades at a discount vs. its peer group

The company has agreed with telecom providers in order to develop wireless Expected return /Valuation
network via the installation of base stations Upside to price target N/A
Dividend yield estimate N/A
Total return forecast N/A
Investment negatives
Water losses, reflecting the poor state of the existing distribution network, have a
detrimental effect on revenues
Trading Data
EYATH Pagion has not fulfilled its commitment related with the realization of the Absolute 3m -0.09%
-¨ ¨- 12m 18%
company’s investment program
Relative to ATG 3m -4%
-¨ ¨- 12m -14%
Cancellation of the tender regarding potential placement 3m avg. daily trading vol. in € m 0.25
Weight in ATG N/A
Catalysts
Payment collection from bulk customers such as municipalities

Geographical expansion
Price performance
Management change Share performance

8 3200
The advent of a strategic investor will result in synergies on a number of issues
2800

6 2400

2000

4 1600

1200
01-09

03-09

05-09

07-09

09-09

11-09
Thessaloniki Water Supply & Sewerage Co. S.A.
Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates

Company description
Listed in the ASE since September 2001, EYATH is the 2nd
largest water supply and sewage regional monopoly serving
more than 1,100,000 consumers in the Greater Thessaloniki
area, Greece’s 2nd largest city. The Greek state is the
controlling shareholder with 74.02% of outstanding shares.

Key financials 2005 2006 2007 2008


Turnover (€ m) 60 66 70 76
EBITDA (€ m) 16 19 22 25
Net profit (€ m) 7.9 9.2 12 15
EPS (€) 0.44 0.25 0.34 0.42
Adj. EPS chng (%) 107% -42% 35% 22%
P/E (x) 5.6 13 18 10
EV/EBITDA (x) 5.5 6.1 9.9 5.7
P/BV 0.7 0.8 2.8 1.7
RoE (%) 12% 13% 15% 18% George Vitorakis
Analyst
DPS (€) 0.16 0.18 0.12 0.14 +30210 7720 151
Dividend Yield (%) 6.4% 5.6% 1.9% 3.3% gvitorakis@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 36 Please refer to important disclosure at the end of the document


EYDAP U/R
Price: € 5.80 Utilities 12M target price: UR
(closing price 16/12/09)

Stock Data
Investment positives 52 week low / high 4.50-7.49
Market cap in € m 617.7
Resilient sector Reuters / Bloomberg EYDr.AT / EYDAP GA
Free float (e) 28%
Secure status under a regulated monopoly
Headcount reduction
Expected return /Valuation
Upside to price target N/A
Dividend yield estimate N/A
Investment negatives Total return forecast N/A
The Greek State has not fulfilled its commitment to cover 60% of capex, for
upgrades of the existing network
Trading Data
High receivables mainly in the face of municipalities Absolute 3m -0.03%
-¨ ¨- 12m 18%
Trades at a premium vs. its peer group Relative to ATG 3m 11%
-¨ ¨- 12m -14%
Water losses, reflecting the poor state of the existing distribution network, have a 3m avg. daily trading vol. in € m 0.32
detrimental effect on revenues Weight in ATG 0.9%

Catalysts
Price performance
Payment collection from bulk customers such as municipalities
Share performance
Geographical expansion 8 3200

Effective restructuring 2800


6
Long-term setting of tariff policy according to the Company’s operating and 2400

investment needs 2000


4
1600

2 1200
01-09

03-09

05-09

07-09

09-09

11-09
Athens Water Supply & Sewerage Co. S.A.
Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates

Company description
Listed in the ASE in December 1999, EYDAP is the largest
water and sewage regional monopoly in Greece serving more
than five million consumers in the Greater Athens area. The
Greek state is the controlling shareholder with 61% of
outstanding shares.

Key financials 2005 2006 2007 2008


Turnover (€ m) 349 362 388 403
EBITDA (€ m) 67 78 88 82
Adj. net profit (€ m) 20 33 43 31
EPS (€) 0.19 0.31 0.41 0.29
Adj. EPS chng (%) 301% 66% 30% -28%
P/E (x) 38 23 29 18
EV/EBITDA (x) 13 11 16 9
P/BV 1.0 1.0 1.5 0.7
RoE (%) 2.7% 4.3% 5.4% 3.8% George Vitorakis
Gaming Analyst
DPS (€) 0.07 0.11 0.14 0.13 +30210 7720 151
Dividend Yield (%) 1.0% 1.5% 1.2% 2.5% gvitorakis@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 37 Please refer to important disclosure at the end of the document


FOLLI FOLLIE Outperform
Price: € 14.34 Retail 12M target price: € 19.0
(closing price 16/12/2009)

Recommendation Stock Data


52 week low / high 4.56-17.25
The group’s operating performance has so far shown that diversification in product Market cap in € m 472.5
mix and geographic presence has been a successful strategy for the Group. Reuters / Bloomberg FOLr.AT/FOLLI GA
Favourable FX (translational, transactional and financial through hedging) along Free float (e) 50%
Institutional ownership (e) 42.2%
with lower interest rates further enhanced the group’s profitability. The fact that the
source of 52% of its operating profitability is the Folli Follie core operation and is
largely derived in Asia and Japan, is positive for the stock taking into account the Expected return
negative outlook for the Greek market. Despite some positive signs of improved Upside to price target 32.5%
WC management which led to cash flow generation and net debt declines in 9m Dividend yield estimate 0.85%
09, we would like to see additional evidence on the sustainability of these trends. Total return forecast 33.35%
However the attractive valuation at current levels mitigates our concerns. The
company trades at 4.9x its’10 earnings at a significant discount both vs. its wider
peer group (standing at c. 18x) and the DJ Euro Stoxx Retail Benchmark (standing
Trading Data
at 14.6x). Finally we should note that the company’s 5-year historical 2-year Absolute 3m -15%
forward P/E stands at c.9x. -¨ ¨- 12m +139%
Relative to ATG 3m -2%
Investment positives -¨ ¨- 12m +74%
3m avg. daily trading vol. in € m 1.33
Standalone business is well positioned in the affordable luxury sector - Value-for-
Weight in ATG 0.69%
money concept makes FF defensive at times of economic slowdown

The group’s diversification in different sectors and markets gives a competitive Price performance
advantage vs. other retailers Share performance

Strong presence in the Far East, where consumer spending on luxury items is 3200

higher than in the western world 16


2800

12 2400

Investment negatives 8
2000

1600
The efficient integration of all the subsidiaries, which will enable the company to
materialise the respective synergies, runs execution risks 4 1200
01-09

03-09

05-09

07-09

09-09

11-09
High leverage with limited visible improvement in WC needs Folli-Follie S.A.
Greece ATHEX Composite

Complex structure- the group owns three listed entities. Source: Company, JCF, National P&K Securities Research estimates

Catalysts
Further consolidation of the Greek market in favour of department stores and malls Company description
The Group consists of Folli Follie Standalone company and
Expansion of operations in new regions- US penetration with Folli Follie and Links holds 56% of Duty Free Shops Group (since July 06). Folli
Follie Standalone designs, produces and sells via a mainly
brands proprietary distribution network a wide variety of jewellery,
watches and associated fashion accessories. At the end of 9m
Penetration in new sectors such as children wear 09 it operated 365 POS in 24 countries with focus in Asia and
Japan.

Key financials 2007 2008 2009E 2010E 2011E


Turnover (€ m) 706 937 1002 1034 1129
EBITDA (€ m) 158 191 204 209 232
Net profit (€m) 73 77 101 95 105
Reported EPS (€) 2.22 2.35 3.08 2.91 3.21
EPS chng (%) 12.4% 5.8% 30.8% -5.4% 10.4%
Rep. P/E (x) 11.5 2.5 4.7 4.9 4.5
EV/EBITDA (x) 10.2 5.4 6.1 6.1 5.3
ROE (%) 37.9% 33.2% 32.4% 24.1% 22.0% Ioanna Katsoula
ROIC(%) 11.8% 13.3% 13.1% 12.9% 13.6% Analyst
+30210 7720184
Dividend Yield (%) 0.39% 1.74% 0.85% 0.83% 0.94% katsoula@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 38 Please refer to important disclosure at the end of the document


FORTHNET Outperform
Price: € 1.09 Telecommunications 12M target price: € 2.1
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 0.56 - 2.24
Our positive neutral stance is based on a gradually established market position as Market cap in € m 169
a provider of choice among altnets, successful integration and expansion of pay Reuters / Bloomberg FORr.AT / FORTH GA
TV unit (i.e. new service plans, war against piracy), and the deteriorating financial Free float (e) 66%
Institutional ownership (e) 45%
position of key altnet competitors.

Expected return
Investment positives Upside to price target 92.7%
Dividend yield estimate 0.0%
Exposure to the highly attractive Greek broadband market and incumbent OTE Total return forecast 92.7%
maintains relatively high market share.
Strong brand name and early mover advantage reflected in leading market shares Trading Data
in broadband and unbundled customers. Content and new pricing of Nova Pay TV Absolute 3m -33%
likely to support country-wide triple play offers and boost customer loyalty. -¨ ¨- 12m 76%
Relative to ATG 3m -23%
Improving market share momentum in new broadband customers and early signs -¨ ¨- 12m 28%
of easing pricing pressures as competitors struggle with financial burdens. 3m avg. daily trading vol. in € m 0.46
Weight in ATG (%) 0.27

Investment negatives Price performance


Share performance
Possibly optimistic company targets: ARPU levels may drop faster due to 2.5 3200
undercutting by competing operators.
2800
2.0
Relatively limited, but improving, retail network and execution risk against better 2400
established outlets of incumbent OTE, Tellas/Wind, Vodafone. 1.5
2000
New technology cycles, like fiber to the premise (FTTP) or VDSL, may swift 1.0
current focus from unbundler to reseller (with a negative impact on margins) or 1600

require additional funding and CAPEX. 0.5


1200
01-09

03-09

05-09

07-09

09-09

11-09
Forthnet S.A. Greece ATHEX Composite
Catalysts Source: Company, JCF, National P&K Securities Research estimates

Further M&A among smaller players (HOL, On Telecoms) may improve industry
structure and reduce pricing pressures. Company description
Started as a major Internet Service provider, Forthnet is now a
major facility -based alternative fixed line operator employing
an expanding owned network to offer VoiP based broadband
services in voice, data, and video. It has recently completed the
acquisition of Net Med, sole Pay TV provider in Greece, to
support triple play services.
Key financials 2007 2008 2009E 2010E 2011E
Turnover (€ m) 118.8 211.8 377.8 411.7 443.3
EBITDA (€ m) -20.1 9.6 60.3 76.8 91.1
Profit after-tax (€m) -32.5 -40.5 -5.4 3.5 11.7
reported EPS (€) -0.84 -0.52 -0.03 0.02 0.08
adj.EPS chng (%) n.m. n.m. n.m. n.m. 235.6%
rep.P/E (x) n.m. n.m. n.m. 48.5 14.5
EV/EBITDA (x) n.m. 44.7 8.9 6.8 5.4
FCF yield (%) 2.3 0.3 0.4 0.4 0.4 Theodore Ritsos
DPS (€) 0.00 0.00 0.00 0.00 0.04 Research Director
+30210 7720 176
Dividend Yield (%) 0.0% 0.0% 0.0% 0.0% 3.8% t.ritsos@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 39 Please refer to important disclosure at the end of the document


FOURLIS Outperform
Price: € 8.60 Retail 12M target price: € 13.00
(closing price 16/12/2009)

Recommendation Stock Data


52 week low / high 4.72 -12.28
We remain positive on Fourlis due to its current attractive valuation and the fact Market cap in € m 438
that its profitability is expected to remain robust (+11% yoy) in the following year, Reuters / Bloomberg FRL.AT / FOYRK GA
notwithstanding the current challenging environment, while the expansion plan it Free float (e) 70%
Institutional ownership (e) 64%
has in place is expected to help secure the company’s longer-term growth
prospects. We therefore, reiterate our outperform rating and set our TP at €13 per
share. The stock is trading at a 25% discount vs. the DJ Euro Stoxx Retail Expected return
Benchmark and 34% below its 5-year historical average in terms of P/E. Upside to price target 51.2%
Dividend yield estimate 2.4%
Investment positives Total return forecast 53.6%
Fourlis product portfolio comprises leading brands in all segments with rising
market shares Trading Data
Absolute 3m -21%
Successful and long-term presence in both retail and wholesale sectors-efficient -¨ ¨- 12m +70%
management Relative to ATG 3m -9%
-¨ ¨- 12m +24%
Strong infrastructure (POS/ high-tech logistics center) 3m avg. daily trading vol. in € m 0.8
Weight in ATG 0.69%
Healthy balance sheet

Investment negatives Price performance


Share performance
Dependent on consumer spending levels and trends 3200
12

Currency risks mainly from its exposure in Romania 2800


10
2400
Potential delays in the stores’ rollout in Greece and the Balkans entail risks to top
8
line growth 2000

6 1600
Potential loss of franchise/exclusive brands
1200
01-09

03-09

05-09

07-09

09-09

11-09
Catalysts Fourlis Holdings S.A. Greece ATHEX Composite

Enrichment of product mix with further brands or items Source: Company, JCF, National P&K Securities Research estimates

Expansion of the retail network


Company description
Additional IKEA franchises assumed by Fourlis in other markets Fourlis is a leading retailer in home furniture via the IKEA brand
name – the exclusive provider of the world branded products
Adopting new retail concepts in current markets and/or divestiture of non-core and for Greece and Cyprus, with 5 stores currently, 1 more planned
in Greece and 1 in Bulgaria over the next 2 years. The
low margin wholesale division company also operates 48 outlets in athletic products under the
Intersport world brand name in Greece, Cyprus, Romania and
Bulgaria. Finally it operates an electric goods wholesale
division with exclusive rights to leading brands such as
Samsung, GE, Liebher.
Key financials 2007 2008 2009E 2010E 2011E
Turnover (€ m) 670 784 749 769 822
EBITDA (€ m) 83 102 72 76 87
Net profit (€m) 46 55 33 40 47
Reported EPS (€) 0.91 1.1 0.64 0.79 0.93
Adj. EPS chng (%) 59% -3% -6% 11% 17%
Rep. P/E (x) 29.9 7.9 12.1 10.9 9.3
EV/EBITDA (x) 17.7 3.7 7.3 6.9 6.2
ROE (%) 34.9% 31.3% 15.6% 17.5% 18.1%
Ioanna Katsoula
Analyst
ROIC(%) 20.2% 20.9% 13.1% 13.9% 14.4% +30210 7720184
Dividend Yield (%) 3.5% 4.2% 2.4% 3.5% 3.8% katsoula@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 40 Please refer to important disclosure at the end of the document


