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Erste Group Research

Erste Group Research – CEE Equity Monthly

Erste Group Research CEE Equity Monthly | Equity | CEE February 2014

CEE Equity Monthly

CEE again suffered from souring sentiment towards emerging markets. However, the theme of strong earnings growth momentum is still alive, potentially helping the region to stand out against other emerging markets.

Henning Eßkuchen [email protected] Günther Artner, CFA (A) [email protected] Peter Bartek (CZ) [email protected] Mihai Caruntu (RO) [email protected] Mladen Dodig (SR) [email protected] Magdalena Komaracka, CFA (PL) [email protected] Juraj Kotian (Macro) [email protected] Josezf Miro (HU) [email protected] Davor Spoljar, CFA (HR) [email protected] Can Yurtcan (TR) [email protected]

Sentiment has received a big blow. It was not only concerns surrounding emerging market growth that were triggered by negative news from China; the latest CEE ZEW indicator also nosedived. However, since the latter was almost entirely driven down by sour sentiment towards Turkey, we stand by our view that CEE could be the first emerging market region in which a transfer of growth from recovering developed markets becomes visible. Poland strongly confirms that view with the latest macro data. We also take confidence from the fact that stock market expectations have finally recovered strongly, with the soundest moves being seen for Austria and Romania. Actually, only Turkey remained on a negative trend on this measure, something which might also eventually turn out to have been overdone. Our theme of earnings growth momentum continues to work, with CEE now already taking the global lead on this measure. Hungary remains strong on momentum, as does Austria. Poland has improved slightly, while the Czech Republic and Romania show some slowdown in growth momentum. Turkey clearly remains the laggard. However, the revision rates indicate some slowdown, with Poland still staying much stronger than the rest of the region and Turkey finally having turned negative. Valuation is still of little concern, hence PEG for the region also contracted further. Poland in particular stayed on track. We stand by our allocation with positive views on Austria and Romania. We also keep our positive call on Poland. Macro data confirms the continued recovery story for that market, making an outlook on much needed further improvement in earnings still reliable. Turkey will remain the most volatile and we are still cautious on that market. However, we maintain the longer-term outlook that the stock market could enjoy a nice recovery over the course of the year under the condition that top-down troubles do not spoil the earnings outlook too much; this thus keeps the value argument alive - it trades at 7.8x 12M forward earnings currently. Seeing the CBT acting decisively is a promising sign, while it remains to be seen if that move will ultimately help to sustainably stabilize the currency. Betting on market volatility, we keep Halkbank among our top picks, combining the fundamentals with market upside. By keeping our positive call on the banking sector and on Poland, we add BZ WBK as a top pick. We also add Raiffeisen International and support our positive view on Austria by also naming VIG a top pick alongside UNIQA. Immofinanz also remains in favor. In Romania, we add Romgaz, while keeping FP as a top pick. We amend our Turkish bet by remaining positive on Turkish Airlines, while also remaining positive on Kety. With a cyclical call for Poland, defensive names Pelion and Neuca join our expected underperformers, Sekerbank is our underperformance call for Turkey.

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Table of contents

Summary 1

Top picks and expected underperformers 3

Data Summary 49 Highest upside potential 22

Changes in Estimates 23

Changes in Ratings 24

Changes in Target Prices 25

One Month Performance 25

Top 20 Dividend Yield 26

Top 20 P/E 26

Top 20 by Turnover 27

Stock Market Performances 28

Sector Performance 29

Looking Ahead 32

Contacts 36

Disclosures 37

Share prices are as of January 30, 2014 (otherwise stated)

All prices are those current at the end of the previous trading session unless otherwise indicated and are sourced from local exchanges via Reuters, Bloomberg and other vendors. Source for all charts and tables is Erste Group, Bloomberg, Factset. Consensus data are taken from Factset- Excel-Connect. In the sector insights the companies’ relative valuation multiples are comparisons to those for their CEE sectors. All aggregate measures are calculated as a median.



Top picks and expected underperformers In the section below, we highlight the major changes that we have made this month and discuss main arguments for our calls – for the main sectors banks, telecom and oil & gas. The investment horizon for these recommendations is the next four weeks, after which we will review our picks.

Telecom We downgrade TTKOM from overweight to neutral. Its 4Q13e results should be burdened by another TRY450mn loss. We expect 2013e dividend to fall by 50.5%, mainly due to FX losses derived from USD and EUR denominated debts. We maintain our overweight stance on Turkcell, as it is more defensive in the event of currency volatility (thanks to its high USD cash position) and its domestic mobile growth should remain in-tact. The effect of price increases on Telekom Austria’s revenues might not come too soon, as it affects only new customers and non-frill bob segments. The handset subsidy will be reduced in 2014e, though we expect the reduction not to be severe. We therefore maintain our neutral stance on Telekom Austria. Magyar Telekom (neutral) is missing any catalysts for share price correction, though most bad news are already priced in, including the zero dividend. We expect PPF to offer CZK 298.6 to minority shareholders of Telefonica CR (neutral). We have our doubts whether there would be any dividends under PPF controlling ownership, as it implies leaking cash to minority shareholders. Netia should pay dividend for the first time, expected at PLN 0.42. We do not expect any 2013e dividend increase for OPL, as the spectrum auction in Poland should be completed only in March 2014 (after 2013 results are announced). Nevertheless, we think that OPL has the capacity to increase its dividend, it is more about by how much and when. We remain neutral on T-HT. The shares are attractively valued, but it is missing catalysts such as large acquisitions (possible target: Telekom Slovenije). Meanwhile, we expect its 2013 dividend to decline along with the earnings.

We expect stable dividends for Orange Polska and Telekom Austria. We expect higher dividend for Telekom Slovenije (driven by higher earnings) and new dividend for Netia. We expect zero dividend for Magyar Telekom (high spectrum costs led to higher leverage), Turkcell (continuing shareholder dispute). We would expect lower or even zero dividend for Telefonica CR (new owner PPF). We expect lower dividend for T-HT and Turk Telekom, due to lower earnings.

Turkcell remains overweight

TA, MTel and Telefonica CR remain on neutral

Dividend 2013 preview



Oil & Gas The oil & gas sector has not changed its momentum in January. While crude oil prices remained above 100 USD/bbl, EMEA refining markets continued their weakness. After refining margins had a rebound in early January, they turned down by the mid of the month again, standing now at their lowest levels since 2013 – Ural Med Complex is now around – 1 USD/bbl. Petrochemical margins showed more resistance and stayed more or less the same level as in 4Q13 – the current PKN indicative margin is about 730 EUR/t. The current environment bodes ill for firms with a focus on refining, but helps more the upstream producers. We still like Romgaz (Buy, TP: RON 49.5) and OMV (Buy, TP: EUR 43.0) among our stocks, while the Polish refiners like PKN Orlen (Sell, TP: PLN 35.0) and Lotos Group (Sell, TP: PLN 27.5) are on the other end of the range. Romgaz is fuelled by the IMF agreement, which requires Romanian gas prices to rise to the import parity level by 2018. OMV is driven by higher crude oil prices and low valuation, while the success of the Romanian offshore investment could be the long-term catalyst. OMV Petrom (Hold, TP: RON 0.5027) also benefits from higher Romanian gas prices and the new offshore projects in Romania. We also like PGNiG (Buy, TP: PLN 6.9), despite the market is fretted by the consequences of market deregulation. The ramp up of new project will finish in 2014, and the company is generating strong earnings from the current projects. PKN Orlen and Lotos Group are suffering from the poor refining environment, while we expect petrochemical margins to turn sour in the coming years. Their key markets like Poland and the Baltics are still facing contracting fuel demand.

MOL (Hold, TP: HUF 14,500) is unlikely to break out from the current fate. The company now considers to sell its stake in INA if an agreement cannot be reached with Croatian government. Turkish stocks like Tupras (Reduce, TP: TRY 42.0), Aygaz (Hold, TP: TRY 9.9), Petkim (Accumulate, TP: TRY 3.45) and Turcas (Accumulate, TP: TRY 4.53) depend on the development of the Turkish macroeconomics and politics. The recent lira crisis highlighted the risk of the country. We believe the individual corporate stories play less importance in the current situation.

No sustainable recovery in refining margins

Upstream doing better

Romgaz, a new top pick

Turkish stocks to remain depressed by politics



Banks Ahead of the earnings season we do not expect positive surprises to be announced for CEE banks’ 4Q13 results. In contrast, we would rather expect some higher provisions to be packed into 4Q13. This is based on indications ahead of the AQR which we got from RBI and banks active in low asset quality countries like Hungary and Romania. Poland and the Czech Republic might be neutral in this respect. In our view, the focus during the next two months will be on the 2014 outlook including the AQR impact rather than the 4Q13 results. In Poland we saw the results season kick off with no positive surprises. Whilst only the results of mBank were scheduled for February (whilst PKO and PEO are to report in March) we would expect some impact on the share price from the 4Q13 as the consensus is published for all of them in February 2014. The news are full of positive outlook coming from most of the banks’ managements talking about increasing demand for loans, in particular from the side of corporate clients. Most banks count on volume increase this year. We anticipate the performance of the Turkish banks in February to be highly dependent on news flow regarding the emerging markets and the CBT’s actions to combat the further weakening of the TRY. Considering the recent developments and outlook, we think that the profitability outlook of Turkish banks is coming under pressure. We base our expectations on the following arguments: i) the CBT’s recent rate hike could weigh on banks’ asset-liability spreads in 1H14 as Turkish banks are operating with a longer duration on the asset side compared to liabilities, ii) upward loan re-pricings and the potential deterioration in the sentiment could result in lower loan volumes, iii) the credit quality may start to deteriorate as a result of the slowdown in economic activity, higher interest rates and the weaker TRY. Lastly, banks will report their 4Q13 earnings in February and we do not envisage any impact on the share price performance since the outlook will be much more important. To reflect fundamental risk for banks overall and with the particular dampening impact of a rights issue, we add Sekerbank as an expected underperformer. We would continue to overweight BZ WBK and make it a top pick as we believe that the positive outlook for 2014 for the banking sector given by the CEO of the bank, should be accompanied by update on the synergies from Kredyt Bank merger and kick off of the acquisition of Santander Consumer bank, where we are cautious in our estimates for SCB financials this year. We switch to overweight from underweight on mBank, as we expect supporting results to be published in February. We also expect to see some positive outlook for the next year to be given by the CEO. For the coming month, we remain neutral for Bank Pekao as we think that it may deliver a set of uninspiring results with practically no trading gains and increasing financing costs. We are now neutral on PKO BP, as we think that hopes for increasing interest rates in Poland (where the bank could gain on NII increase) may be outbid by the negative sentiment to the emerging markets in general and the lacking demand from pension funds (they were overweight in PKO).

4Q earnings might be burdened by higher provisioning

Managements in Poland give improving outlook

BZ WBK: Overweight maintained – top pick

Turkish banks continue to depend on politics and fundamental impact

mBank: Overweight from Underweight

Pekao: remains Neutral

PKO BP: Neutral from Overweight



Ahead of Komercni’s 4Q13 results publication on 12 February we do not expect substantial news flow. And even after the results, there might be little news changing our neutral view on the stock. The outlook 2014 given at the 3Q13 conference call has been very cautious and we do not expect the management to change this already at the 4Q13 results. With 1.6x BV14e at 13% ROE14e we regard this stock as reasonably priced. OTP should stay on the side line. Problems with NPLs workout in Russia and the depreciation of HUF against EUR and CHF do not help on provisioning level due to the higher monthly installments of FX borrowers. On the other hand, the FX relief plan is still ahead, but government is waiting for top court judges. Top court judges are waiting for EU decision in a specific question (bank changed their applied interest rates themselves and the question is what is in line with the legislation). EU will say something at mid-February, but official detailed opinion may take 1-6 months. Overall it looks like that this story is the same as the IMF story was (only a play), but we have to be cautious with it. On the other hand, OTP is one of the cheapest banking stocks in the region trading at 0.65x BV14e but this might be the case at least until FY13p results are published on 7 March. Since the uncertainties concerning the capitalization of RBI are gone with the capital increase and a pro-forma 9.7% CET1 ratio, we think that the valuation of the RBI stock might be lifted in the 1.0x book value level along with its major competitors in Austria and CEE. Currently, the RBI share trades at around 0.8x BV14e compared to 1.2x for the CEE peers and around 1x for Erste Group. We do not regard the 35% discount to its CEE peers as justified but we also recognize that the profitability level of RBI (7.3% ROE14e) is still lagging behind the CEE peers’ average of 10.6%. This means that a 1.0x book value target within the next few months is more realistic in our view. We therefore put the stock again on our overweight list for February.

