GREECE | EQUITY RESEARCH

December 29, 2014

STRATEGY UPDATE

GREEK EQUITY STRATEGY ASE General Index Price

Another ride on the Greek political rollercoaster 1450

1350
Parliament fails to elect a new President; early elections ahead The government
did not manage to get its nominee elected after failing to secure the 180 votes 1250
needed, in the final round of the Presidential election process. Early elections will 1150
th
take place on Jan 25 , as per the PMs statement following the failed vote.
1050
Whats next (1) - Early elections and formation of a new government: The majority
950
of recent opinion polls paint a fragmented landscape with SYRIZA maintaining a lead
against New Democracy which however has narrowed to c. 3.0% recently, from an 850
average 4-5% two weeks ago. In addition, the probability of the formation of a single
750
party government appears rather low, while a SYRIZA led coalition appears to be the Dec-13 Mar-14 Jun-14 Sep-14 Dec-14
base case given current polls. Hence, deliberations between the elected political
parties should start immediately post elections in order to form a new coalition
government.
Index Data
Whats next (2) - Resume Troika review: A critical and urgent task for the new Reuters RIC .ATG
government will be to resume discussions with the EU and the IMF in order to Bloomberg Code ASE Index
finalize i) the pending troika review and disbursement releases thereof, given the
Greek states admittedly tight financing position, and ii) the modalities of the next Closing Price (29/12) 819.81
program which will include a precautionary credit line (ECCL), and possibly a new IMF
52 Week High 1,379.42
role, given that the current program with the EU expires at the end of February 2015,
52 Week Low 756.80
following the two month extension given by the Eurogroup on December 8th.
Furthermore, any new agreement on a program with the countrys international Performance (1m) -17.2%
creditors will need to be ratified by the newly elected Greek parliament. Performance (YTD) -29.5%
Investors to hold their breath for yet another time The market is down 25% ever
since the Greek PM announced he was bringing the presidential election forward in
early December, while banks have shed a whopping 40% over the same time period.
We expect investors with an increased risk appetite to step in to take advantage of
Eurobank Equities Research
the discounted valuation landscape that is being shaped (Banks @ 0.6x 2015e TBV
while non-financials at c5x 2015e EV/EBITDA), nevertheless we are wary of their
Nikos Koskoletos, CFA , Head of Research
capacity or willingness to bid the market higher as re-risking of Greek assets on the + 30 210 3720257 nkoskoletos@eurobankequities.gr
wobbly political landscape that is being formed, takes its toll. On our numbers a
350bps wider risk-free from our base 6.5%, renders a market fair value at 800 points. Stamatios Draziotis, CFA
+ 30 210 3720259 sdraziotis@eurobankequities.gr
Alas, markets tend to trade at a discount to model derived FV.
Panagiotis Kladis, CFA
Top picks reshuffling Amidst current events, we are removing NBG, OTE and GEK
+ 30 210 3720267 pkladis@eurobankequities.gr
Terna from our top pick portfolio as we are cautious on names geared to the
domestic economys recovery which might be disrupted in the short term given the Katerina Zaharopoulou
political backdrop. We remain selective in our picks focusing on strong + 30 210 3720252 kzaharopoulou@eurobankequities.gr

fundamentals, which could outperform in a volatile environment. To this respect we Christina Kouklaki
maintain OPAP and Mytilineos and add Hellenic Exchanges on its solid balance sheet + 30 210 3720254 ckouklaki@eurobankequities.gr
and discounted valuation. Sales
+30 210 3720119
Eurobank Equities Top Picks Portfolio
P/E EV/EBITDA* Trading
TP
Stock Mcap (EUR mn) Upside Rating +30 210 3720168 / 110
(EUR) 2015 2016 2015 2016
OPAP 2.855 13.40 50% Buy 12.4x 10.5x 5.4x 4.4x See Appendix for Analyst Certification and
Mytilineos 538 9.40 104% Buy 5.1x 4.5x 2.8x 2.4x important disclosures
HELEX 297 7.70 63% Buy 13.8x 12.5x 4.9x 3.6x

Source: Eurobank Equities Research. Prices as of 29th Dec 2014.