FRIGOGLASS Underperform
Price: € 7.50 Industrials 12M target price: € 6.0
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 2.75 - 9.35
We maintain our Underperform recommendation and our target price stands at Market cap in € m 277
€6.0 per share. Firstly, Frigoglass remains overpriced, with a historically high ’09 Reuters / Bloomberg FRIr.AT / FRIGO GA
PE at 39.3x (’10 PE: 18.2x) and ’09 EV/EBITDA of 9.6x (’10 EV/EBITDA 7.5x), in Free float (e) 56%
our view. Secondly, we believe that a recovery will be slower than expected with Institutional ownership (e) 8.6%
beverage bottlers capex expected to be cut from ’08 levels in 2010. Thirdly, the
expansion into emerging markets should only partly offset the decline in sales in
established markets, and the product mix on coolers are less favourable in Expected return
emerging markets. Upside to price target -13.0%
Dividend yield estimate 0.8%
Investment positives Total return forecast -12.2%
Among the world’s largest manufacturers of commercial coolers (Ice Cold
Merchandisers) and solution providers with global presence except the Americas
Strong experience and competence in the ICM business, with a strong know-how Trading Data
and understanding of business, innovative merchandising “solutions” and solid Absolute 3m -13%
client base of blue-chip companies -¨ ¨- 12m 103%
Relative to ATG 3m 0.3%
Growth prospects from the expansion into new markets such as brewers, juice and -¨ ¨- 12m 66%
water companies 3m avg. daily trading vol. in € m 037
Low leverage and healthy debt levels that will allow for capital redeployment and Weight in ATG 0.3%
further development of operations through acquisitions
Investment negatives Price performance
Share performance
The increased presence of Frigoglass worldwide can lure competition, which can
3200
compete with cheaper products especially in South East Asia. However Frigoglass’
know-how and focus on ICMs, R&D, and strong relationships with Coca Cola 8 2800

Hellenic and other bottlers represent a barrier to entry for potential competition. 2400
6
2000
A large part of Frigoglass operations are based in emerging markets, where
political and economic unrest can affect Frigoglass operations 4 1600

Currency risk mainly from Nigerian operations 1200


01-09

03-09

05-09

07-09

09-09

11-09
High interdependence with Coca-Cola Hellenic
Frigoglass S.A. Greece ATHEX Composite

Reinvestment risk. Given the group’s strong cash flow generation, there is a
potential reinvestment risk relating to the use of cash. In the past, the management Source: Company, JCF, National P&K Securities Research estimates
proceeded either with capital return to shareholders or with acquisition during
periods of excess cash with the overall balance being positive.
Catalysts Company description
Frigoglass S.A.I.C. and its subsidiaries are engaged in the
Acquisition/joint venture in Asia, Middle East, North America manufacturing, trade and distribution of commercial efrigeration
units for beverage and dairy companies. The Group has
Further capacity additions in China manufacturing plants and sales offices in Europe, Asia, and
Africa. The Company is a limited liability company incorporated
New products targeting new clients and based in Kifissia, Attica. The Company’s’ shares are listed
on the Athens Stock Exchange.

Key financials 2007 2008 2009E 2010E 2011E


Turnover (€ m) 453 488 314 334 430
EBITDA (€ m) 91 86 50 59 86
Profit after-tax (€m) 45 19 7.1 15 32
EPS (€) 1.13 0.48 0.18 0.38 0.79
EPS chng (%) 17.7 -57.3 -63.7 116 109
P/E (x) 21.9 7.0 42.7 19.8 8.7
EV/EBITDA (x) 11.8 4.0 9.6 7.8 4.9
Victor Labate
FCF yield (%) 0.5 -4.7 -4.6 14.7 10.1 Oil & Gas / Industrials Analyst
DPS (€) 0.20 0.16 0.06 0.13 0.26 +30210 7720 076
labate@nationalpk.nbg.gr
Dividend Yield (%) 0.8 4.7 0.8 1.8 3.8
Source: Frigoglass, National P&K Securities Research estimates

Page 41 Please refer to important disclosure at the end of the document


GEK TERNA N/A
Price: € 5.87 Construction - Energy 12M target price: N/A
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 2.72 - 7.46
We view GEK-TERNA as a low-risk story due to a favorable operating Market cap in € m 504.1
environment for most of the company’s segments and its well-diversified business Reuters / Bloomberg HRMr.AT / GEKTERNA GA
mix. Free float (e) 76%

Investment positives
GEK-TERNA is the third largest construction-concession group in Greece with a Expected return /Valuation
backlog of c. €1.8bn. In our view, the current backlog size ensures good revenue Upside to price target N/A
visibility over the coming 2-3 years. Dividend yield estimate N/A
Total return forecast N/A
The Group has an established construction presence abroad (Balkans and the
Middle East) with a well-diversified client base across geographical regions.
Trading Data
Early mover advantage in thermal electricity production as Heron is the first private Absolute 3m -0.06%
operational thermoelectric plant. In addition, a second 435 MW CCGT plant will -¨ ¨- 12m 89%
commence operations during Q2 2010. Relative to ATG 3m 8%
-¨ ¨- 12m 38%
3m avg. daily trading vol. in € m 1.08
GEK-TERNA is poised to benefit from the attractive growth prospects in the Weight in ATG 0.8%
domestic wind-energy market as capacity factors are relatively high and incentives
granted by the Greek State are very favourable

Investment negatives Price performance


Share performance
Construction is a cyclical business with high dependence on GDP growth.
8 3200

2800
Overseas competition could lead to bidding discounts and margin erosion. 6
2400

2000
Real estate property operations could be subject to revaluations in the future in the 4
case of unfavourable market conditions. 1600

2 1200
01-09

03-09

05-09

07-09

09-09

11-09
In the past, there have been significant delays on wind parks’ installation.
GEK TERNA Holding, Real Estate, Construction S.A.
Catalysts Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates


Government plans to facilitate RES licensing procedures by establishing an one-
stop shop orientation licensing mechanism.

Following significant past delays, the long-awaited c. €1.8bn new tender of Attica Company description
Ring Road’s extension could be a meaningful contributor to the Group’s backlog. GEK TERNA is a holding company operating in energy,
concessions construction, real estate and industrials. GEK
The advent of a strategic investor will result in synergies on a number of issues. recently absorbed its construction subsidiary Terna while it
is active in the RES sector via a 47.4% in the listed
company Terna Energy.

Key financials 2007 2008 2009E 2010E 2011E


Turnover (€ m) 446 669 755 830 922
EBITDA (€ m) 90 83 89 108 142
Net profit (€ m) 38 22 36 36 41
EPS (€) 0.57 0.34 1.07 0.42 0.48
EPS chng (%) 83% -41% 23% 1% 13%
P/E (x) 18 9.8 5.5 14 12
EV/EBITDA (x) 10 4.6 9.1 10 8.5
RoIC (%) 1.8 0.4 0.9 0.8 0.8
DPS (€) 11% 5% 17% 6.1% 6.6% George Vitorakis
Analyst
Dividend Yield (%) 0.12 0.12 0.13 0.13 0.13 +30210 7720 151
EV per MW (€ m) 1.1% 3.6% 2.2% 2.2% 2.1% gvitorakis@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 42 Please refer to important disclosure at the end of the document


HELLENIC EXCHANGES Outperform
Price: € 7.80 Financials 12M target price: € 11.50
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 3.75/10.78
We retain our positive stance on Hellenic Exchanges as i) trading volumes are Market cap in € m 477.2
following an upward trend, ii) corporate activity is likely to pick up generating more Reuters / Bloomberg EXCr.AT/EXAE GA
revenues for the company, iii) dividend policy remains consistent and generous Free float (e) 79%
and iv) operating expenses are well contained.

Investment positives Expected return


Strong cash position Upside to price target 57%
Dividend yield estimate 2.8%
Management has been very successful in cost cutting effort, reducing headcount Total return forecast 59.8%
by 10% per year on average since 2003

High EBIT margin in the last years and a target payout ratio at 60%, with an
established policy to return excess cash to shareholders. Trading Data
Absolute 3m -0.1%
Investment negatives -¨ ¨- 12m 37%
Relative to ATG 3m 9%
Following the implementation of MiFid, alternative trading platforms were -¨ ¨- 12m 10%
established (ie Chi-X, Turquoise) that offer more attractive pricing. This is a threat 3m avg. daily trading vol. in € m 2.8
to all organised exchanges Weight in ATG 0.7%

Large concentration in large caps. Top 5 trade shares account for 56% of total
turnover in 2008. Given the establishment of the alternative platforms this can be a Price performance
serious threat
Share performance
Catalysts
3200
A potential new M&A wave in the sector globally. Given the fact that HelEx’s is the 10
2800
largest exchange in the SEE it could be a likely candidate in our view
8 2400

2000
6
1600
4
1200
12-08

02-09

04-09

06-09

08-09

10-09
Hellenic Exchanges Holding S.A.
Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates

Company description
Hellenic Exchanges supports the structure and operation of the
Hellenic Capital Market. The company was privatized in ’03,
following the disposal of the State’s stake (33.4%) to seven
Greek banks as well as retail & institutional shareholders
Key financials 2007 2008 2009E 2010E 2011E
Turnover (€ m) 161 108 78 86 96
EBITDA (€ m) 119 83 51 58 66
Profit after-tax (€ m) 91 65 39 44 50
EPS (Euro)) 1.29 0.92 0.57 0.68 0.77
EPS chng (%) 56.4% -28.7% -38.4% 18.9% 13.4%
P/E (x)* 18.2 6.0 17.9 15.0 13.3
P/E (excluding cash) 16.2 2.9 14.3 12.5 10.2
EV/EBITDA (x) 12.5 3.0 10.4 8.6 7.0
RoE (%) 53.0% 37.1% 24.2% 25.8% 25.3%
ROIC (%) 44.7% 35.8% 21.7% 21.6% 21.6%
Free Cash Flow yield (%) 5.4% 14.3% 5.0% 6.4% 7.3% Panagiotis Kladis, CFA
Analyst/Financials
Ord. Dividend Yield (%) 3.2% 8.2% 2.8% 3.3% 3.8%
+30210 7720 185
P/BV (x) 8.8 2.4 4.3 3.6 3.1 kladis@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 43 Please refer to important disclosure at the end of the document


HELLENIC PETROLEUM Neutral
Price: € 8.30 Oil & Gas 12M target price: € 8.2
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 4.88 - 8.80
We maintain our Neutral recommendation on Hellenic Petroleum (ELPE) and our Market cap in € m 2,448
target price stands at €8.2 per share. Our recommendation is based on a) the Reuters / Bloomberg HEPr.AT / OPAP GA
difficult refining environment ELPE operates in, namely record low benchmark Free float (e) 29%
Institutional ownership (e) 9.9%
refining margins, the weak USD vs. the Euro, and the supply/demand imbalance in
Europe especially for heavy and light distillates, b) the BP Hellas acquisition which
is expected to be completed in Q1’10, c) the challenging market conditions for the Expected return
Petrochemicals Unit, d) the lower contribution to earnings from DEPA due to lower Upside to price target 2.4%
natural gas demand in Greece, and of T-Power due to lower industrial power Dividend yield estimate 5.7%
consumption and lower System Marginal Prices (SMP) in the domestic market, e) Total return forecast 8.1%
the stock’s valuation multiples: ELPE trades an ’10 EV/EBITDA of 8.3x, which is at
a premium vs. its most direct peers (Erg: 6.1x, Saras: 5.3x, Tupras: 6.3x).

Investment positives Trading Data


Absolute 3m 8.4%
Hellenic Petroleum activities are diversified and include refining, marketing, -¨ ¨- 12m 48%
petrochemicals, power, E&P, and gas Relative to ATG 3m 30%
-¨ ¨- 12m 26%
Sustainable demand in the Eastern Mediterranean, especially diesel due to the 3m avg. daily trading vol. in € m 1.373
shortage in the region and rising global demand Weight in ATG 3.1%
Hellenic Petroleum has a rather strong balance sheet and self-financing ability,
with a target leverage ratio at 30%, and a high current ratio and interest coverage
Price performance
We favor the group’s experienced management
Share performance
High barriers to entry for foreign competitors due to strict environmental 3200
regulations, and the capital-intensive nature of the Greek market
8 2800
Investment negatives 2400

We expect a softening of benchmark refining margins 2000


6
HEP has rather low returns compared to local competitor Motor Oil, despite the 1600
fact that 60% of the company’s portfolio has returns higher than 10% 1200
Oil price volatility can drive negatively a refinery’s performance, by leading to
12-08

02-09

04-09

06-09

08-09

10-09
significant inventory losses Hellenic Petroleum S.A. Greece ATHEX Composite

Hellenic Petroleum’s Nelson Complexity Index stands below Motor Oil’s and below
or at par with the index of other European competitors Source: Hellenic Petroleum, JCF, National P&K Securities Research estimates

Catalysts
Hydrocracker and cocker investment to take effect by ’11 will improve the Company description
Hellenic Petroleum is the country’s largest refining and
company’s refining margins petroleum marketing company, with 70% of total domestic
refining capacity and a network of nearly 1,512 retail stations.
The company has also has a 54% stake in FYROM’s Okta
refinery and a 35% stake in Greece’s natural gas company
DEPA. The Greek state is the controlling shareholder with
35.5% of the outstanding shares.