Komercni banka: Neutral unchanged

OTP: Neutral maintained

RBI: Overweight from Neutral



Top pick overview table Ferbuary 2014

Austria Poland Turkey Central Europe* SEE & Other**

Banks + Raiffeisen Int. ( ) + BZ WBK ( ) + Halkbank

+ mBank () - Sekerbank ( )

Basic resources / + RHI - Synthos

Chemicals + Kety

- Police

- KGHM

- JSW

Construction / + STRABAG + Akcansa ()

Constr. materials - Wienerberger

Real estate / + Immofinanz + Alarko Holding + Fondul Propr.

Holdings

Health care - Neuca ( ) + Richter Gedeon + Krka

- Pelion ( )

Industrial goods + Andritz () + Tofas ()

& services / Autos

Insurance + UNIQA

+ VIG ( )

Oil & gas + OMV - PKN Orlen + Romgaz ( )

+ PGNiG

- Lotos

Personal goods / + Turkish Airlines - Philip Morris () + Adris Grupa ()

Food / Travel

Retail / Wholesale + BIM

Telcos & Technology + Kapsch + Turkcell + Telekom Slovenije

Utilities / Media + PGE () + CEZ

* Czech Republic, Hungary, ** Romania, Croatia, Serbia, Blue: Top 10 Pick , Red: Expected underperformers

Explanation: In order to focus on the most liquid stocks, we mainly included companies with a market cap of EUR >500mn. We left out any stocks that we believe are currently more or less fairly valued, so that the picture is not crowded by stocks for which we see no need for action. Monthly changes are highlighted using arrow signs in brackets.

Source: Erste Group Research



10 top picks in CEE and Turkey The 10 top picks below represent our best short- to mid-term investment ideas. They are presented in alphabetical order. In December, the whole performance was negatively affected by the strong decline of Turkish stocks, which did make up a significant part of our Top Picks. However, Turkish Airlines managed to stand strongly against the Turkish market. In terms of cumulative performance, the year started with a quite volatile and difficult market environment. Nevertheless, our top picks managed to outperform the benchmark, while our expected underperformers did correctly exactly the opposite. January 2014 evaluation of top picks/expected underperformers

Source: Factset, Erste Group Research, Performance: 30.01.2014 vs.31.12.2013

Among our top ten picks, we include Raiffeisen International, Vienna Insurance Group, BZ WBK and Romgaz, replacing RHI, Kapsch, Alarko Holding and Ford Otosan. Among the expected underperformers, we include Sekerbank, Pelion and Neuca, replacing Eurocash, AmRest and TVN.

February 2014 selection

Top 10 picks Expected underperformers

BZ WBK (new) Neuca (new)

Fondul Proprietatea Pelion (new)

Halkbank Sekerbank (new)

Immofinanz

Kety

Raiffeisen Int. (new)

Romgaz (new)

Turkish Airlines

UNIQA

VIG (new)

Source: Erste Group Research

Top picks outperformed benchmark and expected underperformers

Top

picks NTX

Under-

perf.

Apr-12 -0.4% -2.6% -4.7%

May-12 -8.9% -11.4% -12.7%

Jun-12 7.9% 7.9% -0.5%

Jul-12 6.5% 0.5% -7.7%

Aug-12 -0.2% 2.7% 1.0%

Sep-12 3.1% 3.9% 9.6%

Oct-12 2.4% 0.8% 4.3%

Nov-12 -0.5% 2.0% 5.8%

Dec-12 5.5% 4.9% 3.3%

2012: 15.4% 7.7% -3.7%

Jan-13 2.9% -2.1% 0.5%

Feb-13 -1.7% -0.4% 0.7%

Mar-13 2.1% -4.6% -3.7%

Apr-13 0.6% 0.6% -5.0%

May-13 5.3% 2.2% 6.6%

Jun-13 -3.6% -8.2% -10.1%

Jul-13 0.7% 3.7% 2.4%

Aug-13 -4.8% 2.8% 9.2%

Sep-13 10.7% 2.4% 12.3%

Oct-13 5.4% 5.9% 0.2%

Nov-13 3.0% 0.4% -2.2%

Dec-13 -10.7% -4.2% -5.4%

2013: 8.5% -2.4% 3.3%

Jan-14 0.5% -1.9% -4.2%



1. BZ WBK (Poland, BZW PW) – Buy, target price: PLN 448.0

200220240260280300320340360380400420

52 weeks

BZ WBK WIG 20

Source: Erste Group estimates

Fundamental arguments:

Positive banking market developments stemming from better macro should support the bank’s results in 2014. The bank continues to secure funding (including long term funding in the form of deposits and bonds), which gives the bank a comfortable starting point for the loan expansion in 2014 (it’s current loan to deposit ratio is at 87%). On the back of the macro recovery in 2014 it expects a sector volume expansion of 4-6% this year and it plans to grow about the market by winning market shares in the areas of interest (excluding FX mortgage loans and certain segments of cash loans). Aside from the lending demand, the rebounding economy should also continue to drive the cost of risk down and to positively influence the fee income.

Synergies to unwind in 2014. The Bank has guided that its costs are likely to decline by 9% y/y to PLN 2.6bn in 2014, partly due to lower expenses for integration. IT was even suggested by the Management that the assumed cost synergies could be exceeded. The cost levels should be declining over the year, with however hikes associated with the cumulated cost of depreciation of the Kredyt Bank’s old IT platform.

Additional earnings drivers in 2014. Although BZ WBK had positive surprises in 2013 results, which were of more or less non-recurrent nature (gains on bond, Aviva revaluation one-off) it will also enjoy a one-off gain on the disposal of Arka (mutual fund company) and consolidation of Santander Consumer Bank. In addition, the bank has guided that the NIM should improve over the coming quarters, despite sourcing additional long term (i.e. higher priced) funding. All in all, we expect that the bank’s bottom line should expand by some 20% this year.



2. Fondul Proprietatea (Romania, FP RO) – Accumulate, target price: u.r.

P&L key figures (RON mn) 2010 2011 2012 2013

budget

Revenues from dividends 179.0 519.1 619 618.2

Revenues from disposals 0.0 13.4 208.1 -

Interest revenues 131.5 41.1 24.5 42.1

Total income 576.6 617.9 861.3 660.3 Total fund operating expenses 52.0 55.1 43.3 14.7

Net Profit 456.2 543.8 574.6 570.5

Indicator 2010 2011 2012 Last

NAV (RON mn) 15,328 14,465 14,979 15,014

NAVS (RON) 1.1124 1.0788 1.1371 1.2436

DPS (RON) 0.0314 0.0385 0.04089 0.0498 *

Discount to NAVS - -50.8% -51.7% -34.5%

Dividend yield 9.0% 7.4% 6.1%

*dividend estimated for FY13

0.55

0.60

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0.85

0.9052 weeks

Fondul Proprietatea BET


By mid-December 2013 the second buy-back program targeting the redemption of 1.1bn FP shares (representing 8 % of the share capital) was completed. 600mn shares were repurchased within the buy-back tender offering run between October 15 and November 14 at the price of RON 1/share, while the remaining shares were bought through daily acquisitions on the BSE at an average price of RON 0.72/share. Shares were repurchased for a total of RON 962.6mn (EUR 215.1mn).

At the GSM from November 22, 2013, shareholders approved a new buyback program for 252.8bn shares (the third one), which can be activated after receiving the approval from the Authority for Financial Surveillance (ASF) for cancelling shares redeemed within the first buyback program (representing 1.79% of total outstanding shares).

Shareholders also approved the proposal made by US hedge fund Elliott for a new two-year mandate with early termination provisions for Franklin Templeton, starting on September 30, 2014.

The new investment management agreement will include tough performance criteria for Franklin Templeton, whose performance will be evaluated as of the end of June 2015, with the option of an early termination if two criteria are not cumulatively met. The first condition is a trading discount to the official NAV of a maximum 15% for at least two-thirds of the trading days in the period Oct. 1, 2014 – Jun. 30, 2015. The second criterion is to have an adjusted NAV per share on Jun. 30, 2015, higher than the value from Sep. 2013.

We await a positive impact on the share price in the medium term, due to the tough new management criteria and by the asset manager’s intention of making extra-cash distributions on the back of the reduction of the share capital by cutting shares’ face value to RON 0.95 from RON 1 currently (proposal is subjected so shareholder’s vote in the ESM scheduled for February 3, 2014).



3. Halkbank (Turkey, HALKB TI) – Buy, target price: TRY 19.1

TRY mn 2012 2013e 2014e 2015e

Net interest Income 4,476.1 4,965.0 5,609.1 6,247.3

Net fee/com. inc. 858.4 988.9 1,179.9 1,407.6

Total Income 6,313.4 6,835.6 7,470.6 8,386.5

EBT 3,329.1 3,360.1 3,579.5 4,047.9

Net result after min. 2,595.21 2,688.10 2,863.61 3,238.31

EPS (TRY) 2.08 2.15 2.29 2.59

BVPS (TRY) 9.86 11.01 12.91 15.09

Tang. BVPS (TRY)

Div./share (TRY) 0.25 0.37 0.39 0.41

ROE (%) 24.76 20.61 19.16 18.51

P/E (x) 8.4 5.3 5.0 4.4

P/BV(x) 1.8 1.0 0.9 0.8

Dividend Yield 1.4% 3.2% 3.4% 3.6%

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14

16

18

20

2252 weeks

Halkbank BIST 100



Relatively less impacted by the interest rate hikes: Compared to its competitors, Halkbank operates with a relatively shorter duration mismatch between its assets and liabilities and has a lower share of securities in its asset mix. Hence, the bank stands out as one of the least impacted banks among the large cap banks. Based on its 9M13 financials, every 500bp increase in the TRY rates had a 10.5% negative impact on the book value, while the aforementioned ratio was 13% for the large cap banks, excluding Halkbank.

Good franchise value: Halkbank is well-positioned in the high-margin segments of the Turkish banking sector by having a 36% exposure to SME loans and a 29% exposure to consumer loans. Its high ROE generation is a combination of its high NIM and strong core banking revenues that are derived from its low cost operating base and low cost of risk attained in its lending practices despite its sizeable retail exposure. We anticipate Halkbank’s ROE to hover around the high teens in the medium-term.

Valuation looks highly compelling now: Halkbank is trading at 0.9x of its 2014E book value with a core banking ROE of 21%. Its current valuation indicates that the stock is trading beyond 2 standard deviations of its long-term average and when we consider the relative valuation of Halkbank against the Turkish banks index, we see a similar picture. We regard this case as more of a heightened risk aversion of investors against Halkbank and believe that its share price has been mispriced.



4. Immofinanz (Austria, IIA AV) – Buy, target price: EUR 4.00 Share price (EUR) close as of 30/01/2014 3.55 Reuters IMFI.VI Free float 85.4%

Number of shares (mn) 1,045.4 Bloomberg IIA AV Shareholders Treasury shares (9.0%)

Market capitalization (EUR mn) 3,711.1 Div. Ex-date 04/10/13 Fries Familien-PS (5.6%)

Enterprise value (EUR mn) 9,013.6 Target price 4.00 Homepage: www.immofinanz.com EUR mn 2012 2013 2014e 2015e

Rental income 585.7 655.8 671.7 695.3

Revaluation result 368.2 196.4 47.1 48.3

EBIT 713.0 537.0 519.2 555.0

Net result after min. 291.9 139.2 256.7 302.8

EPS (EUR) 0.27 0.11 0.26 0.30

CEPS (EUR) 0.20 0.24 0.25 0.29

BVPS (EUR) 5.1 5.2 5.3 5.4

NAV/share (EUR) 5.3 5.5 5.6 5.7

Div./share (EUR) 0.15 0.15 0.20 0.20

P/E (x) 9.3 28.8 13.9 11.8

P/CE (x) 12.4 12.8 14.3 12.1

P/NAV (x) 0.47 0.56 0.63 0.62

EV/EBITDA (x) 19.1 16.6 18.1 16.7

Dividend Yield 5.9% 4.8% 5.6% 5.6%

2.82.93.03.13.23.33.43.53.63.7

52 weeks

Immofinanz ATX



Largest CEE real estate company, with market cap of EUR 3.7bn and more than 80% free float. Given the expectation of a moderately improving economic situation in both Western and Eastern Europe and the expectation of an ongoing low interest rate environment, commercial real estate is still an attractive investment class.