 STRATEGY
December 29, 2014

Valuation Greece vs. Emerging and periphery markets

Current valuation - Greece vs. other Emerging Markets and EU periphery
Main Market
EV / EBITDA EV / EBITDA Div Yld
Country Index Mcap PE 2015e PE 2016e
2015e 2016e 2015e (%)
(EURbn)
Emerging Markets
Turkey 188 10.1x 8.8x 8.2x 7.4x 2.6
Poland 193 13.0x 11.1x 5.9x 5.8x 3.8
Czech Rep. 37 14.1x 12.1x NA NA 4.4
Hungary 11 10.4x 8.2x 4.8x 4.5x 4.3
Average 11.9x 10.1x 6.3x 5.9x 3.8
EU Periphery
Spain 667 14.1x 12.2x 7.9x 7.5x 4.7
Italy 479 13.0x 10.9x 6.0x 5.6x 3.9
Portugal 52 12.8x 8.8x 7.4x 6.8x 4.2
Average 13.3x 10.6x 7.1x 6.6x 4.3

Greece * 49 11.7x 7.9x 6.5x 6.0x 3.2

Source: Bloomberg. * Greece non-financials, Eurobank Equities Research.

Greek stocks performance last 3 months

3-month % return
20
10
Non-financials Banks
0
-10
-20
-30
-40
-50
-60
-70
NBG
FFG

OTE
JUMBO

EYDAP

EYATH

PPC

ALPHA
ELPE
ELLAKTOR

PIRAEUS
OPAP

HELEX

SIDENOR
CCH

MOH

METKA

CPW
TERNA ENERGY
FRIGOGLASS
MYTILINEOS

FOURLIS

GEK TERNA
TITAN

INTRALOT
AEGEAN

GRIVALIA

Source: Eurobank Equities Research, Bloomberg

2
 STRATEGY
December 29, 2014

Eurobank Equities Investment Firm S.A. 10 Filellinon Street

Member of Athens Exchange, 105 57 Athens, Greece
Cyprus Stock Exchange and Eurobank Group.
Telephone: +30 210-3720 000
Regulated by the Hellenic Capital Markets Commission Facsimile: +30 210-3720 001
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VAT No: 094543092, Reg. No. 003214701000 E-mail: research@eurobankequities.gr