Key financials 2007 2008 2009E 2010E 2011E


Turnover (€ m) 8,538 10,131 6,207 7,769 8,847
EBITDA (€ m) 617 31 385 462 611
Profit after-tax (€m) 365 24 181 215 306
EPS (€) 1.15 0.10 0.60 0.72 1.02
EPS chng (%) 35.0 -91.7 536 18.6 42.8
P/E (x) 9.8 56.8 14.0 11.8 7.8
EV/EBITDA (x) 7.2 72.6 9.8 10.1 8.1
FCF yield (%) 5.9 31.0 -22.8 -14.2 -11.6 Victor Labate
Oil & Gas / Industrials Analyst
DPS (€) 0.50 0.45 0.45 0.47 0.56 +30210 7720 076
Dividend Yield (%) 4.4 8.3 5.5 5.8 7.0 labate@nationalpk.nbg.gr
Source: Hellenic Petroleum, National P&K Securities Research estimates

Page 44 Please refer to important disclosure at the end of the document


HELLENIC POSTBANK Neutral
Price: € 4.24 Financials 12M target price: € 4.70
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 2.76/5.96
The quality of earnings remains very poor as more than 40% of the banks Market cap in € m 1,206.1
revenues came form trading activity in the first 9 months of 2009. However, the Reuters / Bloomberg GPSr.AT/TT GA
bank retains a very liquid balance sheet with limited NPLs and a comfortable Free float (e) 55%
Institutional ownership (e) 44%
capital base following the recent capital increase. A change in the bank’s strategy
towards increasing core revenues would make us more positive.
Expected return
Investment positives Upside to price target 11.8%
The most liquid balance sheet among Greek peers with a loan to deposit ratio of Dividend yield estimate 3.9%
60.83%; Strong franchise value Total return forecast 15.7%

Asset quality strong with NPL<1%, and over 100% cash coverage Trading Data
Absolute 3m -0.1%
Following the recent capital injection HP has a comfortable capital base -¨ ¨- 12m -10%
Relative to ATG 3m 0%
Investment negatives -¨ ¨- 12m -20%
3m avg. daily trading vol. in € m 3.2
Low earnings quality, very volatile income dependent on financial market Weight in ATG 1.4%
performance
Price performance
Politically appointed management; subject to changes upon political developments
Share performance

Corporate culture; employees not sales oriented 6 3200

Catalysts 2800

2400
Strong financial markets could help bank generate abnormally high revenues.
4 2000
A strategy to enhance core banking revenues and gradually reduce dependency
on financial markets. 1600

1200
Better/Worse than expected macro environment in Greece could affect asset
01-09

03-09

05-09

07-09

09-09

11-09
quality and cost of funding
TT Hellenic Postbank S.A. Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates

Company description
The Greek Postal Savings Bank started operating in Crete in
1900. In 2002 it become a Societe Anonyme, in 2004 a new
management team was appointed and in 2006 it gained a full
banking license. The Greek state owns a direct stake of 35.2%
(following the IPO and placement) while the Hellenic Post holds
a further 10%. GPSB has excess liquidity enabling it to provide
competitive prices on household loans due to low funding
costs.
Key financials 2007 2008 2009E 2010E 2011E
Net loans (Euro m) 6,024 7,004 7,934 8,575 9,426
Deposits (Euro m) 11,156 11,211 12,679 13,162 13,707
Total Assets (Euro m) 13,182 14,898 16,313 16,832 17,700
Pre-tax profit (Euro m) 50 3 171 119 158
Net profit (Euro m) 43 3 135 93 123
EPS (€) 0.31 0.02 0.47 0.33 0.43
EPS chng (%) -68.3% -93.5% 2261.2% -31.1% 32.4%
ROE (%) 5.4% 0.5% 15.0% 7.2% 9.2%
ROA (%) 0.34% 0.02% 0.86% 0.56% 0.71%
P/E after tax (x) 40.2 277.9 8.9 13.0 218.3
P/BV (x) 2.36 1.51 0.95 0.93 0.9 Panagiotis Kladis, CFA
Analyst/Financials
Dividend yield (%) 2.0% 0.0% 3.9% 2.7% 3.6%
+30210 7720 185
Cost/income 73% 77% 54% 61% 57% kladis@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 45 Please refer to important disclosure at the end of the document


IASO Outperform
Price: € 3.55 Health Care 12M target price: € 4.70
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 3.38 – 5.26
We reiterate our Outperform rating on Iaso as we believe that current valuation Market cap in € m 181
levels offer an attractive entry point with a 33% upside relative to our new price Reuters / Bloomberg IASr.AT / IASO GA
target (€4.70). At current levels, the stock trades at historical lows (2010 P/E 9.6x Free float (e) 79%
Institutional ownership (e) 21%
vs. historical average in the 2004-2008 period of 25.0x).

Investment positives Expected return


Dominant position in obstetrics & maternity sector (Iaso holds circa 39.4% of the Upside to price target 32.4%
private hospital market while its estimated market share of total births in Greece Dividend yield estimate 3.2%
accounted for 13.5% for FY 2007) Total return forecast 35.6%

Increased bed capacity with Iaso Pediatrics (65 beds) and Iaso Thessaly (169 Trading Data
beds) that raise Company’s bed capacity by 41% Absolute 3m -13%
-¨ ¨- 12m -20%
Valuation is attractive both on a multiples basis, as well as from a DCF Relative to ATG 3m 0%
perspective. Our €4.7/share is based on our DCF -¨ ¨- 12m -41%
3m avg. daily trading vol. in € m 0.1
Possitive FCFs with low Capex requirements in the coming years Weight in ATG 0.3%

Strong relationships with physicians who own 77% of the Company. Maintaining a
Price performance
high physician retention rate is key attracting new end customers and maintaining Share performance
market share.
3200

Investment negatives 2800


Absence of main shareholder may lead to management inefficiencies
2400

As doctors’ participation remains low in the Iaso General, the further development 2000
4
of diagnostic centres may be required for an increase in outpatients inflow
1600
Lack of growth in the birth count in Greece may lead to increased competition in
1200
the maternity sector in the following years (Gaia from Athens Medical Center as of
01-09

03-09

05-09

07-09

09-09

11-09
th
November 16 2009 - Rea hospital in Athens as of 2011)
IASO S.A. Greece ATHEX Composite

Euromedica, one of the main competitors, holds circa 10% of the Group’s share Source: Company, JCF, National P&K Securities Research estimates
capital. Additional stock sales from Euromedica could potentially limit near term-
upside for Iaso. Company description
IASO S.A. is a Greek company engaged in the provision of health
Catalysts and medical services. The Company currently operates one
obstetric, one general and one pediatric hospital units while it plans
to expand with the construction of two more medical units.
Development of diagnostic centers that will increase outpatients Inflow Iaso Maternity accommodates 333 beds. Iaso General
accommodates 237 beds. Iaso S.A. holds 97.07% of Iaso General.
Turnaround of Iaso General through increased participation of doctors’ in its share Iaso Pediatrics is a new hospital unit, which operates as a
capital department of Iaso Maternity and accommodates 65 beds in total.
Iaso Thessalias will operate as a fully equipped General and
Obstetrics hospital with Intensive Care unit. Iaso Thessalias will
accommodate 169 beds in total. The parent company will hold a
67.93% stake of Iaso Thessalias while doctors from the region will
hold the remaining 32.07%. The Group expects that Iaso Thessalias
will commence operations during Q1’10.
Key financials 2007 2008 2009E 2010E 2011E
Turnover (€ m) 170 184 180 201 212
EBITDA (€ m) 45 50 39 40 42
EBIT (€m) 37 42 30 29 30
EBT (€m) 34 36 28 27 28
EPS (€) 0.39 0.40 0.33 0.37 0.39
EPSchange % 53% 5% -19% 13% 5%
P/E (x) 27.0 11.0 10.9 9.6 9.1
EV/EBITDA (x) 14.5 6.9 8.2 8.0 7.5
EV/Bed 0.5 0.8 1.2 0.5 0.5 Iakovos Kourtesis
RoE (%) 15.8% 18.5% 14.0% 15.1% 14.8% Health Care Analyst
+30210 7720 251
DPS (€) 0.27 0.22 0.11 0.15 0.18
ikourtesis@nationalpk.nbg.gr
Dividend Yield (%) 2.6% 5.0% 3.2% 4.2% 4.9%
Source: Company, National P& K Securities Research estimates

Page 46 Please refer to important disclosure at the end of the document


INTRACOM Neutral
Price: € 1.19 Technology 12M target price: N/A
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 0.54-2.08
Weak operating margins across the business units imply sustained pricing Market cap in € m 158
pressures, while telecom unbundler Hellas On Line faces financial burdens and Reuters / Bloomberg INRr.AT / INTRK GA
stiff competition on the commercial and service side. Free float (e) 55%
Institutional ownership (e) 15%
Share performance is highly correlated to uncertainties relative to loss making
business units and challenging environment for margins
Expected return
Upside to price target n.a.
Dividend yield estimate n.a.
Investment positives Total return forecast n.a.

Telecom services strategy advantages (synergies, replacing telecom solutions


revenues) with fixed line and broadband focus via listed local loop unbundler Trading Data
Hellas On Line Absolute 3m -35%
-¨ ¨- 12m 73%
Strategic alliance with Russian Sistema (now owner of 51% in telecom services Relative to ATG 3m -26%
-¨ ¨- 12m 19%
and internet divisions) 3m avg. daily trading vol. in € m 0.48
Focus in SE region with growth above mainstream Europe (early cycle) via Weight in ATG 0.2%
existing network of operations and relations in place
Price performance
Share performance
Investment negatives 2.5 3200

Aggressive competition by low cost Chinese products in the SE European region 2.0
2800

albeit with limited local presence 2400


1.5
Unclear strategy in telecom services and mounting competition by established 2000
players (Vodafone, Wind, Forthnet) with extensive retail networks and after sale 1.0
1600
support infrastructure
0.5
1200
Somehow complicated management structure and decision-making
01-09

03-09

05-09

07-09

09-09

11-09
Intracom Holdings S.A. Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates


Catalysts
Strategic cooperation in defence may offer increased exposure and support
regional expansion in the field.
Company description
Intracom’s 51% owned by Russian Sistema telecom equipment
Margin and cash flow trends relative to HOL telecom subsidiary may support unit is the leader in the field in Greece and Romania with half of
similar evolution at group level. Potential sale of HOL stake, could help realize its business international mainly in SE Europe and the Middle
shareholders value. East. Key end markets include telecoms, defence,
governments, financials and industrials (metals & construction).
Relatively new listing, 63.13% owned, Hellas On Line exploits
opportunities in broadband services in Greece via local loop
unbundling.
Key financials 2007 2008 2009E 2010E 2011E
Turnover (€ m) 423.0 509.0 580.3 644.1 689.2
EBITDA (€ m) 15.8 -14.3 72.7 32.6 48.9
Profit after-tax (€m) -35.1 -77.2 3.3 -30.0 -14.0
reported EPS (€) -0.27 -0.58 0.02 -0.23 -0.11
adj.EPS chng (%) n.m. n.m. n.m. n.m. n.m.
rep.P/E (x) n.m. n.m. 48.0 n.m. n.m.
EV/EBITDA (x) 30.4 n.m. 3.7 8.4 5.3
Theodore Ritsos
FCF yield (%) 0.9 0.2 0.4 0.4 0.4 Research Director
DPS (€) 0.00 0.00 0.02 0.02 0.02 +30210 7720 176
t.ritsos@nationalpk.nbg.gr
Dividend Yield (%) 0.0% 0.0% 1.7% 1.7% 1.7%
Source: Company, National P&K Securities Research estimates

Page 47 Please refer to important disclosure at the end of the document


INTRALOT Neutral
Price: € 3.76 Gaming 12M target price: € 4.50
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 2.70 - 5.55
We remain neutral although the Company seems to have absorbed smoothly most Market cap in € m 597.7
of the negative impact coming from lower commission in the Turkish contract. The Reuters / Bloomberg INLr.AT / INLOT GA
operating environment remains challenging as shown by lower player spending y- Free float (e) 66%
Institutional ownership (e) 57%
o-y as well as the gambling taxation appetite especially in SEE Europe.
We would follow a buy on the dips approach as the company is ready to pursue
opportunities coming from liberalization trends in Europe and regulatory evolution
Expected return
in the Americas.
Upside to price target 20.7%
Dividend yield estimate 3.8%
Total return forecast 24.5%
Investment positives
Key player in the international gaming market
Trading Data
Strong performance in Italy Absolute 3m -0.24%
-¨ ¨- 12m 28%
Leverage remains relatively low Relative to ATG 3m -13%
-¨ ¨- 12m -6%
3m avg. daily trading vol. in € m 2.8
Trading at a discount compared to its close peers Weight in ATG 0.9%

Investment negatives
Legal and re-investment risk arising from the contractual nature of the business Price performance

Share performance
Betting contingent liability
6 3200

Intense competition 2800


5
2400
4

Catalysts 2000
3
1600
Structural reform of the gaming market
2 1200
New projects in Australia and online opportunities in Europe
01-09

03-09

05-09

07-09

09-09

Intralot S.A.
11-09
Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates

Company description
Intralot is a leading provider of integrated lottery systems,
operation and related services, globally. It ranks second in the
worldwide gaming lottery vendor/operator market, with its
competitive advantage to offer both the software and the
development and organization of lottery games.