Buwog IPO/spin-off approaching: Immofinanz recently announced its intention to acquire an 18,000-unit portfolio in Germany, which would give Buwog the intended 50:50 split between German and Austrian assets. In the case of a signing in the next weeks, we would anticipate a Buwog listing in 1H14. This spin-off should also attract even-driven investors to join the Immofinanz story.

Immofinanz currently trades at a P/NAV multiple of 0.60-0.65x; Buwog should trade at a multiple significantly closer to its book value. This should unlock at least part of the prevailing valuation discount. We consider a spin-off as valuable for investors as an IPO and believe that a spin-off is the more likely option.

Restructuring completed: The firm is back on a growth path, with ongoing projects concentrated on residential projects in Vienna/Berlin and retail in Russia. The recent 2Q13/14 result has shown that Immofinanz is able to deliver strong results.



5. Kety (Poland, PTY PW) – Buy, target price: PLN 239.4

120

140

160

180

200

220

24052 weeks

Kety WIG 20



FCF yield of 5-7%. Kety is on the verge of ending a 5-year CAPEX program, which will result in a decline of CAPEX for 2014/15 by half and a significant boost to FCF generation capacity. We estimate these to be within the range of PLN 10-15 per share, i.e. some 5-7% yield. We believe that this bounty of cash is going to be put to use favorably for shareholders, either as a dividend payment or attractive acquisition. Also, such an FCF yield makes Kety a very appealing acquisition target.

Strength in exports. Export sales grew 25% y/y in 2013, on already big volumes of PLN 600mn, hence building a strong platform for future growth in these markets. On the other hand, sales in Poland declined 7% in 2013, due to the weak domestic market. The recovering Polish economy in 2014 should boost domestic sales and join growth in exports, offering more upside for earnings.

Valuation premium justified. Kety is one of the biggest industrial companies listed on the WSE (other than mining, power, chemicals) and, in comparison with the others, delivers splendid results both in difficult and supportive business environments. Hence, we believe that a valuation premium is justified for such a quality company.



6. Raiffeisen Bank Int. (Austria, RBI AV) – Buy, target price: EUR 38 Share price (EUR) close as of 30/01/2014 28.6 Reuters RBIV.VI Free float 40.6%

Number of shares (mn) 293.0 Bloomberg RBI AV Shareholders RZB (59.4%)

Market capitalization (EUR mn) 8,382.1 Div. Ex-date 03/07/13

Enterprise value (EUR mn) Target price 38.0 Homepage: www.rbinternational.com

EUR mn 2012 2013e 2014e 2015e

Net interest Income 3,472.2 3,711.6 3,814.6 4,006.5

Net fee/com. inc. 1,516.4 1,616.0 1,651.1 1,728.6

Total Income 6,330.7 6,419.4 6,695.2 7,025.2

EBT 1,031.6 764.2 1,025.5 1,456.8

Net result after min. 525.38 254.63 684.73 1,009.59

EPS (EUR) 2.70 1.30 2.40 3.45

BVPS (EUR) 39.26 39.97 37.73 40.39

Tang. BVPS (EUR) 36.40 37.14 35.84 38.50

Div./share (EUR) 1.17 0.40 0.60 0.80

ROE (%) 7.03 3.30 7.28 8.84

P/E (x) 11.2 22.0 11.9 8.3

P/BV(x) 0.8 0.7 0.8 0.7

Dividend Yield 3.9% 1.4% 2.1% 2.8%

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52 weeks

Raiffeisen Bank International ATX



Capitalization issues solved. Since the uncertainties concerning the capitalization of the company are gone with the capital increase and a pro-forma 9.7% CET1 ratio, we think that the valuation of the RBI stock might be lifted in the 1.0x book value level along with its major competitors in Austria and CEE. Currently, the RBI share trades at around 0.8x BV14e compared to 1.2x for the CEE peers and approx. 1.0x for Erste Group.

High discount not fully justified. We do not regard a 35% discount to its CEE peers as justified but we also recognize that the profitability level of RBI (7.3% ROE14e) is still lagging behind the CEE peers’ average of 10.6%. This means that a 1.0x book value target within the next few months is more realistic in our view.

EPS14e to be up 85% y/y starting from low level. For FY14e we adapted our estimates based on a cautious company guidance indicating the same provisions level in 2014 as seen in 2013. We also expect the consensus to revise its forecasts. We foresee a reported net profit of EUR 711mn (+56% y/y) based on 4% annual income growth, 1.5% cost growth and 4% lower provisions. On EPS basis we expect an improvement of 85% y/y to EUR 2.40 which is based on the assumptions that RBI will fully pay back the participation capital (EUR 2.5bn) by 15 February 2014. This means that the elevated 8.5% coupon will be paid for 1.5 months only.



7. Romgaz (Romania, SNG RO) – Buy, target price: RON 49.5

333435363738394041

52 weeks

Romgaz BET



IMF agreement drives Romanian wholesale natural gas prices. Romania agreed with the IMF to converge natural gas prices to the level of imports gradually for both household and non-household customers. The mixed estimated wholesale domestic natural gas price of 62.4 RON/MWh as of Jan 2014 could rise to 119 RON/MWh by end-2018. We believe that Romania will stick to this agreement, as the country’s financial position relies heavily on this accord.

Production is likely to decline, taxation to triple from 2015. We expect Romgaz’s mature fields to have a 1% decline rate over the next 10 years due to natural depletion. Romania is likely to significantly increase the taxation on hydrocarbon producers from 2015, but higher gas prices will offset the impact of rising royalty taxes. In the first nine months of 2013, the company achieved only 0.1% y/y production decline.

We have a TP of 49.5 RON for the stock price, which offers 48% upside, one of the highest levels in our coverage universe alongside OMV. The upside is mainly arising from higher prices – the company’s EBITDA could rise to RON 3.9bn by 2017 from 1.85bn in 2012.



8. Turkish Airlines (Turkey, THYAO TI) – Accumulate, target price: TRY 9.0

4.55.05.56.06.57.07.58.08.59.0

52 weeks

Turkish Airlines BIST 100


.


The growth story is not over yet: Turkish Airlines has become Europe’s third largest airline in terms of pax numbers and the world’s seventh largest airline in terms of the number of destinations. It is ranked first in terms of the number of countries it flies to thanks to the 16% CAGR in passengers carried and 20% CAGR in capacity in the last five years. The company continues to increase its global presence through continuously opening new destinations (54 new destinations in the last two years) and fleet expansion (current fleet of 232 aircraft to reach 436 by 2021). We expect the company’s strong growth story to be valid in the foreseeable future.

Investments will gradually bear fruit: Initial consequence of fast growth on financials could be negative due to one-off expenses, some front-loaded costs and the offering of more competitive prices to grab market share. We may observe these adverse impacts on the company’s short-term financials while the new additions to the fleet continue (2014-2016). However, we argue that, in line with the maturation of those newly opened destinations and greater network, the benefits of the huge capacity expansion will gradually surface through revenue growth with improving margins.

Favorable even under current macro outlook: Turkish Airlines’ high international exposure limits the possible adverse effect of a slowdown in domestic consumption and its revenue-cost mix in terms of currencies (EUR/USD long in revenues, but non-fuel costs are mostly denominated in TRY) enables the company to benefit from the current weakness in TRY on the operational front. These are the two key themes we emphasize as investment positives for Turkish Airlines in this current market environment.

Well-equipped against possible downturns. Our main premise for Turkish Airlines is that, as long as demand is alive, the rest is of secondary importance for the company and the current demand outlook supports the company’s aggressive growth targets. On the other hand, in the case of an unexpected downturn in the market, Turkish Airlines’ low-cost structure, stemming mainly from lower labor costs, presents the company with more room to be more competitive and less affected. The main risks to our call: (i) higher than expected jet fuel prices, (ii) vulnerability to the weak EUR against the USD and TRY; and (iii) regular risks associated with the airline industry that curb air traffic (terrorist attacks, epidemics and a further increase in tension in Syria).



9. UNIQA (Austria, UQA AV) – Accumulate, target price: EUR 10.2

Share price (EUR) close as of 30/01/2014 9.47 Reuters UNIQ.VI Free float 6.9%

Number of shares (mn) 302.4 Bloomberg UQA AV ShareholdersRaiffeisen Zentralbank (31.4%)

Market capitalization (EUR mn) 2,863.6 Div. Ex-date 10/06/13 Austria Privatstiftung (30.6%)

Enterprise value (EUR mn) Target price 10.2 Homepage: www.uniqagroup.com

EUR mn 2012 2013e 2014e 2015e

Premium income 4,864.2 5,374.6 5,548.9 5,742.6

Investment income 791.5 763.3 797.9 812.5

EBT 205.4 330.8 358.0 384.3


EPS (EUR) 0.76 1.05 0.87 0.93

BVPS (EUR) 9.31 9.28 9.65 10.16

EV/share (EUR) 13.42 12.41 13.07 13.87

Div./share (EUR) 0.25 0.30 0.35 0.45

ROE 9.1% 10.1% 9.2% 9.4%

P/E (x) 13.0 9.0 10.9 10.2

P/BV(x) 1.1 1.0 1.0 0.9

Dividend Yield 2.5% 3.2% 3.7% 4.8%

8.08.59.09.5

10.010.511.011.512.012.5

52 weeks

Uniqa ATX


. Fundamental arguments:

We view UNIQA as an intriguing restructuring story and see several catalysts for the share price. Firstly, the effort to reach the 2015 profitability target should produce materially better results. Secondly, the successful re-IPO boosted UNIQA’s low free float significantly, it reached 35.4% after the transaction. This has increased the stock’s trading liquidity substantially and made UNIQA’s inclusion in the ATX very likely (March 24).

The successful re-IPO strengthened an already vastly improved balance sheet further. UNIQA’s management estimates the solvency ratio I to stand a very solid 280-285% currently. Even under Solvency II requirements, UNIQA’s economic capital stood at 113% at the end 2012 (EUR 350mn hybrid issue included). Management is eying 150% and expects the re-IPO to have lifted it to around 140%. Thus, UNIQA’s capitalization is approaching the level of its main peer, VIG.

UNIQA has ambitious goals, but took a step forward in 1-3Q13. We are skeptical that the insurer will be able to lift its EBT to the aspired level of EUR 550mn in 2015. Nonetheless, it is evident that profitability indicators improved substantially in 1-3Q13. This may well only be a first sign of the effectiveness of the UNIQA 2.0 efficiency program.



10. Vienna Insurance Group (Austria, VIG AV) – Buy, target price: EUR 43

Share price (EUR) close as of 30/01/2014 35.6 Reuters VIGR.VI Free float 29.0%

Number of shares (mn) 128.0 Bloomberg VIG AV Shareholders WSWVV (71.0%)

Market capitalization (EUR mn) 4,555.5 Div. Ex-date 11/06/14

Enterprise value (EUR mn) Target price 43.0 Homepage: www.vig.com

EUR mn 2012 2013e 2014e 2015e

Premium income 9,685.7 9,151.8 9,491.9 9,839.6

Investment income 1,219.1 1,158.2 1,109.8 1,193.6

EBT 587.4 409.2 631.9 713.9


EPS (EUR) 3.18 1.89 3.56 4.02

BVPS (EUR) 38.36 37.89 40.40 43.28

EV/share (EUR) 45.84 45.73

Div./share (EUR) 1.20 1.20 1.30 1.40

ROE 9.0% 5.0% 9.1% 9.6%

P/E (x) 12.7 18.9 10.0 8.9

P/BV(x) 1.1 0.9 0.9 0.8

Dividend Yield 3.0% 3.4% 3.7% 3.9%

3435363738394041424344

52 weeks

Vienna Insurance Group ATX


. Fundamental arguments:

VIG is the leading Austrian insurance group in Central and Eastern Europe, generating more than 50% of its premiums in CEE/SEE. We remain optimistic about VIG’s growth prospects in the region, especially with an improving economic situation.