IMPORTANT DISCLOSURES
This report has been issued by Eurobank Equities Investment Firm S.A., a member of the Athens Exchange, a member of the Cyprus Stock Exchange and a member of
Eurobank Ergasias S.A. Eurobank Equities Investment Firm S.A., is regulated by the Hellenic Capital Markets Commission (HCMC) with authorization number
6/149/12.1.1999. This report may not be reproduced in any manner or provided to any other persons. Each person that receives a copy by acceptance thereof
represents and agrees that it will not distribute or provide it to any other person. This report is not an offer to buy or sell or a solicitation of an offer to buy or sell
securities mentioned herein. The investments discussed in this report may be unsuitable for investors, depending on their specific investment objectives and financial
position. The investments discussed in this report are subject to risks and in respect of some investments there is risk for multiplied losses to be caused in respect to
the capital invested.
The information contained herein has been obtained from sources believed to be reliable but it has not been verified by Eurobank Equities Investment Firm S.A. The
opinions expressed herein may not necessarily coincide with those of any member of the Eurobank Group. No representation or warranty (express or implied) is made
as to the accuracy, completeness, correctness, timeliness of fairness of the information or opinions herein, all of which are subject to change without notice. No
responsibility of liability whatsoever or howsoever arising is accepted in relation to the contents hereof by Eurobank Equities Investment Firm S.A. or any of its
directors, officers or employees.
Eurobank Equities Investment Firm S.A. follows procedures under Eurobank Group policies that set up Chinese Walls, restricting communication between Research and
other departments inside the Company or the Group so that Eurobank Equities Investment Firm S.A. complies with regulations on confidential information and market
abuse.
Eurobank Equities Investment Firm S.A. or any of its related legal persons, does not hold shareholdings exceeding 5% of the total issued share capital in any of the
subject companies mentioned in this report, with the exception of Hellenic Post Bank, Grivalia Properties, Lamda Development, Altec, Nikas, Quality & Reliability, Alpha
Trust Andromeda, Kardasilaris and to the Cyprus Stock Exchange listed Cyprus Airways Public Ltd.
None of the subject companies mentioned in this report holds shareholdings exceeding 5% of the total issued share capital of Eurobank Equities Investment Firm S.A.,
or any of its related legal persons, with the exception of Eurobank Ergasias S.A.
Eurobank Equities Investment Firm S.A., or any of its related legal persons, is not a market maker (of stocks or of derivative contracts on stocks) to any of the subject
companies mentioned in this report with the exception of Alpha Bank, Bank of Cyprus, Coca Cola Hellenic, Corinth Pipeworks, Ellaktor, Eurobank, Grivalia Properties,
EYDAP, Gek Terna, Frigoglass, Hellenic Exchanges, Hellenic Petroleum, Intralot, Jumbo, MIG, Motor Oil, Mytilineos, National Bank, OPAP, OTE, Piraeus Bank, PPC,
Sidenor, Terna Energy, Titan, Viohalco, FF Group, Metka, Piraeus Port Authority, Euroconsultants, Anemos, Profile, Reds.
Eurobank Equities Investment Firm S.A., or any of its related investment banking services legal persons, is not a party to any other agreement relating to the provision
of investment banking services, which a) has been in effect over the previous twelve months or b) has given rise during the same period to the payment of a
compensation or to the promise to get a compensation paid, with any of the subject companies mentioned in this report with the exception of the following: Anemos,
Athens Medical Center, Attica Bank, Digimed Communications, DOL, Electroniki Athens, Ellaktor, Eurobank, Grivalia Properties, EYATH, EYDAP, Hygeia, Inform Lykos,
Lamda Development, Maillis, Piraeus Bank, Selonda Aquaculture, Teletypos.
Eurobank Equities Investment Firm S.A., or any of its related legal persons, is not a party to an agreement relating to the production of this report with the subject
companies mentioned in this report.
Eurobank Equities Investment Firm S.A. occasionally trades for own account on investment instruments related to companies mentioned in this report.
Analyst Certification:
This report has been written by Nikos Koskoletos (CFA), Stamatios Draziotis (CFA), Helen Herra, Katerina Zaharopoulou, Panagiotis Kladis (CFA), Christina Kouklaki.
Analyst Compensation:
The remuneration of Nikos Koskoletos (CFA), Stamatios Draziotis (CFA), Helen Herra, Katerina Zaharopoulou, Panagiotis Kladis (CFA), Christina Kouklaki is not tied to the
investment banking services performed by Eurobank Equities Investment Firm S.A. or any of its related legal persons. Nikos Koskoletos (CFA), Stamatios Draziotis (CFA),
Helen Herra, Katerina Zaharopoulou, Panagiotis Kladis (CFA), Christina Kouklaki did not receive or purchase the shares of the subject companies mentioned in this
report prior to a public offering of such shares.
Planned Frequency of Updates:
Eurobank Equities Investment Firm S.A. provides daily and monthly updates as well as updates on companies based on company-specific developments or quarterly
financial results announcements or any other publicly available information.
Eurobank Equities Investment Firm S.A. Rating System:
Stock Ratings Coverage Universe Investment Banking Clients
Count Total Count Total
Buy 14 48% 2 14%
Hold 8 28% 2 25%
Sell 3 10% 0 0%
Restricted 2 7% 2 100%
Under Review 2 7% 0 0%
Total 29 100%
Analyst Stock Ratings:
Based on a current 12-month view of total shareholder return (percentage change in share price to projected target price plus projected
Buy:
dividend yield), we recommend that investors buy the stock.
Hold: We adopt a neutral view on the stock 12-months out and, on this time horizon, do not recommend either Buy or Sell.
Sell: Based on a current 12-month view of total shareholder return, we recommend that investors sell the stock.
Restricted: Under Eurobank Group policy and / or regulations which do not allow ratings
Under Review: Our estimates, target price and recommendation are currently under review.