Key financials 2007 2008 2009E 2010E 2011E


Turnover (€ m) 836 1077 917 1046 1106
EBITDA (€ m) 254 193 174 180 193
Adjusted Net profit (€ m) 112 91 78 83 91
EPS (€) 0.71 0.32 0.47 0.52 0.58
Adj. EPS chng (%) 6% -19% -14% 7% 10%
P/E (x) 19.0 9.5 8.0 7.2 6.5
EV/EBITDA (x) 8.7 3.5 5.0 4.8 4.4
FCF yield (%) -4.8% -16% -5.5% 12% 11%
George Vitorakis
RoE (%) 47% 19% 26% 25% 23%
Analyst
DPS (€) 0.33 0.22 0.14 0.19 0.21 +30210 7720 151
Dividend Yield (%) 2.4% 7.4% 3.8% 5.0% 5.5% gvitorakis@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 48 Please refer to important disclosure at the end of the document


JUMBO Outperform
Price: € 8.20 Retail 12M target price: € 11.24
(closing price 16/12/2009)

Recommendation Stock Data


52 week low / high 3.55-9.55
We are positive on Jumbo post the Q1 09-10 solid results that reaffirmed the Market cap in € m 994
company’s ability to weather the current unfavorable macroeconomic conditions Reuters / Bloomberg BABr.AT /BELA GA
and disruptions from exceptional events (such as elections). Jumbo reported Free float (e) 70%
Institutional ownership (e) 66%
another quarter of improved profitability and cash flow generation. The outlook for
consumer spending especially in Greece remains challenging for the rest of the
year and for 2010; however we believe that Jumbo can maintain its growth profile
and continue to successfully win market share (value for money concepts are Expected return
favoured as consumers become more price sensitive) and it expand its stores’ Upside to price target 37.2%
network. Dividend yield estimate 2.8%
Total return forecast 40.0%
The company remains attractively valued, trading at 10.3x 09-10 earnings, at a
29.5% discount vs. the DJ Euro Stoxx Retail Benchmark standing at 14.6 xs.
Trading Data
Investment positives Absolute 3m +2%
-¨ ¨- 12m +116%
Strong brand awareness -wide product range- affordable prices- resilient concept Relative to ATG 3m +18%
on economic downturn -¨ ¨- 12m +57%
3m avg. daily trading vol. in € m 1.7
Extensive retail network in Greece, with strategic location of its large sized stores Weight in ATG 1.52%
supported by high tech infrastructure (warehouses / logistics centre.)

Strong profit margins attributed to efficient product mix and low cost imports. Solid Price performance
free cash flow generation, strong return ratios. Share performance

3200
Efficient management with successful track record
2800
Investment negatives 8
2400
Dependency on importers - 80% of imports originate from China (currency,
6 2000
political, macroeconomic risks)
1600
Potential delays in the store rollout in Greece and the Balkans 4
1200
Dependency on consumer spending levels and trends; however product mix
01-09

03-09

05-09

07-09

09-09

11-09
skewed towards more staple products Jumbo S.A. Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates


Dependency on the company CEO

Catalysts Company description


Jumbo is the largest retailer and wholesaler of toys, infant
products, books & stationery and seasonal, home & mother
Successful expansion in Bulgaria and Romania opportunity products in Greece, enjoying a share of 36% in the
domestic market, the size of which is estimated at €1.3bn. The
Market consolidation company’s distribution network currently counts 45 retail stores,
41 in Greece, 2 in Cyprus, and 2 in Bulgaria with a net sales
surface of ca. 230,993m2.
Product mix enrichment

Key financials 2007 2008 2009E 2010E 2011E


Turnover (€ m) 342.7 404.0 467.8 509.1 559.1
EBITDA (€ m) 105.5 125.6 139.6 150.6 159.9
Net profit (€m) 67.9 82.5 95.7 103.1 111.0
Reported EPS (€) 0.56 0.68 0.79 0.79 0.85
Dil. EPS chng (%) 35.8% 21.7% 16.1% 5.6% 7.4%
Dil. P/E (x) 24.1 13.8 10.9 10.3 9.6
EV/EBITDA (x) 15.4 9.3 7.7 7.3 6.7
ROE (%) 34.8% 32.6% 29.9% 24.9% 21.6%
Ioanna Katsoula
Analyst
ROIC(%) 20.2% 21.6% 17.8% 16.4% 15.4% +30210 7720184
Dividend Yield (%) 1.2% 2.2% 2.8% 2.9% 3.2% katsoula@nationalpk.nbg.gr
*The FY ends in Jun 30.
Source: Company, National P&K Securities Research estimates

Page 49 Please refer to important disclosure at the end of the document


KORRES Outperform
Price: € 6.80 Consumer Goods 12M target price: € 8.65
(closing price 16/12/2009)

Recommendation Stock Data


52 week low / high 4.88-7.79
We remain positive on the company as we believe that after next year’s Market cap in € m 78.5
transitional period, in which we expect sales and earnings to remain flattish, the Reuters / Bloomberg KRRr.AT/KORRES GA
company will enter in a new phase of growth. With the commencement of the Free float (e) 30%
Institutional ownership (e) 13%
licence agreement with Johnson & Johnson in North and Latin America, the
company’s profitability will benefit from the new royalty fee proceeds –while there
is strong upside risk vs. the agreed minimum. Korres will be able to capitalise on Expected return
its enhanced brand awareness in other countries as well, while the additional cash Upside to price target 27.4%
flow could be channelled into advertising in other key markets. In the meantime, Dividend yield estimate 2.3%
we believe it is moving in the right direction through initiatives intended to improve Total return forecast 29.7%
its product mix, cost structure and WC management. The company trades at 18x
its’10 earnings fairly at par with its peer group and the DJ Euro Stoxx Personal &
Household Goods multiples of 18.7x and 19.2x respectively. Trading Data
Absolute 3m -8%
Investment positives -¨ ¨- 12m +32%
Relative to ATG 3m +6%
Product portfolio positioning: use of natural ingredients -high quality- full range in -¨ ¨- 12m -4%
all key categories 3m avg. daily trading vol. in € m 0.1
Weight in ATG Na
Unique branding and positioning -top quality- high aesthetics in branding and
packaging at affordable prices
Price performance
Share performance
Flexible distribution model- in pharmacies in Greece -through distributors abroad-
3200
present in key markets for natural cosmetics
2800
Focus on R&D and NPD
2400
Investment negatives 6
2000
Highly competitive sector dominated by multinationals
1600

Dependency on company‘s founder 1200


01-09

03-09

05-09

07-09

09-09

11-09
Low stock liquidity due to relatively small free float Korres S.A. Natural Products Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates

Catalysts
Geographic expansion-penetration, with main focus remaining on the large Company description
Korres Natural Products is a rapidly developing Greek company
established markets (US, Germany, Spain). with roots in the first Homeopathic Pharmacy of Athens.The
company today offers a complete skin and hair care range,
Product licensing agreement with Johnson & Johnson for the distribution of Korres make-up, sun care products and herbal preparations. Based on
products in North America during 2011-2019. a legacy of 3000 homeopathic remedies of herbal origin from
the Korres pharmacy, the company today offers more than 500
skin and hair care products and herbal preparations. Korres
New product line/brand launches - Recently launched new patent pending has a goal to become a major international brand and already
revolutionary anti-aging line. has a presence in 30 countries at 4,800 POS globally and in ca.
5,600 pharmacies in Greece along with 4 stand alone stores.

Key financials 2007 2008 2009E 2010E 2011E


Turnover (€ m) 36.0 53.7 53.8 56.7 53.0
EBITDA (€ m) 6.5 9.2 9.3 10.1 11.2
Net profit (€m) 3.2 3.90 3.8 4.3 5.2
Reported EPS (€) 0.29 0.34 0.33 0.37 0.45
EPS chng (%) 2% 16% -2% 12% 22%
Rep. P/E (x) 23.3 20.1 20.5 18.4 15.1
EV/EBITDA (x) 13.7 13.2 12.7 11.5 9.9
ROE (%) 25% 19% 17% 17% 18% Ioanna Katsoula
Analyst
ROIC(%) 14% 11% 10% 11% 14% +30210 7720184
Dividend Yield (%) 2% 2% 1.7% 1.9% 2% katsoula@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 50 Please refer to important disclosure at the end of the document


MARFIN POPULAR BANK Neutral
Price: € 2.38 Financials 12M target price: € 2.8
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 1.15/3.49
We retain our Neutral stance on MPB as its earnings power has been substantially Market cap in € m 1,975.7
affected by i) the deterioration in asset quality and ii) its margin squeeze which Reuters / Bloomberg MRBr.AT/MARFB GA
despite the recent improvement remains well below that of its peers. Although we Free float (e) 80%
Institutional ownership (e) 27%
were pleased with the recent sharp slowdown in NPL formation, we are concerned
with the Group’s provisioning policy, which we deem as aggressive.
Expected return
Investment positives Upside to price target 19.5%
The bank maintains a liquid balance sheet on the back of its deposit rich Cypriot Dividend yield estimate 3.84%
operations having a L/D ratio at 96% Total return forecast 23.34%

Does not participate in any government support plan; hence no need to abide to Trading Data
any further restriction Absolute 3m -0.06%
-¨ ¨- 12m 29%
Affiliation to MIG provides access to a number of corporate and individual Relative to ATG 3m 8%
customers -¨ ¨- 12m -6%
3m avg. daily trading vol. in € m 12.3
Investment negatives Weight in ATG 3%

Lack of long history and track record. The group’s current structure was formed in Price performance
2007 after the merger of three small banks in Greece as well as other smaller
acquisitions in Ukraine and Russia. Share performance

3200
Margins have been crushed on banks strategy to gain market share
2800

Cypriot economy is largely affected by the real estate market and tourism which 2400
both depend to a large extent on foreigners, mostly Russian and British. Both
2 2000
sectors are still facing challenges in the after math of the global recession.
1600
Catalysts
1200
Affiliation to MIG, could lead to involvement in corporate actions.
01-09

03-09

05-09

07-09

09-09

11-09
Marfin Popular Bank PCL Greece ATHEX Composite
Better/Worse than expected macro environment in Greece could affect asset
quality and cost of funding.
Source: Company, JCF, National P&K Securities Research estimates

Company description
Marfin Popular Bank Public Co Ltd is a commercial bank
offering financial services such as credit cards, commercial and
consumer loans and advances, investment and insurance
services and other related products.

Key financials 2007 2008 2009E 2010E 2011E


Net Loans (€ m) 17,617 23,427 24,538 25,448 26,871
Deposits (€ m) 20,697 24,828 24,804 25,928 27,467
Revenues (€ m) 1,242 1,178 1,078 1,070 1,166
Pre-tax profits (€ m) 596 459 224 189 262
Net Profits (€ m) 563 395 172 155 217
EPS (€) 0.72 0.49 0.21 0.19 0.26
EPS chng (%) 63.6% -32.6% -57.2% -10.2% 40.0%
ROE (%) 18.0% 11.6% 5.0% 4.4% 5.9%
ROE (%) adjusted for
goodwill 26.1% 18.3% 7.7% 6.6% 8.6%
ROA (%) 2.14% 1.15% 0.44% 0.38% 0.52%
P/E (x) 3.3 4.9 11.5 12.8 9.1
P/BV (x) 0.56 0.58 0.56 0.55 0.53
P/BV (x) adjusted for Panagiotis Kladis, CFA
goodwill 0.88 0.92 0.88 0.84 0.79 Analyst/Financials
+30210 7720 185
Dividend yield (%) 14.86% 6.19% 3.49% 3.13% 4.39% kladis@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 51 Please refer to important disclosure at the end of the document


METKA Outperform
Price: € 9.17 EPC 12M target price: € 14.4
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 5.28 - 11.24
Metka remains one of our top picks due to its record high backlog coupled with Market cap in € m 476.4
strong growth outlook. Therefore, a story combining very resilient characteristics Reuters / Bloomberg MTKr.AT / METTK GA
with remarkable growth prospects. Free float (e) 42.7%
Institutional ownership (e) 31%
Investment positives
Significant growth potential anticipated from FY’10 onwards on impressive backlog
accumulation. That said, we note that there are execution risks associated with the Expected return
new projects. Upside to price target 57.0%
Dividend yield estimate 4.7%
Work-in-hand has reached record-high of €2.2bn, or 3.5x ’10e sales, providing Total return forecast 61.8%
excellent visibility for the coming years.

Well-diversified project portfolio that breaks down to: a) Projects abroad: 58%, b)
PPC: 27%, c) Endesa Hellas/Mytil: 15%. Trading Data
Absolute 3m +6%
The project assignments in Pakistan, Romania, Syria and Turkey prove that Metka -¨ ¨- 12m +62%
can successfully participate in international tenders winning new contracts. Relative to ATG 3m +21%
-¨ ¨- 12m +18%
Net cash position reaching €31m in the 9-month period. 3m avg. daily trading vol. in € m 0.6
Weight in ATG 0.7%
High operating margins and economic returns, very low capex needs and decent
dividend yield.

Attractive valuation at current levels. Our projections imply an EPS CAGR ’09-’11 Price performance
Share performance
of 32%.
3200
Investment negatives
10 2800
Execution risks associated with the implementation of new projects.
2400
8
Anticipated margin erosion going forward due to increasing competition and 2000
expansion into new markets.
1600
6
Significant delays, linked to external factors though, in the commencement of 1200
some projects.
01-09

03-09

05-09

07-09

09-09

11-09
Catalysts METKA S.A. Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates


Construction commencement of new projects included in backlog & speed up of
backlog execution.