As expected, 4Q13 will be a weak quarter. 2013 was a difficult year for VIG in P&C, extraordinary expenses in Romania and Italy weighed heavily. VIG recently announced its forecast of FY13 EBT, which shows that 4Q13 will also be affected by negative one-offs from the two countries. However, this was anticipated as we warned investors that 4Q13 would be weak. While we expect Romania to remain a difficult market (break-even should be possible in FY14), the issues in Italy should not be a significant burden in 2014.

We regard the current pressure on the stock as attractive buying opportunity and recommend investors to look at the very solid underlying profitability in FY13 and the expected strong improvements in FY14. VIG is currently trading below its 2013e book value and well below its embedded value (EUR 45.8). We still believe that the projected profitability growth beyond 2013 should warrant a premium above its book value.

Dividend increase announced. VIG’s management surprised the market with its proposal of a EUR 0.10 increase of the dividend to EUR 1.30. The payout ratio will rise substantially to compensate for the one-offs that burdened profitability in 2013. We view the increase of the dividend as a strong signal to market.



Expected underperformers in CEE and Turkey

1. Neuca (Poland, TMF PW) – Sell, target price: PLN 125.0

90100110120130140150160170

52 weeks

Neuca WIG



Slower growth in 2014. We expect a very low growth of the pharmaceuticals market in 2014 and Neuca is currently growing below the market place thus losing the market share. Neuca mentioned that it was considering investments in health care clinics segments, which in our opinion suggests lack of greater growth in pharmaceutical distribution market.

Margins to stabilize. In our view the development of own brands segments is likely to partly neutralize the negative effect of fall of fix margin on refund medicines, which we expect in 2014.

ACP Pharma acquisition stalled. The Company is still awaiting antimonopoly watchdog decision on acquisition of ACP Pharma, about which it informed in 2013, we think that concentration of the market may be an issue here.



2. Pelion (Poland, PGF PW) – Sell, target price: PLN 50.0

30405060708090

100110120

52 weeks

Pelion WIG



EPS growth in 2014 will be problematic. We expect a low growth of the pharmaceuticals market in 2014. In our view the results will be under the pressure of falling fixed margins on refunded drugs; Pelion will struggle to improve its EPS In 2014.

Weak balance sheet. The company has the weakest balance sheet among the pharmaceuticals distributors in Poland. We expect that the money from the IPO of its wholesale business will be spent mainly on the debt repayment, as no growth opportunities exist in the market in our view.



3. Sekerbank (Turkey, SKBNK TI) – Hold, target price: TRY 2.04

1.41.51.61.71.81.92.02.12.2

52 weeks

Sekerbank BIST 100



We think that 2014 will be a difficult year for Sekerbank as the bank stands out as the third most sensitive bank to rising interest rates due to its asset-liability structure.

The stock is trading at 0.9x of its 2014E book value with an expected ROE of 12% for 2014. Considering the prevailing interest rates and the interest rate trajectory, we think that there are major downside risks to our estimates and valuation.

Sekerbank’s share price outperformed the BIST-100 by 4.5% and 32% in y-t-d and three-month terms, respectively whereas the banking index underperformed the BIST-100 by 3% and 8%, respectively, in the same period.

Recently, the Board of Directors decided to raise its capital by 12.5% to TRY1,125mn via a rights issue. The bank had a total capital adequacy ratio of 13.4% and posted a ROE of 9% as of 9M13.



Highest upside potential

Current price (LC) Target price (LC) Recommendation Upside

Migros Ticaret AS 14.6 28.0 Buy 91.8%

Tekfen Holding 4.9 9.2 Buy 86.6%

Torunlar REIC 2.7 4.9 Buy 79.6%

Yapi Kredi Bank 3.3 5.6 Buy 70.8%

Celebi Ground Handling 12.1 20.5 Buy 70.1%

Halkbank 11.5 19.1 Buy 66.4%

Alarko Holding 4.7 7.4 Buy 57.2%

PGNIG 4.6 6.9 Buy 51.0%

Selcuk Ecza Deposu 1.8 2.7 Buy 48.9%

Emlak Konut REIT 2.2 3.2 Buy 48.8%

Romgaz 33.4 49.5 Buy 48.2%

Tofas 10.9 15.8 Buy 45.0%

Aselsan 7.9 11.1 Buy 41.2%

ACE 15.9 22.0 Buy 38.4%

Berling 7.3 10.0 Buy 37.0%

AB SA 33.7 45.0 Buy 33.5%

AT&S 8.2 10.9 Buy 33.2%

Raiffeisen Bank International 28.6 38.0 Buy 32.8%

Gorenje 4.2 5.5 Buy 31.6%

OMV 32.8 43.0 Buy 31.0%

Turkcell Iletisim Hizmetleri AS 11.1 14.5 Buy 30.7%

Kapsch TrafficCom 42.2 55.0 Buy 30.4%

Andritz 41.1 53.3 Buy 29.7%

Emperia Holding 70.0 90.0 Buy 28.6%

Pozbud 5.3 6.7 Buy 25.5%

Albalact 0.2 0.2 Buy 21.4%

Vienna Insurance Group 35.6 43.0 Buy 20.8%

PKO BP 40.4 48.1 Buy 19.1%

Aksigorta 2.9 3.4 Buy 19.0%

AD Plastik 122.4 145.0 Buy 18.5%

Immofinanz 3.6 4.0 Buy 12.7%



Changes in estimates Changes in

forecasts

2013e 2014e 2015e 2013e 2014e 2015e

Akcansa 0.72 0.83 0.90 0.87 0.94 1.06

Albalact 0.0165 0.0214 0.0172 0.0216 0.0291

Andritz 1.63 2.38 2.76 0.59 2.32 3.03

Arcelik 1.07 1.28 1.40 0.89 1.06 1.26

AT&S 0.75 0.51 1.17 0.77

Bank Pekao 10.57 11.96 14.43 10.29 11.79 14.27

Benefit Systems S.A. 14.06 15.42 19.18 12.07 15.46 20.42

Bioton 0.05 0.17 0.37 0.05 0.17 0.37

BZ WBK 17.15 20.29 27.61 19.34 24.83 28.97

CA IMMO 0.62 0.88 0.82 0.69 0.97 1.16

Cinema City 0.62 0.88 0.82 0.69 0.97 1.16

Emperia Holding 2.77 2.99 3.26 2.17 3.45 4.33

Eurocash 2.57 3.60 3.91 1.98 2.29 2.64

InterCars 9.08 11.22 14.01 15.75

Jeronimo Martins SGPS 0.71 0.83 0.96 0.61 0.71 0.85

Kapsch TrafficCom -0.62 2.23 2.26 0.74 0.75 2.47

Komercni banka 345.71 393.20 460.82 330.94 339.85 367.20

LEG Immobilien 2.65 3.11 2.96 2.65 3.35 3.27

Lenzing 3.62 2.88 4.08 1.49 2.50 3.88

Lotos Group 2.89 2.71 1.97 0.42 0.73 0.74

Magyar Telekom 17.80 12.16 11.56 20.22 13.85 12.22

mBank 28.74 31.92 38.38 28.35 32.40 38.00

MOL 2365.49 3036.55 3075.79 787.06 1766.10 1853.85

New World Resources -0.82 -0.40 -0.22 -2.12 -0.47 -0.26

Petrom 0.0745 0.0668 0.0671 0.0813 0.0800 0.0601Philip Morris CR 877.50 762.10 775.53 723.80 628.52 693.43

PKN Orlen 3.59 3.23 3.29 0.81 0.53 0.79

PKO BP 2.64 3.06 3.76 2.74 3.16 3.81Raiffeisen Bank International

RHI 3.25 2.78 2.97 1.71 2.34 2.52

SBO 3.60 4.56 5.11 3.58 4.42 5.11

Semperit 2.50 2.75 3.27 2.69 2.75 2.82

Tupras 4.28 3.84 5.61 5.86 4.46 5.37

Vienna Insurance Group 2.79 3.73 4.00 1.89 3.56 4.02Vienna Int. Airport 3.22 3.56 3.76 3.39 3.91 4.27

Wawel SA 48.17 55.51 61.36 54.00 67.24 75.39

Zumtobel 0.51 0.85 0.31 0.84

Previous

EPS (local currency)

Current

EPS (local currency)



Changes in ratings

Changes in Previous Current Date of recommendation change

Albalact Accumulate Buy 20.Dez.13

Andritz Hold Buy 27.Jän.14

Arcelik Hold Accumulate 10.Jän.14

Benefit Systems S.A. Buy Accumulate 04.Dez.13

BZ WBK Buy Accumulate 09.Dez.13

CA IMMO Accumulate Hold 23.Jän.14

Cinema City Accumulate Hold 14.Jän.14

Eurocash Under review Sell 13.Dez.13

Inter Cars Under review Sell 03.Dez.13

Komercni banka Accumulate Hold 09.Dez.13

Lenzing Accumulate Hold 13.Dez.13

Magyar Telekom Reduce Hold 10.Dez.13

mBank Hold Reduce 09.Dez.13

New World Resources Under review Sell 28.Jän.14

Otmuchow SA Accumulate Under review 15.Jän.14

PKO BP Accumulate Buy 09.Dez.13

Raiffeisen Bank International Accumulate Buy 27.Jän.14

RHI Accumulate Buy 19.Dez.13

Romgaz initiated with Buy 29.Jän.14

SBO Accumulate Hold 13.Dez.13

Tupras Hold Reduce 05.Dez.13

Valneva re-initiated with Accumulate 10.Jän.14

Vienna Insurance Group Accumulate Buy 10.Dez.13

Vienna Int. Airport Accumulate Hold 27.Jän.14

Wawel SA Accumulate Reduce 03.Dez.13



Changes in target prices

Changes in Previous Current Date of

target price (local currency) (local currency) change

Akcansa 10.4 12.7 28.Jan.14

Albalact 0.2 0.2 20.Dec.13

Andritz 42.0 53.3 27.Jan.14

Arcelik 12.1 14.3 10.Jan.14

AT&S 9.2 10.9 24.Jan.14

Bank Pekao 195.0 205.0 09.Dec.13

Benefit Systems S.A. 306.0 366.0 04.Dec.13

BZ WBK 379.0 448.0 09.Dec.13

CA IMMO 12.5 14.1 17.Dec.13

Cinema City 8.1 9.4 14.Jan.14

Emperia Holding 66.0 90.0 13.Dec.13

Eurocash under review 40.0 13.Dec.13

Inter Cars under review 180.0 03.Dec.13

Jeronimo Martins SGPS 18.0 17.0 13.Dec.13

Kapsch TrafficCom 59.9 55.0 10.Dec.13

Komercni banka 4700.0 4680.0 09.Dec.13

LEG Immobilien 50.6 50.0 06.Dec.13

Lenzing 63.5 45.5 13.Dec.13

Lotos Group 31.0 27.5 05.Dec.13

Magyar Telekom 285.0 300.0 10.Dec.13

mBank 434.0 477.0 09.Dec.13

MOL 18700.0 14500.0 05.Dec.13

New World Resources under review 0.4 28.Jan.14

Petrom 0.470 0.503 05.Dec.13

Philip Morris CR 10470.0 10200.0 05.Dec.13

PKN Orlen 43.3 35.0 05.Dec.13

PKO BP 42.0 48.1 09.Dec.13

Raiffeisen Bank International 26.8 38.0 27.Jan.14

RHI 28.5 26.0 19.Dec.13

Romgaz initiated with 49.5 29.Jan.14

SBO 85.8 85.3 16.Jan.14

Semperit 34.5 38.5 20.Dec.13

Tupras 52.5 42.0 05.Dec.13

Valneva re-initiated with 5.0 10.Jan.14

Vienna Int. Airport 51.0 65.0 27.Jan.14

Wawel SA 900.0 1250.0 03.Dec.13

Zumtobel 11.0 12.0 11.Dec.13 One month performance (in EUR terms)

Outperformer 1M YTD Underperformer 1M YTD

Zumtobel 44.9% 44.9% ZCh Police S.A. -29.6% -28.2%

Valneva 24.9% 21.6% New World Resources -25.4% -24.8%

PORR 22.7% 22.7% Bank Asya -24.7% -18.6%

Telekom Austria 17.1% 17.1% Tofas -22.8% -18.7%

Raiffeisen Bank International 16.6% 16.6% Kozal Altin Isletmeleri A.S. -21.9% -12.4%

AT&S 14.4% 14.4% ZA Pulawy S.A. -21.2% -19.6%

Mostostal Warszawa 13.5% 15.8% Petrokemija -21.0% -17.1%

ANY Security Printing Company 12.5% 17.5% Ford Otosan -20.8% -13.4%

Komercijalna Banka 11.7% 9.5% Bizim Toptan -19.3% -15.6%

Fortuna Entertainment Group 11.7% 12.4% Sinpas REIT -18.9% -15.9%



Top 20 dividend yield 2012 2013e 2014e

Turkcell Iletisim Hizmetleri AS 0.0% 17.8% 4.8%

Aygaz 5.4% 15.4% 7.8%

Transgaz 9.7% 14.8% 10.0%

Tupras 7.8% 12.5% 6.6%

Tekfen Holding 2.8% 12.3% 4.3%

Telefónica CR 9.6% 10.7% 10.1%

Turk Telekomunikasyon AS 10.1% 10.3% 10.8%

Vestel 4.5% 10.3% 9.5%

Albalact 7.5% 10.1% 12.4%

Tofas 9.3% 10.0% 8.6%

Ford Otosan 8.0% 9.7% 8.5%

T-Hrvatski Telekom 10.4% 9.6% 8.9%

Dogus Otomotiv 11.8% 9.4% 8.5%

KGHM 14.5% 9.1% 4.6%

Romgaz 9.0% 7.1%

Netia 0.0% 8.7% 9.0%

ANY Security Printing Company 12.1% 8.5% 8.9%

CEZ 5.9% 7.5% 6.0%

Sojaprotein AD 0.0% 7.1% 7.0%

Philip Morris CR 7.6% 7.0% 5.7%

Top 20 P/E Yapi Kredi Bank 11.6 3.4 5.6

Anadolu Cam 15.3 3.5 4.5

Torunlar REIC 4.7 3.8 3.5

Bank Asya 10.3 4.0 3.8

Aksigorta 13.5 4.3 8.5

Halkbank 8.3 4.4 5.0

Vakifbank 7.8 4.5 4.7

Sojaprotein AD 6.8 4.6 3.4

Aselsan 6.6 4.7 5.1

Albaraka Turk 7.8 4.7 5.1

Gubre Fabrikalari 6.1 4.8 5.6

Isbank 8.3 4.9 5.4

Alarko Holding 8.7 5.2 5.9

Tupras 8.7 5.2 8.2

Turkiye Sinai Kalkinma Bankasi 8.1 5.3 5.5

Dogus Otomotiv 7.3 5.3 5.9

Transgaz 7.8 5.4 5.6

Komercijalna Banka 5.5 5.5 4.8

Selcuk Ecza Deposu 8.8 5.7 6.2

Petrom 6.2 5.7 5.9



Top 20 by turnover

Average turnover (EUR)* Average volume (pieces)

Garanti Bank 172,463,517 73,955,957

Halkbank 115,241,634 25,183,489

Emlak Konut REIT 76,057,510 95,604,164

Isbank 65,979,066 41,199,888

Turkish Airlines 65,904,096 28,297,189

Akbank 54,453,929 24,054,883

Vakifbank 38,888,106 28,018,578

PKO BP 36,374,818 3,825,601

Yapi Kredi Bank 32,031,107 24,505,794

KGHM 22,983,481 834,349

PZU 19,261,351 180,995

Bank Pekao 17,864,550 411,400

Turkcell Iletisim Hizmetleri AS 17,537,159 4,554,052

OTP 15,301,513 1,085,853

Tupras 13,751,165 973,711

Petkim 12,704,218 13,442,265

Ipek Dogal Enerji Kaynaklari 11,855,024 9,406,166

Kozal Altin Isletmeleri A.S. 11,826,491 1,330,094

Jeronimo Martins SGPS 11,192,032 789,844

BIM 11,071,743 797,073 * Average turnover is based on 3M daily average volume multiplied with 3M average share price in EUR Source: for all charts& tables above Factset, Erste Group Research



Stock market performances – CEE in comparison (EUR terms) 1M 3M 6M 12M YTD

New Europe Blue Chip Index -1.9% -6.2% 4.8% -2.7% -1.9%

ATX (Austria) 1.4% -1.1% 10.6% 5.5% 1.4%

BELEX 15 (Serbia) 1.8% 7.3% 10.6% -2.7% 0.9%

BET (Romania) -1.9% 4.5% 16.0% 13.3% -2.1%

BUX (Hungary) -4.4% -6.5% -1.9% -8.9% -4.2%

CROBEX (Croatia) 1.1% 2.5% -3.9% -5.7% 0.1%

PX (Czech Republic) -0.1% -8.8% 1.4% -9.2% -0.3%

SBI TOP (Slovenia) 7.0% 11.5% 10.2% 9.2% 7.0%

WIG (Poland) -3.6% -8.1% 8.0% 6.6% -3.4%

WIG 20 (Poland) -4.6% -9.8% 1.2% -7.2% -4.4%

BIST 100 (Turkey) -11.2% -28.7% -29.5% -37.5% -10.2%

IRTS (Russia) -6.8% -10.2% -2.7% -18.4% -7.0%

MSCI Emerging Asia -2.1% -3.2% -0.5% -2.7% -2.5%

MSCI Emerging Europe -2.3% -7.5% -2.4% -7.8% -2.5%

MSCI Emerging Latin America -6.0% -9.2% -5.5% -14.9% -6.1%

MSCI Emerging World -2.9% -4.7% -1.1% -5.1% -3.2%

MSCI World Index -0.7% 2.3% 3.7% 16.2% -1.3%

DJ EURO STOXX Automobiles & Parts -0.2% 5.6% 14.7% 29.6% -0.3%

DJ EURO STOXX 50 -2.4% -0.4% 9.7% 10.8% -2.6%

DJ EURO STOXX Banks 3.9% 7.1% 29.4% 17.7% 3.9%

DJ EURO STOXX Basic Resources -3.0% 0.5% 17.7% 7.2% -3.1%

DJ EURO STOXX Chemicals -3.2% 2.0% 9.3% 10.2% -3.3%

DJ EURO STOXX Construction & Material 2.2% 3.5% 16.6% 25.1% 1.8%

DJ EURO STOXX Food & Beverage -5.6% -6.0% -5.8% -3.2% -5.9%

DJ EURO STOXX Health Care -2.1% -0.1% -1.6% 7.8% -2.8%

DJ EURO STOXX Industrial Goods & Services -2.5% 1.5% 12.6% 19.1% -2.6%

DJ EURO STOXX Insurance -2.9% 3.6% 12.3% 25.3% -3.1%

DJ EURO STOXX Media 0.9% 5.0% 15.0% 32.0% 0.4%

DJ EURO STOXX Oil & Gas -3.4% -7.7% 1.6% -1.0% -3.7%

DJ EURO STOXX Personal & Household Goods -5.8% -5.2% -2.6% 4.5% -6.0%

DJ EURO STOXX Retail -5.9% -7.0% 2.1% 10.3% -6.1%

DJ EURO STOXX Technology -4.7% 0.7% 10.8% 16.6% -4.6%

DJ EURO STOXX Telecommunications 1.4% -0.5% 21.6% 16.1% 1.2%

DJ EURO STOXX Travel & Leisure 3.3% 6.1% 8.6% 15.2% 3.1%DJ EURO STOXX Utilities 0.8% -0.2% 12.9% 11.3% 0.6%