Evolution of operating margins going forward. Company description


Metka, a 57.3% subsidiary of Mytilineos Holdings, is the leading
Potential assignments of new projects, mainly outside of Greece. EPC contractor in Greece, active in the execution of large-scale
construction, industrial, energy and defense projects. The
Structure of management fee, paid to Mytilineos, post 2010. company is also involved in the manufacturing of heavy steel
constructions and intergraded electromechanical equipment.
Metka, listed in the Athens stock exchange since 1973, is
included in the following indices: Athex Composite Share Price
Index, FTSE/Athex Mid 40, MSCI Small Cap and HSBC Small
Cap Index.
Key financials 2007 2008 2009E 2010E 2011E
Turnover (€ m) 284.2 381.5 355.7 622.4 699.4
EBITDA (€ m) 57.2 66.8 61.4 95.2 106.3
Net Income (€ m) 36.8 41.4 37.6 58.7 65.6
reported EPS (€) 0.71 0.80 0.72 1.13 1.26
adj. EPS chng (%) -9.4% 12.6% -9.3% 56.1% 11.8%
rep. P/E (x) 21.8 8.3 12.7 8.1 7.3
EV/EBITDA (x) 14.0 5.3 7.5 5.3 4.7
Kostas Ntounas
FCF yield (%) 4.0% 6.6% 11.1% -3.2% 12.3% Deputy Research Director
DPS (€) 0.50 0.40 0.43 0.68 0.76 Industrials/Energy/Construction Analyst
+30210 7720 174
Dividend Yield (%) 3.2% 6.0% 4.7% 7.4% 8.3% ntounas@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 52 Please refer to important disclosure at the end of the document


MOTOR OIL Outperform
Price: € 10.68 Oil & Gas 12M target price: € 13.4
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 6.78 - 12.80
We maintain our Outperform recommendation on Motor Oil (MOH) and our target Market cap in € m 1,141
stands at €13.4 per share. MOH has maintained solid refining margins thanks to its Reuters / Bloomberg MOHr.AT / MOH GA
high level of complexity (NCI: 11.95), and its diversified customer base and export Free float (e) 38.5%
Institutional ownership (e) 31%
driven sales. MOH is geared to gain from the upturn in middle distillate spreads
driven by the global economic recovery. MOH remains undervalued vs. its
European peers at a ’09 P/E of 10.4x and an ’09 EV/EBITDA of 8.9x, noting that Expected return
traditionally the refiner has been trading at a premium to its peers. Based on our Upside to price target 30.1%
estimates, it offers an attractive dividend yield of 8.2% for 2009. Dividend yield estimate 8.2%
Total return forecast 38.3%
Investment positives
MOH generates high ROE and ROIC Trading Data
MOH has an attractive dividend yield Absolute 3m 7.3%
-¨ ¨- 12m 35%
MOH has a high level of complexity (NCI: 11.95), which allows it to alter its refinery Relative to ATG 3m 29%
configuration and to produce a high share of middle distillates (jet fuel, diesel) -¨ ¨- 12m 14%
There are high barriers to entry in the Greek market due to strict environmental 3m avg. daily trading vol. in € m 2,548
regulations and licensing, and the capital-intensive nature of the market Weight in ATG 1.4%

Because of its high complexity and because of the availability of different suppliers
available in the area, MOH can continuously optimise its feedstock Price performance
MOH’s sales are in all three main markets works as a “safety net”, and they have Share performance
the ability to optimise their profit margins according the supply and demand in 3200
each market 12 2800
Even though MOH complies with the regulation for domestic sales, a large share 2400
10
of its sales is abroad and as a consequence its average inventory is significantly 2000
less than any other land-locked European refinery. Thus, Motor Oil is less exposed
8 1600
to the volatility of oil prices
1200
Investment negatives
01-09

03-09

05-09

07-09

09-09

11-09
Motor Oil Hellas Corinth Refineries S.A.
Soft benchmark refining margins Greece ATHEX Composite

Fluctuation in the USD and current weak USD vs. the Euro
Source: Company, JCF, National P&K Securities Research estimates

Catalysts
The CDU investment will allow Motor Oil to expand its production by ’10, to boost Company description
volumes and improve margins Motor Oil is the second refining and petroleum marketing
company in Greece, with c. 25% of total domestic refining
capacity and a network of nearly 575 retail stations. The group
is involved in crude oil refining as well as the wholesale and
retail marketing and distribution of refined petroleum products
through its subsidiary Avin Oil. The refinery located in Ag.
Theodoroi, 70km outside Athens, is equipped with a crude oil
distillation unit, a catalytic reforming unit, a hydro-processing
unit, catalytic and thermal cracking units, and a hydrocracking
unit. The group’s production includes lubricants, liquid gases,
gasolines, jet fuels, special products, diesels, and fuels oils. It
group has the only lubricant production complex in Greece.
Key financials 2007 2008 2009E 2010E 2011E
Turnover (€ m) 4,070 5,505 3,569 4,998 5,837
EBITDA (€ m) 296 191 202 248 314
Profit after-tax (€m) 150 78 110 126 174
EPS (€) 1.35 0.71 0.99 1.14 1.57
EPS chng (%) 17.2 -47.7 40.6 14.8 37.7
P/E (x) 11.7 10.8 10.7 9.4 6.6
EV/EBITDA (x) 8.3 7.9 8.9 8.4 6.7
Victor Labate
FCF yield (%) 6.7 22.9 8.6 -23.9 8.3
Oil & Gas / Industrials Analyst
DPS (€) 1.20 0.60 0.84 1.24 1.35 +30210 7720 076
Dividend Yield (%) 7.6 7.9 7.9 12.1 13.1 labate@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 53 Please refer to important disclosure at the end of the document


MYTILINEOS Neutral
Price: € 5.10 Metals - Energy 12M target price: € 6.2
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 3.20 - 6.93
We maintain our Neutral rating having revised our target price upwards to Market cap in € m 597
€6.2/share to reflect a higher valuation for: a) subsidiary Metka, and b) the group’s Reuters / Bloomberg MYTr.AT / MYTIL GA
energy assets, as the date whereby the CHP plant enters full commercial Free float (e) 61%
Institutional ownership (e) 28.5%
operation is approaching whilst the construction of the group’s second power unit
progresses at full speed.
Although we see some upside potential based on our target price, we maintain a
rather conservative stance in terms of our rating when taking into account Expected return
Upside to price target 21.6%
sustained uncertainties associated with the group’s metals and energy operations.
Dividend yield estimate 2.5%
Total return forecast 24.1%
Investment positives
Diversified business portfolio that combines exposure to mining/metallurgy Trading Data
operations (through Aluminium of Greece) with energy (through Metka and Endesa Absolute 3m -14%
Hellas). -¨ ¨- 12m +47%
Relative to ATG 3m -1%
Well-positioned to become the largest IPP in terms of thermal plants’ installed -¨ ¨- 12m +7%
capacity and electricity production in the medium to longer term. 3m avg. daily trading vol. in € m 1.5
Weight in ATG 0.9%
Significant growth opportunities of subsidiary Metka.

Investment negatives
Price performance
Low visibility for the group’s metals and mining operations (mainly aluminium Share performance
smelting operation and zinc/lead smelter in Romania). 3200

2800
Increased uncertainty regarding Endesa Hellas’ shareholding structure and the 6
implementation of its strategy in the energy sector. 2400

2000
Unfavourable operating conditions in the domestic energy wholesale market.
4
1600
Catalysts
1200
Endesa Hellas’ shareholding structure and potential corporate actions in the
01-09

03-09

05-09

07-09

09-09

11-09
energy sector. Mytilineos Holdings S.A. Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates


Potential new projects for subsidiary Metka.

Arbitration/negotiation outcome on AoG’s electricity tariff regime.


Company description
Commencement of CHP plant’s full commercial operation.
Mytilineos Holdings is a leading industrial group of companies
Treatment of treasury stock (currently at 8.9% of the share capital). active in the Metallurgy & Mining, Energy, EPC and Defense
sectors. Mytilineos, through Aluminium of Greece and Sometra,
is the largest base metals producer in South Eastern Europe.
Metka, the leading EPC contractor in Greece, is active in the
execution of large-scale energy projects. The group is also
exposed to the energy sector, in terms of electricity production,
through its 49.99% subsidiary Endesa Hellas (JV with Endesa).
Finally, Elvo is the leading vehicle manufacturer in Greece
engaged in civil and defense projects. Mytilineos stock is
included in the following indices: Athex General Index,
FTSE/ASE 20, MSCI Small Cap and HSBC Small Cap.
Key financials 2007 2008 2009E 2010E 2011E
Turnover (€ m) 912.6 975.8 667.9 1,055.9 1,193.2
EBITDA (€ m) 153.7 117.6 123.6 173.1 191.1
Net Income (€ m) 193.6 18.5 24.7 56.9 72.0
reported EPS (€) 1.71 0.17 0.23 0.53 0.68
adj. EPS chng (%) -66% -60% 55% 133% 24%
rep. P/E (x) 8.4 23.5 22.0 9.6 7.3
EV/EBITDA (x) 13.0 7.5 8.5 6.7 5.0
Kostas Ntounas
P/BV (x) 2.3 0.5 0.7 0.7 0.6 Deputy Research Director
0.51 0.10 0.13 0.29 0.37 Industrials/Energy/Construction Analyst
DPS (€)
+30210 7720 174
Dividend Yield (%) 3.6% 2.5% 2.5% 5.8% 7.6% ntounas@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 54 Please refer to important disclosure at the end of the document


OPAP Outperform
Price: € 15.64 Gaming 12M target price: € 20.00
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 15.40/24.89
We have an Outperform recommendation due to low valuation and sector Market cap in € m 4,989.2
resilience. Although deregulation is probably a not so distant scenario, we note Reuters / Bloomberg OPAr.AT / OPAP GA
that OPAP already faces intense competition in the face of Internet operators. Free float (e) 66%
Institutional ownership (e) 55%
The company is clearly undervalued, trading at a small discount compared to its
peer group with a double-digit dividend yield, secure cash flows and a net cash
position of approximately €600m
Expected return
Upside to price target 27.9%
Dividend yield estimate 12.0%
Investment positives Total return forecast 39.9%

Resilient sector

High net cash position Trading Data


Absolute 3m -0.16%
-¨ ¨- 12m -26%
Trading at a discount compared to its peers Relative to ATG 3m 4%
-¨ ¨- 12m -46%
High dividend yield 3m avg. daily trading vol. in € m 14.6
Weight in ATG 8%

Investment negatives
Risk of losing market share from illegal betting competition as well as Internet
gambling. Price performance
Share performance
The liberalization of the gaming/betting market. 3200
24
2800
Dependence on the Greek State to approve new games. 22
2400
20
Taxation measures could have an adverse effect on player spending 2000
18
1600
Catalysts 16
1200
01-09

04-09

07-09

10-09
Governmental approval for new games
OPAP S.A.
Greece ATHEX Composite
Gambling market liberalization
Source: Company, JCF, National P&K Securities Research estimates

If carefully planned international expansion could generate synergies in lottery and


betting operation.
Company description
OPAP is a state-controlled company (34.4%), established in
1958 that holds the sole concession (expiring in 2020) to
operate and manage nine existing numerical lottery (Joker,
Lotto, Proto, Super 3, Extra 5, Kino) and sports betting games
(Stihima, Propo, Propo-goal), as well as two new numerical
lottery games (Bingo, Super 4) in Greece. Internationally,
OPAP operates in Cyprus numerical games directly and fixed
odds betting via OPAP Glory Ltd (90%owned) and Glory
Technology (20% owned).
Key financials 2007 2008 2009E 2010E 2011E
Turnover (€ m) 5,066 5,520 5,464 5,415 5,062
EBITDA (€ m) 810 1057 940 904 784
Adj. net profit (€ m) 572 729 614 662 579
EPS (€) 1.79 2.28 1.93 2.07 1.82
Adj. EPS chng (%) 20.2% 18.8% -5.7% -3.7% -12.5%
P/E (x) 15.3 9.1 8.1 7.5 8.6
EV/EBITDA (x) 10.2 5.6 4.7 4.8 5.7
FCF yield (%) 7.1% 12.7% 11.1% 13.0% 11.0%
DPS (€) 1.74 2.20 1.87 2.01 1.76 George Vitorakis
Analyst
Dividend Yield (%) 6.3% 10.6% 12.0% 12.9% 11.2%
+30210 7720 151
Interim Dividend 0.60 0.80 0.65 0.70 0.61 gvitorakis@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 55 Please refer to important disclosure at the end of the document


OTE Neutral
Price: € 10.5 Telecommunications 12M target price: € 12.0
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 9.4-13.5
Our rating reflects a challenging pricing environment as a result of sustained price Market cap in € m 5,137
competition in Greek mobile, mobile termination rate cuts and a slight negative Reuters / Bloomberg OTEr.AT / HTO GA
impact of new usage tax. Moreover, Greek fixed line revenues are suffering from Free float (e) 50%
Institutional ownership (e) 42%
sustained price cuts in broadband, while employee costs remain stubbornly
inelastic due to various employee constraints still in place (i.e. union collective
agreements etc). On the positive side stand new commercial initiatives in domestic Expected return
fixed line which are likely to decelerate line loss, possible employee redundancies Upside to price target 10.9%
and supportive cash flow and relative valuation. Dividend yield estimate 7.2%
Total return forecast 18.1%

Investment positives
Trading Data
Cost cutting efforts in Greek fixed line in 2010 likely to offset customer Absolute 3m -9%
disconnections and top line pressure. -¨ ¨- 12m -18%
Relative to ATG 3m 4%
Synergies from procurement of terminals and CAPEX through Deutsche Telekom. -¨ ¨- 12m -40%
3m avg. daily trading vol. in € m 13.36
Potential for value addition/ revenue streams by exploring owned real estate Weight in ATG (%) 8.06
development (over €1.5bn in value).

Price performance
Share performance
Investment negatives 16.0 3200
15.0
Possible management transition remains an untested decision making structure. 2800
14.0
Unsustainable but aggressive price wars in unbundled Greek fixed line and mobile 13.0 2400
12.0
--chasing market share-- weaken revenue streams. 2000
11.0
10.0
1600
9.0

Catalysts 8.0 1200


01-09

03-09

05-09

07-09

09-09

11-09
Reflection of DT synergies on financials and M&A activity among smaller players Hellenic Telecommunications Organization S.A.
may result in industry rationalization. Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates

Annual guidance early in 2010 may provide further clarity and visibility about size
and timing of employee redundancies as well as the impact of competition in fixed
and mobile units. Company description
OTE is the incumbent integrated telecom services provider in
Greece, owns Cosmote, the leading mobile operator in Greece
in total customers and retains 54% stake in Romanian
incumbent Rom Telecom.