S&P 500 -0.7% 3.3% 4.0% 19.5% -1.4%DAX -1.9% 4.0% 13.3% 20.0% -1.9%

1M 3M 6M 12M YTD

Currencies

RSD -1.0% -1.5% -1.8% -4.0% -

RON -1.1% -1.5% -2.1% -3.2% -

HUF -4.2% -4.1% -3.9% -5.5% -

HRK -0.6% -0.5% -2.1% -0.9% -

CZK -0.8% -6.7% -6.7% -7.4% -

UAH -1.2% -4.2% -6.3% -4.1% -

PLN -1.7% -0.8% 0.0% -1.5% -

TRY -3.0% -12.0% -18.9% -27.9% -

Indices in local currency

BELEX 15 (Serbia) 2.9% 9.0% 12.6% 1.1% 2.0%

BET (Romania) -1.0% 6.5% 19.1% 16.6% -1.0%

BUX (Hungary) -0.1% -1.5% 1.5% -4.4% -0.1%

CROBEX (Croatia) 1.5% 3.0% -1.9% -4.6% 0.7%

PX (Czech Republic) 0.5% -2.2% 8.5% -2.3% 0.5%

SBI TOP (Slovenia) 7.0% 11.5% 10.2% 9.2% 0.1%

WIG (Poland) -1.7% -6.8% 8.0% 7.5% -1.7%

WIG 20 (Poland) -2.7% -8.5% 1.2% -6.4% -2.7%

BIST 100 (Turkey) -7.8% -20.6% -15.7% -20.6% -7.5% Source: Factset



Sector performance (EUR terms) Sector* 1M 3M 6M 12M

Healthcare 2.6% 4.8% 20.9% 18.0%

Food & Beverage 2.7% 2.6% -3.0% -10.6%

Technology 3.5% 2.2% 27.4% 4.0%

Construction & Materials 1.9% 0.8% 10.9% 6.7%

Real Estate 3.2% -2.0% 4.7% 13.1%

Travel & Tourism 6.6% -2.1% 5.9% 26.8%

Industrial Goods & Services -1.6% -2.8% 5.5% -0.4%

Media -2.2% -5.0% 5.1% 6.1%

Telecom -0.6% -6.6% 0.0% -8.6%

Personal & Household Goods -5.6% -7.3% -8.2% -2.8%

Insurance -4.1% -7.5% -6.4% -2.8%

Erste Universe -2.9% -9.2% -2.0% -6.6%

Oil & Gas -5.6% -9.4% -8.5% -8.5%

Utilities -1.1% -10.1% 4.8% -11.2%

Retail & Distribution -8.8% -10.2% -11.8% -5.0%

Basic Resources -5.1% -10.3% 1.8% -21.8%

Banks -2.6% -12.8% -2.5% -9.4%

Chemicals -4.4% -13.4% -2.8% -12.0%

Automobiles & Parts -14.3% -23.8% -20.0% 3.4%

*based on Erste Group Research Coverage

Erste Coverage Universe Sector Automobiles & Parts

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

2,600

2,800

Jan-1

3

Feb

-13

Ma

r-1

3

Apr-

13

Ma

y-1

3

Jun-1

3

Jul-1

3

Aug-1

3

Sep-1

3

Oct-

13

No

v-1

3

De

c-1

3

Erste Coverage Universe

1,000

3,000

5,000

7,000

9,000

11,000

13,000

Ja

n-1

3

Fe

b-1

3

Ma

r-1

3

Ap

r-1

3

Ma

y-1

3

Ju

n-1

3

Ju

l-1

3

Au

g-1

3

Se

p-1

3

Oct-

13

No

v-1

3

De

c-1

3

Erste Sector Automobiles & Parts

Sector Banks Sector Basic Resources

900

1,900

2,900

3,900

4,900

5,900

6,900

7,900

Ja

n-1

3

Fe

b-1

3

Ma

r-1

3

Ap

r-1

3

Ma

y-1

3

Ju

n-1

3

Ju

l-1

3

Au

g-1

3

Se

p-1

3

Oct-

13

No

v-1

3

De

c-1

3

Erste Sector Banks

1,600

2,100

2,600

3,100

3,600

4,100

Ja

n-1

3

Fe

b-1

3

Ma

r-1

3

Ap

r-1

3

Ma

y-1

3

Ju

n-1

3

Ju

l-1

3

Au

g-1

3

Se

p-1

3

Oct-

13

No

v-1

3

De

c-1

3

Erste Sector Basic Resources



Sector Chemicals Sector Construction & Materials

0

200

400

600

800

1,000

1,200

1,400

1,600

Ja

n-1

3

Fe

b-1

3

Ma

r-1

3

Ap

r-1

3

Ma

y-1

3

Ju

n-1

3

Ju

l-1

3

Au

g-1

3

Se

p-1

3

Oct-

13

No

v-1

3

De

c-1

3

Erste Sector Chemicals

0

500

1,000

1,500

2,000

2,500

Ja

n-1

3

Fe

b-1

3

Ma

r-1

3

Ap

r-1

3

Ma

y-1

3

Ju

n-1

3

Ju

l-1

3

Au

g-1

3

Se

p-1

3

Oct-

13

No

v-1

3

De

c-1

3

Erste Sector Construction & Materials

Sector Food & Beverages Sector Health Care

1,400

1,500

1,600

1,700

1,800

1,900

2,000

Ja

n-1

3

Fe

b-1

3

Ma

r-1

3

Ap

r-1

3

Ma

y-1

3

Ju

n-1

3

Ju

l-1

3

Au

g-1

3

Se

p-1

3

Oct-

13

No

v-1

3

De

c-1

3

Erste Sector Food & Beverages

700

800

900

1,000

1,100

1,200

1,300

Jan-1

3

Feb-1

3

Mar-

13

Apr-

13

May-1

3

Jun-1

3

Jul-13

Aug-1

3

Sep-1

3

Oct-

13

Nov-1

3

Dec-1

3

Erste Sector Healthcare

Sector Industrial Goods & Services Sector Insurance

900

5,900

10,900

15,900

20,900

25,900

Ja

n-1

3

Fe

b-1

3

Ma

r-1

3

Ap

r-1

3

Ma

y-1

3

Ju

n-1

3

Ju

l-1

3

Au

g-1

3

Se

p-1

3

Oct-

13

No

v-1

3

De

c-1

3

Erste Sector Industrial Goods & Services

100

200

300

400

500

600

700

Jan-1

3

Feb-1

3

Mar-

13

Apr-

13

May-1

3

Jun-1

3

Jul-13

Aug-1

3

Sep-1

3

Oct-

13

Nov-1

3

Dec-1

3

Erste Sector Insurance

Sector Media Sector Oil & Gas

500

700

900

1,100

1,300

1,500

1,700

Jan-1

3

Feb-1

3

Mar-

13

Apr-

13

May-1

3

Jun-1

3

Jul-13

Aug-1

3

Sep-1

3

Oct-

13

Nov-1

3

Dec-1

3

Erste Sector Media

1,300

1,500

1,700

1,900

2,100

2,300

2,500

2,700

2,900

3,100

3,300

Ja

n-1

3

Fe

b-1

3

Ma

r-1

3

Ap

r-1

3

Ma

y-1

3

Ju

n-1

3

Ju

l-1

3

Au

g-1

3

Se

p-1

3

Oct-

13

No

v-1

3

De

c-1

3

Erste Sector Oil & Gas



Sector Personal & Household Goods Sector Real Estate

0

500

1,000

1,500

2,000

2,500

3,000

Jan-1

3

Feb-1

3

Mar-

13

Apr-

13

May-1

3

Jun-1

3

Jul-13

Aug-1

3

Sep-1

3

Oct-

13

Nov-1

3

Dec-1

3

Erste Sector Personal & Household Goods

400

450

500

550

600

650

Ja

n-1

3

Fe

b-1

3

Ma

r-1

3

Ap

r-1

3

Ma

y-1

3

Ju

n-1

3

Ju

l-1

3

Au

g-1

3

Se

p-1

3

Oct-

13

No

v-1

3

De

c-1

3

Erste Sector Real Estate

Sector Retail & Distribution Sector Technology

22,000

27,000

32,000

37,000

42,000

47,000

52,000

Jan-1

3

Feb-1

3

Mar-

13

Apr-

13

May-1

3

Jun-1

3

Jul-13

Aug-1

3

Sep-1

3

Oct-

13

Nov-1

3

Dec-1

3

Erste Sector Retail & Distribution

1,200

1,400

1,600

1,800

2,000

2,200

2,400

2,600

Jan-1

3

Feb-1

3

Mar-

13

Apr-

13

May-1

3

Jun-1

3

Jul-13

Aug-1

3

Sep-1

3

Oct-

13

Nov-1

3

Dec-1

3

Erste Sector Technology

Sector Telecom Sector Travel & Tourism

800

900

1,000

1,100

1,200

1,300

1,400

Ja

n-1

3

Fe

b-1

3

Ma

r-1

3

Ap

r-1

3

Ma

y-1

3

Ju

n-1

3

Ju

l-1

3

Au

g-1

3

Se

p-1

3

Oct-

13

No

v-1

3

De

c-1

3

Erste Sector Telecom

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Jan-1

3

Feb-1

3

Mar-

13

Apr-

13

May-1

3

Jun-1

3

Jul-13

Aug-1

3

Sep-1

3

Oct-

13

Nov-1

3

Dec-1

3

Erste Sector Travel & Tourism

Sector Utilities

3,500

3,700

3,900

4,100

4,300

4,500

4,700

4,900

Ja

n-1

3

Fe

b-1

3

Ma

r-1

3

Ap

r-1

3

Ma

y-1

3

Ju

n-1

3

Ju

l-1

3

Au

g-1

3

Se

p-1

3

Oct-

13

No

v-1

3

De

c-1

3

Erste Sector Utilities

Source: Factset, Erste Group Research Based on Erste Group Research Sector Aggregates. Prices for aggregates are based on d/d performance for each individual stock within the respective aggregate, which are then weighted by market capitalization to form a weighted average. For composition of aggregate see sector part of this report.



Looking Ahead Date Company/country Release/event

4-Feb ams / Austria FY13 results

Turk Telekom / Turkey 4Q13 results

Dogus Oto/Turkey FY13 results

6-Feb BRE Bank / Poland FY13 preliminary results

PGE / Poland EGM

mBank / Poland 4Q13 results

10-Feb Bank Handlowy / Poland 4Q13 results

11-Feb voestalpine / Austria 3Q FY13/14 results

12-Feb Komercni banka / Czech Republic FY13 results

Orange Polska / Poland FY13 results

ING Bank Slaski / Poland 4Q13 results

Banca Transilvania / Romania FY13 results

BRD - GSG / Romania FY13 results

13-Feb Vienna Int. Airport / Austria Traffic results January 2014

DO&CO / Austria 3Q FY13/14 results

NWR / Czech Republic 4Q13 results

Fondul Proprietatea / Romania FY13 results

TVN / Poland FY13 results

14-Feb LPP / Poland 4Q13 results

T-Hrvatski Telekom / Croatia 4Q13 results

Biofarm / Romania FY13 results

Antibiotice / Romania FY13 results

17-Feb Palfinger / Austria FY13 results

STRABAG / Austria prelim FY13 results

Transelectrica / Romania FY13 results

Transgaz / Romania FY13 results

Akcansa/Turkey FY13 results

19-Feb OMV Petrom / Romania FY13 results preliminary

Turkcell / Turkey 4Q13 results

OMV Petrom / Romania FY13 results preliminary

20-Feb CCC / Poland 4Q13 results

Netia / Poland 4Q13 results

24-Feb Atlantic Grupa / Croatia unaudited 2013 results

25-Feb RHI / Austria prelim. FY13 results

Vienna Int. Airport / Austria prelim. FY13 results

MOL / Hungary 4Q2013 results

26-Feb KTC / Austria 3Q14 (Dec) results

Telekom Austria FY13 results

Telefónica CR / Czech Republic 4Q13 results

27-Feb Valneva / Austria prelim. 4Q13 results

Wienerberger / Austria FY13 results

Krka / Slovenia unaudited 2013 results

Eurocash / Poland 4Q13 results

Magyar Telekom / Hungary 4Q2013 results

Telekom Slovenije / Slovenia 4Q2013 results

28-Feb AMAG / Austria FY13 results

Erste Group / Austria FY13 preliminary results

Magyar Telekom / Hungary FY13 results

ANY / Hungary 4Q2013 results

Dt. Annington FY13 results

UNIQA / Austria prelim. FY13 results

CEZ / Czech Republic FY13 results

AB / Poland 4Q13 results

ACE / Poland 4Q13 results

Intercars / Poland 4Q13 results

Comarch / Poland 4Q13 results

KGHM / Poland 4Q13 results

Stalprodukt / Poland 4Q13 results



Date Company/country Release/event 3-Mar PKO BP / Poland FY13 results

Agora / Poland 4Q13 results

Emperia / Poland 4Q13 results

4-Mar Zumtobel / Austria 3Q FY13/14 results

5-Mar Verbund / Austria FY13 results

PGNiG / Poland FY13 results

Lotos FY13 results

6-Mar Alior Bank / Poland FY13 results

7-Mar OTP / Hungary 4Q2013 results

10-Mar SBO / Austria FY13 results

Energa / Poland FY13 results

PKO BP / Poland FY 13 results

11-Mar Bank Pekao / Poland FY 13 results

12-Mar Palfinger / Austria AGM

PGE / Poland FY13 results

PZU / Poland FY13 results

13-Mar Vienna Int. Airport / Austria Traffic results February 2014

Austrian Post / Austria FY 13 results

FHB / Hungary 4Q2013 results

JSW / Poland FY 13 results

14-Mar Gorenje / Slovenia unaudited 2013 results

Palfinger / Austria Div ex day

Amrest / Poland FY13 results

15-Mar Tauron / Poland FY13 results



Erste Group´s CEE Universe Mcap.

(EURmn)

Free float

(EUR mn)

Mcap.

(EURmn)

Free float

(EUR mn)

Mcap.

(EURmn)

Free float

(EUR mn)

PL PKO BP 11,940 6,772 A OMV 10,704 4,688 HR INA 4,418 161

Bank Pekao 11,356 5,667 Raiffeisen Bank International 8,382 3,403 T-Hrvatski Telekom 1,817 699

BZ WBK 8,493 2,549 voestalpine 5,650 3,605 Ledo 356 159

PZU 8,473 5,491 Verbund 5,552 866 Atlantic Grupa 324 87

PGE 7,126 2,716 Vienna Insurance Group 4,556 1,321 Ericsson Nikola Tesla 261 109

PGNIG 6,375 1,759 Andritz 4,241 2,926 Koncar Elektroindustrija 234 110

KGHM 5,154 3,515 Immofinanz 3,711 3,168 Podravka 196 138

mBank 5,005 1,519 Uniqa 2,864 198 Atlantska plovidba 70 55

PKN Orlen 3,903 2,830 Telekom Austria 2,851 1,303 AD Plastik 67 40

LPP 3,788 1,886 STRABAG 2,289 298 Petrokemija 61 30

TPSA 3,235 1,579 Austrian Post 2,281 1,072 TR Garanti Bank 8,447 4,212

Tauron Polska Energia 1,740 1,036 Mayr-Melnhof 1,816 745 Turkcell Iletisim Hizmetleri AS8,004 2,777