Key financials 2007 2008 2009E 2010E 2011E


Turnover (€ m) 6,320 6,407 6,023 5,963 5,972
EBITDA (€ m) 2,219 2,271 2,190 2,126 2,150
Profit after-tax (€m) 662.6 601.8 574.0 570.0 589.5
reported EPS (€) 1.35 1.23 1.17 1.16 1.20
adj.EPS chng (%) 15.3% -9.2% -4.6% -0.7% 3.4%
rep.P/E (x) 7.5 8.3 8.9 9.0 8.7
EV/EBITDA (x) 7.3 4.4 4.2 4.4 4.3
P/CF (x) n.m n.m 8.5 8.4 8.2 Theodore Ritsos
Research Director
DPS (€) 0.75 0.75 0.75 0.80 0.90 +30210 7720 176
Dividend Yield (%) 2.2% 6.3% 7.2% 7.2% 7.6% t.ritsos@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 56 Please refer to important disclosure at the end of the document


PIRAEUS BANK Neutral
Price: € 8.25 Financials 12M target price: € 11.5
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 3.13/13.45
Despite the group’s positive trends on core revenues (NII and Commission Market cap in € m 2,774.2
Income), we remain concerned about asset quality trends. The latest trends were Reuters / Bloomberg BOPr.AT/TPEIR GA
not very encouraging as we did not witness the improvement that we expected. Free float (e) 100%
Institutional ownership (e) 43.3%
We would expect to see a clear slowdown in NPL formation before we turn more
positive for the stock.
Expected return
Investment positives Upside to price target 39.6%
Strategically positioned to service businesses, mostly SME’s, which remain Dividend yield estimate 1.7%
relatively underlevered vs European peers Total return forecast 41.3%

Branch network for the most part has not yet matured, leaving room for increase in Trading Data
franchise value Absolute 3m -0.3%
-¨ ¨- 12m 53%
Established a good presence in many SEE economies; in most of them banking Relative to ATG 3m -17%
penetration remains low -¨ ¨- 12m 12%
3m avg. daily trading vol. in € m 11.3
Weight in ATG 4.6%
Strong capital base (Core Tier I at 8.2%) and relatively low leverage (TE/TA: 5.5)
Price performance
Investment negatives Share performance

14 3200
Liquidity constraints as L/D ratio stands at 124%, and limited potential for
additional balance sheet securitization 12
2800
10
2400
Lower than peers’ provisioning policy on the back of different policy regarding 8
collaterals and lower pre-provision income 6
2000

4 1600
Catalysts 2 1200
Better than expected economic performance in SEE could lead to significant
01-09

03-09

05-09

07-09

09-09

11-09
upside.
Piraeus Bank S.A. Greece ATHEX Composite

Better/Worse than expected macro environment in Greece could affect asset Source: Company, JCF, National P&K Securities Research estimates

quality and cost of funding


Company description
Founded in 1916 Piraeus Bank went through a period of state-
ownership and management (1975-1991), before it was
privatized in December 1991. Today the bank is ranked 4th in
terms of market capitalization having demonstrated a period of
very rapid growth through M&As and organic growth.
International presence consists of subsidiaries in 9 countries
outside Greece with 460 branches and €10bn assets.

Key financials 2007 2008 2009E 2010E 2011E


Net Loans (€ m) 30,289 38,313 38,127 39,259 41,931
Deposits + Retail Bonds
(€ m) 23,914 31,925 31,677 32,857 34,738
Revenues (€m) 1,633 1,652 1,657 1,664 1,872
Pre-tax profit (€m) 785 386 316 307 509
Net profit (€m) 622 316 221 242 402
EPS (€) 2.14 0.95 0.66 0.68 1.20
EPS chng (%) 31.4% -55.7% -30.1% 2.5% 76.2%
Adj EPS chng (%) 36.1% -44.8% -19.3% -11.2% 76.2%
ROE (%) 25.4% 10.2% 7.2% 7.1% 11.0%
ROA (%) 1.61% 0.62% 0.41% 0.45% 0.72%
P/E (x) 4.8 8.7 10.8 12.1 6.9
Panagiotis Kladis, CFA
P/BV (x) 0.83 0.96 0.83 0.79 0.72 Analyst/Financials
Dividend yield (%) 8.7% 0.0% 1.7% 1.9% 3.6% +30210 7720 185
kladis@nationalpk.nbg.gr
Cost/income (%) 45.9% 54.6% 54.5% 56.6% 52.8%
Source: Company, National P&K Securities Research estimates

Page 57 Please refer to important disclosure at the end of the document


PIRAEUS PORT Outperform
Price: € 15.52 Transportation 12M target price: € 24.5
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 8.34-18.6
Our positive view on the shares stems from (a) secure revenue (and valuation) Market cap in € m 388
streams following the concession with Cosco, (b) improvement in operating Reuters / Bloomberg OLPr.AT / PPA GA
efficiencies, (c) aggressive capacity expansion and (d) exploitation of real estate Free float (e) 26%
Institutional ownership (e) 8%
property. Our valuation incorporates a 20% execution risk discount on sum-of-the-
parts of Cosco concession project plus value for PPA’s reaming operations and
real estate appreciation. Expected return
Upside to price target 10.2%
Dividend yield estimate 0.6%
Investment positives Total return forecast 10.8%
High barriers to entry make it rather difficult for significant competition to emerge,
particularly in the bulk/cargo segment. Trading Data
Absolute 3m 10%
New management team gradually working in restoring employee confidence and -¨ ¨- 12m 76%
support in investment plan implementation. Relative to ATG 3m 26%
-¨ ¨- 12m 28%
The recent 35-year agreement with Cosco secures minimum concession revenues 3m avg. daily trading vol. in € m 0.20
Weight in ATG (%) 0.59
of €665m in present value (€26.6 per share) for Piraeus Port.

Low leverage: At debt to equity below 0.4x and EBITDA to interest cover over 10x Price performance
financial risk remains well under control. Significantly lower operating margins Share performance
relative to EU peers (c. 25% vs. over 30%) underpin restructuring opportunities: 18.0 3200
relatively low personnel productivity and inefficient operations, targeted by a recent 17.0
company-wide restructuring program, to be further enhanced by new terminal 16.0 2800
15.0
operations. 14.0 2400
13.0
12.0 2000
Investment negatives 11.0
10.0 1600
9.0
Significant influence imposed by the dominant shareholder, the Greek state, 8.0 1200
sustains certain limitations in employment status and lower operational flexibility to
12-08

02-09

04-09

06-09

08-09

10-09
PPA’s own operations (i.e. other than Cosco).
Piraeus Port Authority S.A. Greece ATHEX Composite

Sustained strike activity by dockworkers during overtime and weekends Source: Company, JCF, National P&K Securities Research estimates

employment for a great part of 2009 has significantly hammered recent financials
and may delay customer uptake for Piraeus Port remaining container operations.
Hard to predict timing and value of real estate property development.
Company description
Piraeus Port Authority (PPA) is Greece’s largest port operator
authority with a business portfolio in transport services,
Catalysts transport infrastructure and property development – all under
long-term concessions. It is among the world’s 50 largest ports
Long lasting agreement with employee unions about the new employment terms and the largest port in East Mediterranean in container
throughput, as well as Europe’s largest and third largest port in
will help realize efficiency gains and operating margin expansion for the operations
the world in passenger traffic (20 m passengers per year). PPA
run by Piraeus Port. has outsourced one (out of targeted three) container terminal,
with Cosco Pacific-- to assume full operations late H1 ’10.
Key financials 2007 2008 2009E 2010E 2011E
Turnover (€ m) 171.4 116.0 140.4 133.7 148.1
EBITDA (€ m) 43.1 18.4 26.2 42.6 51.1
Profit after-tax (€m) 24.6 5.6 7.6 18.2 23.7
reported EPS (€) 0.98 0.22 0.30 0.73 0.95
adj.EPS chng (%) 101.3% -77.2% 35.9% 139.2% 30.2%
rep.P/E (x) 30.6 43.4 51.0 21.3 16.4
EV/EBITDA (x) 16.7 13.5 15.7 9.9 8.0
Theodore Ritsos
P/BV 4.2 1.4 2.1 2.0 1.8
Research Director
DPS (€) 0.33 0.07 0.10 0.12 0.15 +30210 7720 176
Dividend Yield (%) 0.5% 3.4% 0.5% 0.6% 0.8% t.ritsos@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 58 Please refer to important disclosure at the end of the document


PPC Outperform
Price: € 13.24 Energy 12M target price: € 19.2
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 10.78 - 17.40
We reiterate our Outperform rating on PPC mainly on valuation grounds. We Market cap in € m 3,072
highlight the: a) very attractive valuation (e.g. P/BV ’09, ’10 of c. 0.5x although Reuters / Bloomberg DEHr.AT / PPC GA
ROE isn’t lower than the cost of equity), b) very high dividend yield, close to or Free float (e) 45.1%
Institutional ownership (e) n.a.
higher than 10%, c) positive catalysts that may arise from upcoming
announcements/business plan of the new management.

Investment positives Expected return


Very attractive valuation vs. European peers. Keeps trading at a remarkable, and Upside to price target 45.0%
unjustified in our view, discount to its peers. Dividend yield estimate 10.4%
Total return forecast 55.4%
Solid operating performance in FY’09, positive momentum to be maintained next
year on the back of the already implemented oil hedging.
Trading Data
Exclusive access to Greece’s lignite reserves. Absolute 3m -16%
-¨ ¨- 12m +5%
Cost-cutting initiatives targeting cost reductions that are expected to reach €500m Relative to ATG 3m -3%
p.a. by 2014. -¨ ¨- 12m -24%
3m avg. daily trading vol. in € m 11.6
Investment negatives Weight in ATG 4.7%

Hiring of new employees in the next two years.

Government interference affects the company’s financial performance. Price performance


Share performance
Catalysts
3200
Final decisions, at European level, on CO2 emission allowances for the period 16 2800
post 2012. A strict implementation of the “full auctioning” directive will put PPC’s
profitability under significant pressure from 2013 onwards. Having said that, the 2400
14
company should be able to pass on the increased CO2 cost from 2013 onwards.
2000
Therefore, PPC may activate a pass through mechanism that would link its carbon
emission costs with the company’s electricity tariffs. 12 1600

1200
Speed up in RES capacity additions as green energy ranks very high in the
01-09

03-09

05-09

07-09

09-09

11-09
agenda of the new government and of the recently appointed management.
Public Power Corp. S.A. Greece ATHEX Composite

Pace of implementation of the announced investments, especially the ones related Source: Company, JCF, National P&K Securities Research estimates
to the decommissioning of existing old/carbon-intensive generation assets.

Corporate restructuring (e.g. break-up of the company’s key operations through


the establishment of fully owned subsidiaries that will be separate legal entities).
Company description
Potential changes in the market’s regulatory framework.
Established in 1950, the Public Power Corporation (PPC) is the
state-owned electric utility of Greece. In 2008, a total electricity
production of 63.2TWh was generated, broken down to 47.2%
from lignite, 17.1% from natural gas, 13.5% from oil, 5.0% from
hydro, 17.2% from energy purchases (imports and domestic
purchases from third parties). PPC has installed capacity of
12,766 MW.
Key financials 2007 2008 2009E 2010E 2011E
Turnover (€ m) 5,154 5,823 5,770 5,874 6,182
EBITDA (€ m) 819 344 1,757 1,493 1,679
Net Income (€ m) 222 -306 795 565 633
reported EPS (€) 0.96 -1.32 3.43 2.44 2.73
adj. EPS chng (%) 811% -273.5% 359.9% -28.9% 11.9%
rep. P/E (x) 37.5 -8.8 3.9 5.4 4.9
EV/EBITDA (x) 14.8 21.1 3.9 5.3 5.3 Kostas Ntounas
1.6 0.5 0.5 0.5 0.4 Deputy Research Director
P/BV (x) Industrials/Energy/Construction Analyst
DPS (€) 0.10 0.00 1.37 0.97 1.09 +30210 7720 174
Dividend Yield (%) 0.3% 0.0% 10.4% 7.4% 8.2% ntounas@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 59 Please refer to important disclosure at the end of the document


S&B N.A
Price: € 4.52 Industrial Minerals 12M target price: n.a.
(closing price 16/12/09)

Stock Data
Investment positives 52 week low / high 4.18 - 7.69
Market cap in € m 137
Geographical diversification of the group’s operations globally, diversified product Reuters / Bloomberg BARr.AT / ARBA GA
portfolio, niche markets in which S&B operates, long-term relationship with its Free float (e) 23.5%
customers. The company has managed to maintain its market share and pricing Institutional ownership (e) 30.7%
power across all segments.

Minor exposure to the Greek market, where demand in key sectors is expected to
Expected return
remain weak in 2010. Well-positioned to benefit from a potential recovery in key
Upside to price target n.a
industrial sectors in Europe and in the US. Dividend yield estimate n.a
Total return forecast n.a
Divestment of commercial (non-core) activities Motodynamic and Ergotrak and
focus on the industrial minerals core business, an activity with significantly higher
margins.

Effective cost-cutting initiatives highlighted by continuing reduction in net operating Trading Data
expenses of €7.2m (down 15%) in 9M’09. Absolute 3m -7%
-¨ ¨- 12m -40%
Relative to ATG 3m +7%
Significant net debt reduction on the back of the successful €40.8m rights issue -¨ ¨- 12m -56%
and organic reduction. 3m avg. daily trading vol. in € m 0.05
Weight in ATG 0.3%
Normalization of bauxite production process and significant margin improvement
evidenced in ’09 following the favourable court ruling on bauxite mining in Central
Greece.
Price performance
Investment negatives Share performance

3200
Low economic returns that barely cover the cost of capital.
2800
Low organic growth with, however, the potential to grow through acquisitions in the
2400
key niche markets it operates. 6
2000
Low liquidity of the shares, limited free float.
1600

Catalysts 4 1200
01-09

03-09

05-09

07-09

09-09

11-09
Potential upturn in global economy and increasing demand in key industrial
sectors, such as: steel industry, foundries, construction sector and automotive S&B Industrial Minerals S.A. Greece ATHEX Composite

industry, will boost S&B’s sales and profits. Source: Company, JCF, National P&K Securities Research estimates

Oil prices, ocean freight rates and USD/EUR rate going forward.