Kulczyk Oil Ventures 1,615 821 Wienerberger 1,381 1,174 Akbank 7,821 3,230

Cyfrowy Polsat 1,594 332 SBO 1,249 799 Turk Telekomunikasyon AS 6,683 835

Synthos 1,577 592 Vienna Int. Airport 1,247 623 Isbank 6,156 1,980

ENEA 1,344 402 Lenzing 1,205 330 Halkbank 4,696 2,301

Eurocash 1,305 731 AMS 1,198 881 Yapi Kredi Bank 4,635 844

JSW S.A. 1,283 575 CA IMMO 1,138 933 BIM 3,875 2,629

TVN 1,234 537 Palfinger 1,123 400 Turkish Airlines 3,160 1,608

Lotos Group 1,104 516 RHI 968 584 Tupras 3,037 1,488

CCC (prev. NG2) 1,062 609 AMAG 811 158 Vakifbank 2,887 728

Bogdanka SA 997 997 conwert 790 562 Arcelik 2,483 621

Asseco Poland 903 657 Semperit 775 277 Ford Otosan 2,262 405

Inter Cars 670 402 Kapsch TrafficCom 548 209 TAV Havalimanlari Holding 2,050 831

ZA Pulawy S.A. 632 216 PORR 365 42 Tofas 1,788 434

Kety 472 472 S Immo 361 289 Emlak Konut REIT 1,763 441

AmRest 450 302 DO & CO 361 170 Sisecam 1,235 383

Wawel SA 445 213 AT&S 318 210 Migros Ticaret AS 853 166

Netia 441 234 Polytec 161 92 Petkim 840 252

Ciech S.A. 384 235 SLO Krka 2,161 1,467 Aygaz 770 189

GTC 379 205 Telekom Slovenije 861 222 Turkiye Sinai Kalkinma Bankasi717 292

Apator 344 251 Gorenje 76 41 Akcansa 713 147

Farmacol 322 159 CZ CEZ 9,810 2,952 Sekerbank 659 213

Stalprodukt S.A. 315 88 Komercni banka 6,006 2,381 Aselsan 607 93

ZCh Police S.A. 307 97 Telefónica CR 3,438 935 Tekfen Holding 598 226

Pelion 251 190 Philip Morris CR 1,080 242 Cimsa 505 162

Emperia Holding 250 175 Unipetrol 1,040 385 Trakya Cam 491 138

Action SA 190 112 CME 489 233 Dogus Otomotiv 475 164

Benefit Systems S.A. 185 74 Fortuna Entertainment Group 251 82 Torunlar REIC 443 62

Neuca 178 78 Pegas NW 201 138 Albaraka Turk 419 96

ComArch 166 94 Orco 189 88 Teknosa 419 42

AB SA 128 95 New World Resources 171 62 Anadolu Hayat 407 69

Agora 119 71 RO Petrom 5,937 558 Selcuk Ecza Deposu 363 73

ACE 80 71 Romgaz 2,653 398 Gubre Fabrikalari 353 120

Bioton 77 59 BRD Groupe SG 1,382 876 Bank Asya 348 186

Vistula Group 74 59 Banca Transilvania 817 581 Alarko Holding 345 90

Sygnity 56 41 Transgaz 476 55 Aksigorta 290 81

Pozbud 43 13 Transelectrica 243 68 Is REIT 262 109

Berling 30 9 Antibiotice 77 29 Bizim Toptan 262 105

Otmuchow SA 28 14 Biofarm 66 37 Park Elektrik 237 76

Mostostal Warszawa 25 12 Albalact 23 7 Anadolu Cam 231 46

HU MOL 4,610 1,411 NL Cinema City 418 193 Vestel 191 52

OTP 3,809 3,101 PT Jeronimo Martins SGPS 8,008 3,115 Turcas Petrol AS 170 51

Richter Gedeon 2,784 2,063 DE Dt. Annington 4,274 667 Sinpas REIT 136 50

Magyar Telekom 1,021 415 LEG Immobilien 2,364 1,495 Zorlu Enerji 105 34

FHB 139 45 RS Komercijalna Banka 245 58 Celebi Ground Handling 96 22

ANY Security Printing Company 32 16 Aik Banka AD 146 91 KilerAlisveris 61 9

PannErgy 20 13 Sojaprotein AD 80 30



Notes



Contacts Group Research Head of Group Research Friedrich Mostböck, CEFA +43 (0)5 0100 11902 Major Markets & Credit Research Head: Gudrun Egger, CEFA +43 (0)5 0100 11909 Ralf Burchert (Agency Analyst) +43 (0)5 0100 16314 Hans Engel (Senior Analyst International Equities) +43 (0)5 0100 19835 Christian Enger, CFA (Covered Bonds) +43 (0)5 0100 84052 Margarita Grushanina (Economist AT, CHF) +43 (0)5 0100 11957 Mildred Hager-Germain (Senior Economist, Euro, US) +43 (0)5 0100 17331 Alihan Karadagoglu (Senior Analyst Corporate Bonds) +43 (0)5 0100 19633 Peter Kaufmann (Corporate Bonds) +43 (0)5 0100 11183 Stephan Lingnau (International Equities) +43 (0)5 0100 16574 Elena Statelov, CIIA (Corporate Bonds) +43 (0)5 0100 19641 Gerald Walek, CFA (Economist Euro) +43 (0)5 0100 16360 Katharina Böhm-Klamt (Student Analyst Euro) +43 (0)5 0100 19632 Lisa-Maria Sommer (Student Analyst Euro) +43 (0)5 0100 19632 Macro/Fixed Income Research CEE Head CEE: Juraj Kotian (Macro/FI) +43 (0)5 0100 17357 Zoltan Arokszallasi (Fixed income) +43 (0)5 0100 18781 CEE Equity Research Head: Henning Eßkuchen +43 (0)5 0100 19634 Chief Analyst: Günther Artner, CFA (CEE Equities) +43 (0)5 0100 11523 Johannes Dietrich +43 (0)5 0100 11913 Günter Hohberger (Banks) +43 (0)5 0100 17354 Franz Hörl, CFA (Basic Resources) +43 (0)5 0100 18506 Daniel Lion, CIIA (Technology, Ind. Goods&Services) +43 (0)5 0100 17420 Thomas Unger, CFA (Insurance, Miscellaneous) +43 (0)5 0100 17344 Vera Sutedja, CFA (Telecom) +43 (0)5 0100 11905 Vladimira Urbankova, MBA (Pharma) +43 (0)5 0100 17343 Martina Valenta, MBA (Real Estate) +43 (0)5 0100 11913 Editor Research CEE Brett Aarons +420 956 711 014 Deniz Gurgen +90 212 371 2538 Research Croatia/Serbia Head: Mladen Dodig (Equity) +381 11 22 09178 Head: Alen Kovac (Fixed income) +385 72 37 1383 Anto Augustinovic (Equity) +385 72 37 2833 Ivana Rogic (Fixed income) +385 72 37 2419 Davor Spoljar, CFA (Equity) +385 72 37 2825 Research Czech Republic Head: David Navratil (Fixed income) +420 224 995 439 Petr Bittner (Fixed income) +420 224 995 172 Head: Petr Bartek (Equity) +420 224 995 227 Vaclav Kminek (Media) +420 224 995 289 Katarzyna Rzentarzewska (Fixed income) +420 224 995 232 Martin Krajhanzl (Equity) +420 224 995 434 Lubos Mokras (Fixed income) +420 224 995 456 Jan Sedina (Fixed income) +420 224 995 391 Research Hungary Head: József Miró (Equity) +361 235 5131 Gergely Gabler (Fixed Income) +361 373 2830 András Nagy (Equity) +361 235 5132 Orsolya Nyeste (Fixed income) +361 373 2026 Tamás Pletser, CFA (Oil&Gas) +361 235 5135 Research Poland

Head: Magdalena Komaracka, CFA (Equity) +48 22 330 6256 Marek Czachor (Equity) +48 22 330 6254 Tomasz Duda (Equity) +48 22 330 6253 Adam Rzepecki (Equity) +48 22 330 6252 Research Romania Head: Mihai Caruntu (Equity) +40 3735 10427 Head: Dumitru Dulgheru (Fixed income) +40 3735 10433 Chief Analyst: Eugen Sinca (Fixed income) +40 3735 10435 Dorina Cobiscan (Fixed Income) +40 3735 10436 Raluca Ungureanu (Equity) +40 3735 10428 Marina Alexandra Spataru (Equity) +40 3735 10429 Research Slovakia Head: Maria Valachyova (Fixed income) +421 2 4862 4185 Martin Balaz (Fixed income) +421 2 4862 4762 Research Turkey Head: Can Yurtcan +90 212 371 2540 Evrim Dairecioglu (Equity) +90 212 371 2535 M. Görkem Göker (Equity) +90 212 371 2534

Sezai Saklaroglu (Equity) +90 212 371 2533 Nilufer Sezgin (Fixed income) +90 212 371 2536 Ilknur Unsal (Equity) +90 212 371 2531

Group Institutional & Retail Sales Institutional Equity Sales Core Markets Head: Brigitte Zeitlberger-Schmid +43 (0)5 0100 83123 Cash Equity Sales Hind Al Jassani +43 (0)5 0100 83111 Werner Fuerst +43 (0)5 0100 83121 Josef Kerekes +43 (0)5 0100 83125 Cormac Lyden, CFA +43 (0)5 0100 83127 Stefan Raidl +43 (0)5 0100 83113 Simone Rentschler +49 711 810 400 5590 Derivative Sales Christian Luig +43 (0)5 0100 83181 Sabine Kircher +43 (0)5 0100 83161 Christian Klikovich +43 (0)5 0100 83162 Armin Pfingstl +43 (0)5 0100 83171 Roman Rafeiner +43 (0)5 0100 83172 Institutional Equity Sales London Declan Wooloughan +44 20 7623 4154 Institutional Equity Sales Croatia Damir Eror (Equity) +385 72 37 28 36 Zeljka Kajkut (Equity) +385 72 37 28 11 Institutional Sales Czech Republic Head: Michal Rizek +420 224 995 537 Pavel Krabicka (Equity) +420 224 995 411 Jiri Feres (Equity) +420 224 995 554 Jiri Smehlik (Equity) +420 224 995 510 Institutional Sales Hungary Gregor Glatzer (Equity) +361 235 5144 Attila Holló (Fixed Income) +361 235-5846 Levente Nándori (Equity) +361 235 5141 Attila Preisz (Equity) +361 235 5140 Norbert Siklósi (Fixed Income) +361 235 5842 Balázs Zánkay (Equity) +361 235 5156 Institutional Equity Sales Poland

Pawel Czuprynski (Equity) +4822 330 6212 Jacek Krysinski (Equity) +4822 330 6218 Lukasz Mitan (Equity) +4822 538 6265 Przemyslaw Nowosad (Equity) +4822 538 6266 Emil Onyszczuk (Equity) +4822 330 6214 Grzegorz Stepien (Equity) +4822 330 6211 Institutional Equity Sales Turkey Simin Öz Gerards (Head) +9 0212 371 2525 Murat Guneren (Equity) +9 0212 371 2521 Varol Guzel (Equity) +9 0212 371 2523 Mine Yoruk (Equity) +9 0212 371 2526 Ebru Doganay Percin (Equity) +9 0212 371 2522 Institutional Equity Sales Slovakia Head: Dusan Svitek +48 62 56 20 Andrea Slesarova (Client sales) +48 62 56 27 Saving Banks & Sales Retail Head: Thomas Schaufler +43 (0)5 0100 84225 Equity Retail Sales Head: Kurt Gerhold +43 (0)5 0100 84232 Fixed Income & Certificate Sales

Head: Uwe Kolar +43 (0)5 0100 83214 Treasury Domestic Sales Head: Markus Kaller +43 (0)5 0100 84239 Corporate Sales AT Martina Kranzl +43 (0)5 0100 84147 Karin Rattay +43 (0)5 0100 84112 Markus Pistracher +43 (0)5 0100 84152 Günther Gneiss +43 (0)5 0100 84145 Jürgen Flassak, MA +43 (0)5 0100 84141 Antonius Burger-Scheidlin, MBA +43 (0)5 0100 84624 Fixed Income Institutional Desk Head G7: Thomas Almen +43 (0)5 0100 84323 Head Germany: Ingo Lusch +43 (0)5 0100 84111 Fixed Income International & High End Sales Vienna Jaromir Malak/ Zach Carvell +43 (0)5 100 84254 U. Inhofner/ P. Zagan/ C. Mitu +43 (0)5 100 84254 Central Bank and International Sales Daniel Kihak Na +852 2105 0392



Important Disclosures

THIS DOCUMENT MAY NOT BE TAKEN, TRANSMITTED OR DISTRIBUTED INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR TO ANY U.S. PERSON OR TO ANY INDIVIDUAL OUTSIDE CANADA, AUSTRALIA OR JAPAN WHO IS A RESIDENT OF THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR TO THE PRESS IN THESE COUNTRIES

General disclosures

All recommendations given by Erste Group Research are independent and based on the latest company, industry and general information publicly available. The best possible care and integrity is used to avoid errors and/or misstatements. No influence on the rating and/or target price is being exerted by either the covered company or other internal Erste Group departments. Each research piece is reviewed by a senior research executive or agreed with a senior analyst/deputy (4-eyed principle). Erste Group Compliance Rules state that no analyst is allowed to hold a direct ownership position in securities issued by the covered company or derivatives thereof. Analysts are not allowed to involve themselves in any paid activities with the covered companies except as disclosed otherwise. No part of their compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or views expressed by them contained in this document. Erste Group may engage in transactions with financial instruments, on a proprietary basis or otherwise, in a manner inconsistent with the view taken in this research report. In addition, others within Erste Group, including strategists and sales staff, may take a view that is inconsistent with that taken in this research report.