Company description
S&B is engaged in the production of the specialty industrial
minerals of bentonite, perlite, bauxite and fluxes. It is an
internationally oriented company with nearly 93% of its
products either exported or produced abroad and more than
50% of its assets located outside Greece.S&B stock is included
in the following indices: Athex Composite Share Price Index,
FTSE/Athex Mid 40, FTSE/Athex International, FTSE/Athex
Basic Resources, Eurobank Mid Cap Private Sector 50 Index.

Key financials 2005 2006 2007 2008


Turnover (€ m) 419.8 455.6 535.4 468.4

EBITDA (€ m) 62.1 66.1 72.1 65.9

Net Income (€ m) 24.0 22.1 25.7 15.4

reported EPS (€) 0.80 0.73 0.84 0.50

adj. EPS chng (%) 16.2% 12.3% 15.2% -40.5%

rep. P/E (x) 11.0 13.6 14.4 16.1

EV/EBITDA (x) 7.0 6.9 7.6 6.7


Kostas Ntounas
P/BV (x) 1.5 1.6 1.8 1.3 Deputy Research Director
DPS (€) 0.27 0.30 0.31 0.16 Industrials/Energy/Construction Analyst
+30210 7720 174
Dividend Yield (%) 3.1% 3.0% 2.6% 2.0%
ntounas@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 60 Please refer to important disclosure at the end of the document


SARANTIS Neutral
Price: € 4.56 Consumer Goods 12M target price: € 5.3
(closing price 16/12/2009)

Recommendation Stock Data


52 week low / high 2.40-5.49
The company’s ‘10P/E stands at 9.7x at a16% discount vs. its 5y historical Market cap in € m 174
average (for 2y forward P/Es) and at c.41% discount both vs. the DJ Euro Stoxx Reuters / Bloomberg SRSr.AT / SAR GA
Consumer Goods Index and the weighted average of its wider peer group. Yet, Free float (e) 55%
Institutional ownership (e) 50%
despite these low multiples, we are neutral on the company since Q3 09 results
revealed continued weakness in all of its markets. Key positive catalysts would be Expected return
the improvement of the macroeconomic environment in SEE, favourable FX Upside to price target 16.4 %
movements and developments on the acquisition front. We like the company’s Dividend yield estimate 0.7%
improved cash flow and net debt position, while we believe it is taking the Total return forecast 17.1%
necessary actions for cost containment and WC improvement.

Investment positives Trading Data


Absolute 3m -1%
Leading market shares in Greece -20-year JV agreement with Estee Lauder for -¨ ¨- 12m +9%
the exclusive distribution of its products in Greece, Bulgaria and Romania. Relative to ATG 3m +14%
-¨ ¨- 12m -21%
Long presence in SEE with high market shares of own products and strong 3m avg. daily trading vol. in € m 0.28
distribution network- increasing brand awareness and operating leverage leads to Weight in ATG 0.27%
improvement of profit margins.
Healthy financial position and strong cash flow. Price performance
Share performance
Investment negatives 3200

Dependency on consumer spending levels- trends


2800

The upside in the Greek cosmetics market is limited- however the company’s 2400
profitability is highly dependent on the Greek market as it still accounts for 60% of 4
EBIT 2000

Strong competition in the sector with high marketing needs – Intensification of 1600

competition in SEE from multinationals could inhibit the targeted profitability 1200
improvement in the region
01-09

03-09

05-09

07-09

09-09

11-09
FX risk as it has high exposure in SEE (translation and transaction risks) Gr. Sarantis S.A. Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates


Catalysts
Improvement in product mix and market shares in old countries through Company description
acquisitions – Opportunity for attractively valued targets -after the financial crisis- Sarantis Group, specializes in the manufacturing and
distribution of cosmetics and household products in Greece and
that match the company’s profitability, market share and cost structure targets. in SEE countries. Through a strategic alliance (JV) with Estee
Lauder it holds a leading position in the Greek luxury cosmetics
Increase in profit margins in SEE countries market. The Group is well established in Eastern European
Countries such as Poland, Romania, Bulgaria, Serbia, Czech
Rep., Hungary and FYROM. Sarantis also has a presence in
Successful penetration in Russia, Turkey and Ukraine Turkey, Russia and Ukraine through cooperation with local
distributors. Sarantis agreed with Estée Lauder (US), for the
Successful penetration of Mustang/CTHRU in the US and other counties through production of the male fragrance Mustang and the launch of the
the collaboration with Estee Lauder in the US female fragrance C-THRU and their distribution in North
America.
Key financials 2007 2008 2009E 2010E 2011E
Turnover (€ m) 241.6 259.4 219.6 225.3 233.9
EBITDA (€ m) 37.5 37.5 25.9 28.1 30.5
Net profit (€m) 31.9 25.4 15.3 18.0 20.0
Reported EPS (€) 0.83 0.66 0.40 0.47 0.52
Adj. EPS chng (%) 26.0% -0.6% -39.8% 18.2% 10.7%
Rep. P/E (x) 16.8 6.4 11.4 9.7 8.8
EV/EBITDA (x) 15.3 5.3 7.9 7.0 6.2
Ioanna Katsoula
ROE (%) 35.7% 24.6% 14.0% 14.8% 14.3%
Analyst
ROIC(%) 14.4% 15.4% 10.4% 10.9% 11.3% +30210 7720184
Dividend Yield (%) 1.2% 0.7% 0.7% 1.5% 2.1% katsoula@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 61 Please refer to important disclosure at the end of the document


SIDENOR Outperform
Price: € 4.82 Industrials 12M target price: € 6.8
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 2.59 - 6.70
We maintain our Outperform recommendation and our target price stands at €6.8 Market cap in € m 471
per share. We expect an upturn in steel prices and more favourable spreads on Reuters / Bloomberg SIDr.AT / SIDE GA
steel products in 2010. We anticipate an improvement in Sidenor’s volumes in Free float (e) 42%
2010 in part due to its leading position in the Balkans, and to it continuous Institutional ownership (e) n.a.
expansion in the region, which allows it to operate at high capacity utilization levels
(c. 65-70% in 2009), a trend that we expect to continue in 2010. Finally, Sidenor
possesses early cycle characteristics. Expected return
Upside to price target 38.8%
Investment positives Dividend yield estimate 0.0%
Extended presence in Greece and SEE with the “SD” branded steel products that Total return forecast 38.8%
match EU requirements.
Established distribution network in Greece and SEE with subsidiary SIDMA.
Trading Data
Bargaining power vis-à-vis steel scrap suppliers (bargaining power of customer)
Absolute 3m 6.8%
thanks to the size of its operations vs. other smaller local steel producers. -¨ ¨- 12m 53%
End of major investments to increase capacity of steel operations (c. 3.5m Mt in Relative to ATG 3m 29%
‘09) and to expand distribution network that will support growth and profitability -¨ ¨- 12m 30%
going forward. 3m avg. daily trading vol. in € m 0.48
Weight in ATG 0.6%
Sidenor geographical location allows the company to export to South Eastern
Europe, to the Middle East, and to North Africa.
Price performance
Sidenor is part of the Viohalco group and has access to financing at competitive Share performance
rates.
3200

Investment negatives 6 2800


2400
High dependency on the residential sector and construction related products (c.
4 2000
80% of sales).
1600
The high level of operational leverage to the market price of steel. 1200
01-09

03-09

05-09

07-09

09-09

11-09
The steel industry is cyclical by nature.
Sidenor Steel Products Manufacturing Co. S.A.
High leverage. Greece ATHEX Composite

Catalysts Source: Company, JCF, National P&K Securities Research estimates

Pick up in the Greek residential sector.


New infrastructure projects in the domestic market and in SEE. Company description
Sidenor is the leading producer of long steel products in
Greece and SE Europe. It is part of the holding company
Viohalco, the largest Greek metals processing group. Sidenor
was established in 1962 in Thessaloniki and listed on the
Athens Stock Exchange since 1997. It is specialized in the
production, manufacture and sale of an extended line of steel
products: concrete reinforcing steel, pipes, plates, mesh,
merchant bars wires. Total annual sales are over €2.7bn in
2008 and total volume amounts to 2.4 MMT (325 KMT for
Key financials 2007 2008 2009E 2010E 2011E Corinth Pipeworks, 2.0bn for Sidenor steel operations).
Turnover (€ m) 1,390 1,713 981 1,081 1,463
EBITDA (€ m) 213 139 18 117 201
Profit after-tax (€m) 92 29 -46 21 78
EPS (€) 0.95 0.30 -0.48 0.22 0.81
EPS chng (%) -15.7% -68.1% -258% 145% 275%
P/E (x) 5.7 17.7 n.a. 22.2 6.6
EV/EBITDA (x) 7.6 6.6 58.3 8.7 5.2
FCF yield (%) 0.1% 7.2% 11.4% -9.7% 6.4% Victor Labate
Oil & Gas / Industrials Analyst
DPS (€) 0.25 0.00 0.00 0.06 0.24
+30210 7720 076
Dividend Yield (%) 2.5% 0.0% 0.0% 1.2% 4.5% labate@nationalpk.nbg.gr
Source: SIdenor, National P&K Securities Research estimates

Page 62 Please refer to important disclosure at the end of the document


TERNA ENERGY Neutral
Price: € 6.58 RES 12M target price: € 6.00
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 3.60/7.00
The company has an ambitious investment program that if accomplished will more Market cap in € m 719.4
than triple its investment capacity during the next two years and will render Terna Reuters / Bloomberg TENr.AT / TENERGY GA
the biggest domestic RES producer. The Government is expected to vote a law Free float (e) 25%
Institutional ownership (e) 20%
that should reduce bureaucracy and other administrative bottlenecks aiming to
facilitate drastically the licensing procedure.
Although we agree that risk is low through a medium-term perspective, we believe Expected return
that valuation is demanding and expect tangible evidence on faster licensing Upside to price target -8.4%
procedures in order to turn positive. Dividend yield estimate 0.9%
Total return forecast -7.5%

Investment positives
Trading Data
Favorable environment for wind energy in Greece
Absolute 3m 0.22%
Secure supply of turbines mid-term -¨ ¨- 12m 66%
Relative to ATG 3m 40%
Wind energy in Greece is a value-adding power segment with IRRs higher than -¨ ¨- 12m 21%
15% 3m avg. daily trading vol. in € m 0.36
Weight in ATG 1%
Net cash position of €81m

Investment negatives Price performance


Share performance
Administrative barriers cause legitimate difficulties 8 3200

Bureaucratic procedures lead to significant investment delays 7 2800

Intense competition 6 2400

5 2000

Catalysts 4 1600

3 1200
New land planning law to lower litigation risk
01-09

04-09

07-09

10-09
RES tariff evolution Terna Energy S.A. Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates


Expansion abroad

Grant of installation licenses for approximately 250 MW Company description


Terna Energy is involved in the construction and operation
of wind farms, small hydroelectric plants and integrated
process units for the overall Management and energy
utilization of wastes and biomass. It currently operates nine
wind power farms in Greece with a total output capacity of
142 MW. The company is also active in the construction
industry as a contractor in the private and public works
sectors where it undertakes energy, industrial, building and
other engineering projects.

Key financials 2007 2008 2009E 2010E 2011E


Turnover (€ m) 60 74 71 81 113
EBITDA (€ m) 25 27 27 35 58
Adj. net profit (€ m) 14 24 18 16 25
EPS (€) 0.17 0.22 0.16 0.15 0.23
Adj. EPS chng (%) 87% 30% -25% -11% 59%
P/E (x) 64 18 40 45 28
EV/EBITDA (x) 29 11 25 24 15
P/BV 3.5% 3.2% 2.6% 2.6% 4.2%
RoE (%) 0.06 0.07 0.06 0.05 0.08
George Vitorakis
Analyst
DPS (€) 0.8% 1.0% 0.9% 0.8% 1.3% +30210 7720 151
EV per MW (€ m) 6.2 1.9 3.8 3.0 2.0 gvitorakis@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 63 Please refer to important disclosure at the end of the document


TITAN Neutral
Price: € 21.58 Building Materials 12M target price: € 21.0
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 11.20 - 26.63
Neutral rating is maintained as we reiterate our scepticism of the short to medium Market cap in € m 1,767
term prospects of Titan due to the unfavourable market conditions in its core Reuters / Bloomberg TITr.AT / TITK GA
markets. Free float (e) 49%
Institutional ownership (e) n.a.
Investment positives
Excellent track record in creating value for shareholders through successful
acquisitions coupled with solid organic growth in the long run. Expected return
Upside to price target -2.7%
Early cycle characteristics linked to the group’s exposure to mature markets and to Dividend yield estimate 1.4%
Total return forecast -1.3%
the residential sector.

Upside risk is higher than downside risk at this point of the cycle in the US market.
Trading Data
Strong performance in Egypt is expected to continue into 2010 due to solid Absolute 3m -6%
demand and good pricing. In addition, the new production line will increase Titan’s -¨ ¨- 12m 60%
production capacity in Egypt by 1.5mil MT to 5mil MT and will boost profit margins Relative to ATG 3m +8%
on the back of the replacement of imports with locally produced cement. -¨ ¨- 12m +17%
3m avg. daily trading vol. in € m 2.1
Weight in ATG 2.6%
Increased free cash generation going forward due to lower WC needs, completion
of major investments by yr-end ’09 and effective cost-cutting initiatives
implemented across the board.

Investment negatives
Heavy exposure to the residential sector will remain a drag on the group’s Price performance
Share performance
revenues and profitability, at least in the short run.
3200
26
Declining trend in the Greek housing market is maintained. 24 2800
22
Significantly increased debt position since 2008 raises some concerns on the 20
2400

company’s ability to meet debt covenants. Having said that and based on current 18
2000
data and projections, we think that leverage is not an issue at least for now. 16
14 1600

Accelerated competition and increased imports from Turkey are putting pressure 12
1200
on prices in the domestic market and in the SEE region.
01-09

03-09

05-09

07-09

09-09

11-09
Catalysts Titan Cement Co. S.A. Greece ATHEX Composite

Source: Company, JCF, National P&K Securities Research estimates


Ongoing uncertainty regarding mining operations in Lake Belt, Florida.

Trends in the domestic residential sector and in the US market.


Company description
Founded in 1902 and listed in the ASE in 1912, Titan is a multi-
regional vertically integrated producer of cement and related
building materials. In 2007, total group sales of cement and
cementitious materials were over 15.5m MT. The group also
sold 6m m3 of ready mix concrete and 20m MT of aggregates
and various other building materials.

Key financials 2007 2008 2009E 2010E 2011E


Turnover (€ m) 1,497 1,578 1,402 1,508 1,647
EBITDA (€ m) 428 380 323 383 436
Net Income (€ m) 240 208 128 165 195
reported EPS (€) 2.85 2.53 1.58 2.03 2.40
adj. EPS chng (%) -7.3% -11.0% -37.6% 28.4% 18.2%
rep. P/E (x) 11.0 5.5 13.7 10.6 9.0
EV/EBITDA (x) 7.4 5.8 8.4 6.7 5.6 Kostas Ntounas
P/BV (x) 2.2 0.8 1.2 1.1 1.0 Deputy Research Director
Industrials/Energy/Construction Analyst
DPS (€) 0.75 0.42 0.30 0.39 0.46 +30210 7720 174
Dividend Yield (%) 2.4% 3.0% 1.4% 1.8% 2.1% ntounas@nationalpk.nbg.gr
Source: Company, National P&K Securities Research estimates

Page 64 Please refer to important disclosure at the end of the document


VIOHALCO Neutral
Price: € 4.14 Industrials 12M target price: € 4.2
(closing price 16/12/09)

Recommendation Stock Data


52 week low / high 3.10 - 5.83
We maintain our Neutral rating and our target price stands at €4.2 per share. We Market cap in € m 786
anticipate weak demand for metal products due to the economic recession in Reuters / Bloomberg VIO.AT / BIOX GA
Europe and the sluggish residential construction sector in Greece. This is Free float (e) 45%
Institutional ownership (e) n.a.
expected to impact volumes and prices, and hence margins for metal processors.
We note however an improvement in input costs, with the significant decrease in
raw material costs, namely lower metal and oil prices, but not enough to offset Expected return
margin pressure related to the difficult business environment. Upside to price target 6.6%
Dividend yield estimate 0.0%
Investment positives Total return forecast 6.6%
Strongly positioned in Greece and SEE as the leading producer of long “SD”
branded steel products in a region prone to earthquakes, and market leader in Trading Data
Greece for the manufacturing of copper and flat rolled aluminium products Absolute 3m -12%
-¨ ¨- 12m -4.4%
Extensive distribution network in SEE through a vast commercial companies
Relative to ATG 3m 5.4%
network and SIDMA -¨ ¨- 12m -19%
Over 65% of sales abroad 3m avg. daily trading vol. in € m 0.402
Weight in ATG 1%
Diversified client base in the construction, energy, industrial, pipeline,
transportation, beverage, food and digital printing industry
Price performance
Significant real estate properties through the Noval real estate holding and further Share performance
development planned in this segment 3200

Investment negatives 2800

2400
Complicated group structure with seven listed companies and numerous
participations in non-listed companies 4 2000

1600
Relatively high exposure to the construction sector
1200
Cyclical business
01-09

03-09

05-09

07-09

09-09

11-09
Catalysts Viohalco S.A. Greece ATHEX Composite

Profitable capacity additions Source: Viohalco, JCF, National P&K Securities Research estimates

Introduction of new high value-added products

Company description
Viohalco S.A. was founded in 1937 and was listed on the Athens
Stock Exchange in 1947. The group participates in
approximately 90 companies, six of which (Elval S.A., Etem S.A.,
Halcor S.A., Hellenic Cables S.A., Sidenor S.A., and Corinth
Pipeworks S.A.) are listed on the Athens Stock Exchange and
are leading companies in their sectors. Additionally, Viohalco
owns real estate including subsidiary Noval Real Estate. With
production facilities in Greece, Bulgaria, FYROM, Romania and
the United Kingdom, the companies specialize in the
manufacture of copper (Halcor S.A. and SofiaMed S.A.) and
steel products (Sidenor S.A., Stomana Industry S.A. and Corinth
PIpeworks S.A.) as well as cables (Hellenic Cables S.A. and
ICME ECAB S.A.).

Key financials 2007 2008 2009E 2010E 2011E


Turnover (€ m) 3,683 3,763 2,274 2,525 2,969
EBITDA (€ m) 394 183 187 247 318
Profit after-tax (€m) 84 -11 -10.8 30.1 72.8
EPS (€) 0.42 -0.06 -0.05 0.15 0.37
EPS chng (%) -25.8 -114 -4.8 -380 142
P/E (x) 23.5 n.a. n.a. 22.0 9.1
EV/EBITDA (x) 9.6 13.4 10.3 8.2 6.5
FCF yield (%) 1.0 -1.0 90.4 6.2 22.3 Victor Labate
Oil & Gas / Industrials Analyst
DPS (€) 0.13 0.05 0.00 0.05 0.11 +30210 7720 076
Dividend Yield (%) 1.3 1.3 0.0 1.4 3.3 labate@nationalpk.nbg.gr
Source: Viohalco, National P&K Securities Research estimates

Page 65 Please refer to important disclosure at the end of the document


Disclosure Appendix
This marketing communication has been produced by National P&K Securities S.A., which is regulated by the Hellenic Capital Market Commission, and distributed in the United
Kingdom by National P&K Securities S.A. – London branch, which is authorised and regulated by the Financial Services Authority. This marketing communication is solely for
informative use only and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any
prohibition on dealing ahead of the disseminated of investment research. This document does not constitute or form part of an offer or invitation to subscribe for or purchase or
sell or solicitation of any offer to subscribe for or purchase or sell any securities referred to herein and neither this document nor anything contained herein shall form the basis of
or be relied upon in connection with any contract or commitment whatsoever. The information contained in this report including any expression of opinion has been taken from
sources believed to be reliable but it cannot be guaranteed and no warranty or representation is given that such information is accurate or complete and it should not be relied
upon as such. Any opinions expressed by us herein reflect our judgement at this date and are subject to change with out notice. This communication is for distribution only to
persons who (i) have professional experience in matters relating to investments or (ii) are persons falling within Article 49(2) (a) to (d) (“high net worth companies, unincorporated
associations etc”) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or to whom it may otherwise lawfully be passed on (all such persons together
being referred to as “relevant persons”). This report is directed only at relevant persons and must not be acted on or relied on by persons who are no relevant persons. Any
investment or investment activity to which this report relates is available only to relevant persons and will be engaged in only with relevant persons. This notice will not affect your
rights under the Financial Services Markets Act 2000 or the regulatory system.

National P&K Securities S.A. is not engaged in any agreement with the subject companies for the preparation of this report. National P&K Securities S.A. may do and may seek to
do business with companies covered in its research reports. Therefore, investors should be aware that there might be a conflict of interest that could influence the impartiality of
this report. Investors should consider this report as only one of the factors influencing their investment decision. Securities contented in this report are subject to investment risks,
including the loss of the initial capital invested. This report is addressed to professional investors only and no part of this report may be reproduced or passed on in any manner
without prior permission. We verify that this report has been prepared according to our regulations and guidelines concerning conflict management. According to National P&K
Securities S.A. regulations, the Equity Analysis Department is restricted to communicate and publish only the necessary data according to applicable laws. National P&K
Securities S.A. conforms to the relative regulations regarding confidential information and market abuse.

National P&K Securities S.A. and/or National P&K Securities S.A. – London branch and/or their associated group companies or a person or persons connected with the
companies may from time to time act on their own account in transactions in any securities mentioned herein or in any related investment or may act as a market maker or may
have acted in some capacity in relation to a public offering of such securities in the past. Additional information regarding this will be furnished upon request.

All opinions suggestions and estimates for each company contended in this report constitute the personal views of the respective author at this date and are subject to change
without notice. It is certified that the analysts’ personal views or specific suggestions expressed in this report were not and will not be in any case linked directly or indirectly with
the analysts’ compensation.

National P&K Securities S.A. policy is to update research reports as it deems appropriate, based on developments with the subject company, the sector or the market that may
have a material impact on the research view or opinions stated herein.

Disclosure Checklist for Companies mentioned


Company Name Reuters Disclosure Company Name Reuters Disclosure
Aegean Airlines AGNr.AT 1 Hellenic Postbank GPSr.AT 1, 4
Alapis ALAr.AT 10 Iaso IASr.AT 2, 10
Alpha Bank ACBr.AT 3 Intracom INRr.AT none
ATE Bank AGBr.AT none Intralot INLr.AT 3
Terna Energy TENr.AT 1 J&P Avax AVAr.AT 2, 10
Autohellas AUTr.AT none Jumbo BABr.AT none
Bank of Cyprus BOCr.AT 3 Korres KRRr.AT 1, 3
Coca Cola Hellenic HLB.AT 3,9 Marfin Popular Bank MRBr.AT 3 .4
Corinth Pipeworks CORr.AT none Metka MTKr.AT none
EFG Eurobank EFGr.AT 3 Motor Oil MOR.AT none
Ellaktor HELr.AT 3,9 Mytilineos Holdings MYTr.AT 2, 3,9,10
Elval VAL.AT none OPAP OPAr.AT 3
EYDAP EYDr.AT none OTE OTEr.AT 1, 3, 10
EYATH TWSr.AT none Piraeus Bank BOPr.AT 3
Folli Follie FOLr.AT none PPA OLPr.AT none
Forthnet FORr.AT 1 PPC DEHr.AT 3
Fourlis FRL.AT none S&B Ind. Minerals BARr.AT none
Frigoglass FRIr.AT 9 Sarantis SRSr.AT none
Gek Terna HRMr.AT 9 Sidenor SID.AT none
Halcor HAL.AT 1 Teletypos TELr.AT none
Hellenic Duty Free HDFr.AT 4 Titan TTNr.AT none
Hellenic Exchanges EXCr.AT 1 ,3 Viohalco VIO.AT none
Hellenic Petroleum HEPr.AT 10

Source: National P&K Securities

1. National P&K Securities and/or its affiliate(s) has acted as manager/co-manager/adviser in the underwriting or placement of securities of this company within the past 12
months.
2. National P&K Securities and/or its affiliate(s) has received compensation for investment banking services from this company during the past 12 months.
3. National P&K Securities and/or its affiliate(s) makes a market in the securities of this company.
4. National P&K Securities and its affiliate(s) own five percent or more of the total share capital of this company.
5. The company and its affiliate(s) own five percent or more of the total share capital of National P&K Securities and its affiliates.
6. National P&K Securities has sent the research report to the company prior to publication for factual verification.
7. Following 6, National P&K Securities has changed the contents of the initially sent research report, with respect to: no change.
8. National P&K Securities has received compensation from the company for the preparation of this research report.
9. National P&K Securities has acted as a broker in stock options plans, share buybacks and/or own shares sales of securities of this company within the past 12 months.
10. National P&K Securities has acted as an arranger and/or credit facilitator and/or advisor in the issuance of convertible bonds and/or in the provision of credit facility.
Risks and sensitivity:
The views and recommendations for the companies mentioned in this daily report have various levels of risk depending on company, industry and market events. In addition, our
target prices and estimates for the companies mentioned in this daily report are sensitive to various factors including interest rates, inflation, the local economic environment,
market volatility, management continuity or other company specific events.

Ratings Distribution (Last quarter)


Outperform Neutral Underperform
Greek Equity Research Coverage (45) 49% 43% 8%
% of companies in each rating category that are investment banking clients 61% 55% 31%
Source: National P&K Securities

Definition of investment ratings


Outperform, Neutral, Underperform: Denote notional investment ratings (not recommendations) pegged to the performance of the General Index, which imply a positive, neutral
and negative view respectively.

Page 66 Please refer to important disclosure at the end of the document


Outperform: The stock is expected to perform above the General Index
Neutral: The stock is expected to perform in line with the General Index
Underperform: The stock is expected to perform below the General Index
Further information on the securities referred to herein may be obtained from the Companies and/or their affiliate(s) upon request.

National P&K Securities S.A.


Member of the Athens Stock Exchange Sales: Research:
91 Michalakopoulou Str.
Damianos Papakonstantinou +30 210 7720130 Theodore Ritsos +30 210 7720176
115 28 Athens, Greece
Dimitra Triantafillopoulou +30 210 7720578 Kostas Ntounas +30 210 7720174
Telephone: +30 210 7720000 Merve Kosker +30 210 7720122 Ioanna Katsoula +30 210 7720184
Facsimile: +30 210 7720001 Zois Mpeloumpasis +30 210 7720146 Panagiotis Kladis +30 210 7720185
E-mail: info@nationalpk.nbg.gr Pantelis Petritsis +30 210 7720562 Iakovos Kourtesis +30 210 7720251
George Goufas +30 210 7720147 Victor Labate +30 210 7720076
Dimitris Spartiotis +30 210 7720587 George Vitorakis +30 210 7720151
Nikos Kyriazis +30 210 7720160

National P&K Securities S.A. – London branch


75 King William Str. Sales: Alan Shala +44 207 105 3803
EC4N 7BE, London, UK Bahar Sangar +44 207 105 3804
Telephone: +44 207 105 3801 Panos Paraskevopoulos +44 207 105 3805
Facsimile: +44 207 105 3895 Stephen Rahn +44 207 105 3806
Tony Watson +44 207 105 3807

Page 67 Please refer to important disclosure at the end of the document


ΝATIONAL P&K SECURITIES S.A.

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