Disclosure Checklist

Company ISIN Disclosure



Company ISIN Disclosure Company ISIN Disclosure

AB SA PLAB00000019 Krka SI0031102120

ACE LU0299378421 Kulczyk Oil Ventures CA5012401058 5Action SA PLACTIN00018 Ledo HRLEDORA0003 2, 3AD Plastik HRADPLRA0006 2 LEG Immobilien DE000LEG1110 5Adris Grupa HRADRSPA0009 Lenzing AT0000644505 2, 3Agora PLAGORA00067 Lotos Group PLLOTOS00025

Aik Banka AD RSAIKBE79302 6 LPP PLLPP0000011

Akbank TRAAKBNK91N6 Magyar Telekom HU0000073507

Akcansa TRAAKCNS91F3 Mayr-Melnhof AT0000938204 2Akenerji Elektrik TRAAKENR9119 mBank PLBRE0000012

Akfen Holding TREAKFH00010 Migros Ticaret AS TREMGTI00012

Aksigorta TRAAKGRT91O5 MOL HU0000068952

Alarko Holding TRAALARK91Q0 Mostostal Warszawa PLMSTWS00019

Albalact ROALBZACNOR0 Netia PLNETIA00014

Albaraka Turk TREALBK00011 Neuca PLTRFRM00018

AMAG AT00000AMAG3 2 New World Resources GB00B42CTW68 2, 5AmRest NL0000474351 OMV AT0000743059 2AMS AT0000920863 Orco LU0122624777 2, 3Anadolu Cam TRAANACM91F7 Otmuchow SA PLZPCOT00018

Anadolu Hayat TRAANHYT91O3 OTP HU0000061726

Anadolu Sigorta TRAANSGR91O1 Palfinger AT0000758305 2Andritz AT0000730007 2, 5 PannErgy HU0000089867 6Antibiotice ROATBIACNOR9 Park Elektrik TRAPRKTE91B5

ANY Security Printing Company HU0000093257 6 Pegas NW LU0275164910 2Apator PLAPATR00018 Pelion PLMEDCS00015

Arcelik TRAARCLK91H5 Petkim TRAPETKM91E0

Aselsan TRAASELS91H2 Petrokemija HRPTKMRA0005

Asseco Poland PLSOFTB00016 Petrom ROSNPPACNOR9

Astarta Holding NV NL0000686509 PGE PLPGER000010

AT&S AT0000969985 5 PGNIG PLPGNIG00014

Atlantic Grupa HRATGRRA0003 2 Philip Morris CR CS0008418869 2, 3Atlantska plovidba HRATPLRA0008 PKN Orlen PLPKN0000018

Austrian Post AT0000APOST4 2 PKO BP PLPKO0000016

Aygaz TRAAYGAZ91E0 Podravka HRPODRRA0004 3Bagfas TRABAGFS91E2 Polytec AT0000A00XX9 2Banca Transilvania ROTLVAACNOR1 PORR AT0000609607 5Bank Asya TREAYKB00014 Pozbud PLPZBDT00013

Bank Pekao PLPEKAO00016 PZU PLPZU0000011 3Benefit Systems S.A. PLBNFTS00018 Raiffeisen Bank International AT0000606306 2, 5Berling PLBRLNG00015 5 RHI AT0000676903 2, 3BIM TREBIMM00018 Richter Gedeon HU0000067624

Biofarm ROBIOFACNOR9 Romgaz ROSNGNACNOR3 5Bioton PLBIOTN00029 RUSSIA

Bizim Toptan TREBZMT00017 S Immo AT0000652250 1, 2, 3, 5Bogdanka SA PLLWGD00016 Sabanci Holding TRASAHOL91Q5

BRD Groupe SG ROBRDBACNOR2 SBO AT0000946652 2BZ WBK PLBZ00000044 Sekerbank TRASKBNK91N8

CA IMMO AT0000641352 2 Selcuk Ecza Deposu TRESLEC00014

CCC (prev. NG2) PLCCC0000016 Semperit AT0000785555 2, 5Celebi Ground Handling TRACLEBI91M5 SIF 1 Banat Crisana ROSIFAACNOR2

CEZ CZ0005112300 2, 3, 5 SIF 2 Moldova ROSIFBACNOR0

Ciech S.A. PLCIECH00018 SIF 3 Transilvania ROSIFCACNOR8

Cimsa TRACIMSA91F9 SIF 4 Muntenia ROSIFDACNOR6

Cinema City NL0000687309 SIF 5 Oltenia ROSIFEACNOR4 1CIS Sinpas REIT TRESNGY00019

CME BMG200452024 2, 5 Sisecam TRASISEW91Q3

ComArch PLCOMAR00012 Sojaprotein AD RSSOJAE21837 6conwert AT0000697750 2 Stalprodukt S.A. PLSTLPD00017

Cyfrowy Polsat PLCFRPT00013 STRABAG AT000000STR1 2, 3, 5DO & CO AT0000818802 2 Sygnity PLCMPLD00016

Dogus Otomotiv TREDOTO00013 Synthos PLDWORY00019

Dt. Annington DE000A1ML7J1 5 T-Hrvatski Telekom HRHT00RA0005

Emlak Konut REIT TREEGYO00017 Tauron Polska Energia PLTAURN00011

Emperia Holding PLELDRD00017 TAV Havalimanlari Holding TRETAVH00018

ENEA PLENEA000013 Tekfen Holding TRETKHO00012

Ericsson Nikola Tesla HRERNTRA0000 Teknosa TRETKNO00010

Eurocash PLEURCH00011 Telefónica CR CZ0009093209 2, 3Farmacol PLFRMCL00066 Telekom Austria AT0000720008 2, 5FHB HU0000078175 6 Telekom Slovenije SI0031104290

Fondul Proprietatea ROFPTAACNOR5 2 Tofas TRATOASO91H3

Ford Otosan TRAOTOSN91H6 Torunlar REIC TRETGRY00018

Fortuna Entertainment Group NL0009604859 2, 3 TPSA PLTLKPL00017

FX Energy US3026951018 Trakya Cam TRATRKCM91F7

Garanti Bank TRAGARAN91N1 Transelectrica ROTSELACNOR9 3, 5Gorenje SI0031104076 Transgaz ROTGNTACNOR8

GTC PLGTC0000037 Tupras TRATUPRS91E8

Gubre Fabrikalari TRAGUBRF91E2 Turcas Petrol AS TRATRCAS92E6

Halkbank TRETHAL00019 Turk Telekomunikasyon AS TRETTLK00013

Immofinanz AT0000809058 2 Turkcell Iletisim Hizmetleri AS TRATCELL91M1

INA HRINA0RA0007 Turkish Airlines TRATHYAO91M5

Inter Cars PLINTCS00010 Turkiye Sinai Kalkinma Bankasi TRATSKBW91N0

Ipek Dogal Enerji Kaynaklari TRAIPMAT92D2 TVN PLTVN0000017

Is REIT TRAISGYO91Q3 Unipetrol CZ0009091500 2, 3Isbank TRAISCTR91N2 Uniqa AT0000821103 2Jeronimo Martins SGPS PTJMT0AE0001 Vakifbank TREVKFB00019

JSW S.A. PLJSW0000015 Valneva FR0004056851 2Kapsch TrafficCom AT000KAPSCH9 2, 3 Verbund AT0000746409 2, 3, 5Kernel Holding LU0327357389 Vestel TREVEST00017

Kety PLKETY000011 Vienna Insurance Group AT0000908504 2, 3, 5KGHM PLKGHM000017 Vienna Int. Airport AT0000911805 2KilerAlisveris TREKLER00019 Vistula Group PLVSTLA00011 5Koc Holding TRAKCHOL91Q8 voestalpine AT0000937503 2, 3, 5Komercijalna Banka RSKOBBE33594 6 Wawel SA PLWAWEL00013

Komercni banka CZ0008019106 2, 3 Wienerberger AT0000831706 2, 3, 5Koncar D&ST HRKODTRA0007 Yapi Kredi Bank TRAYKBNK91N6

Koncar Elektroindustrija HRKOEIRA0009 ZA Pulawy S.A. PLZAPUL00057

Koza Anadolu Metal Madencilik TREKOZA00014 ZCh Police S.A. PLZCPLC00036

Kozal Altin Isletmeleri A.S. TREKOAL00014 Zorlu Enerji TRAZOREN91L8

Zumtobel AT0000837307 2



Disclosures of potential conflicts of interest relating to Erste Group AG, its affiliates, subsidiaries (together “Erste Group AG”) and its relevant employees with respect to the issuers, financial instruments and/or securities forming the subject of this document are valid as of the end of the month prior to publication of this document. Updating this information may take up to ten days after month end.

Description of specific disclosures

(1) Erste Group AG and/or its affiliates hold(s) an investment in any class of common equity of the covered company of 5% or more (for Croatian companies 1%). The covered company holds an investment in any class of common equity of Erste Group AG and/or its affiliates of 5% or more (for Croatian companies 1%).

(2) Erste Group AG and/or its affiliates act(s) as market maker or liquidity provider for securities issued by the covered company. (3) Erste Group AG and/or its affiliates have an agreement with the covered company relating to the provision of investment banking services or have

received compensation during the past 12 months. (4) Erste Group AG and/or its affiliates has/have concluded an agreement with the covered company on the provision of analyses. (5) Erste Group AG and/or its affiliates managed or co-managed an issue of financial instruments/ securities for the company during the last 12 months. (6) A draft of this report has been previously disclosed to the issuer (for fact checking purposes) and changes were made to the report prior its

dissemination. (7) The research analyst/s or an individual who assists in the preparation of this report) has/have a direct ownership position in securities issued by this

company or derivatives thereof.

Erste Group rating definitions

Buy

Accumulate

Hold

Reduce

Sell

> +20% to target price

+10% < target price < +20%

0% < target price < +10%

-10% < target price < 0%

< -10% to target price

Our target prices are established by determining the fair value of stocks, taking into account additional fundamental factors and news of relevance for the stock price (such as M&A activities, major forthcoming share deals, positive/negative share/sector sentiment, news) and refer to 12 months from now. All recommendations are to be understood relative to our current fundamental valuation of the stock. The recommendation does not indicate any relative performance of the stock vs. a regional or sector benchmark.

Distribution of ratings

Coverage universe Inv. banking-relationship

Recommendation No. in % No. in %

Buy 65 35.5 19 39.6

Accumulate 45 24.6 12 25.0

Hold 42 23.0 12 25.0

Reduce 10 5.5 4 8.3

Sell 5 2.7 0 0.0

N.R./UND.REV./RESTR. 16 8.7 1 2.1

Total 183 100.0 48 100.0

Explanation of valuation parameters and risk assessment Unless otherwise stated in the text of the financial analysis/investment research, target prices in the publication are based on either a discounted cash flow valuation and/or comparison of valuation ratios with companies seen by the analyst as comparable or a combination of the two methods. The result of this fundamental valuation is adjusted to reflect the analyst's views on the likely course of investor sentiment. Whichever valuation method is used there is a significant risk that the target price will not be achieved within the expected timeframe. Risk factors include unforeseen changes in competitive pressures or in the level of demand for the company’s products. Such demand variations may result from changes in technology, in the overall level of economic activity or, in some cases, from changes in social values. Valuations may also be affected by changes in taxation, in exchange rates and, in certain industries, in regulations. Investment in overseas markets and instruments such as ADRs can result in increased risk from factors such as exchange rates, exchange controls, taxation, political and social conditions.



Disclaimer This research report was prepared by Erste Group Bank AG (”Erste Group”) or its affiliate named herein. The individual(s) involved in the preparation of the report were at the relevant time employed in Erste Group or any of its affiliates. The report was prepared for Erste Group clients. The information herein has been obtained from, and any opinions herein are based upon, sources believed reliable, but we do not represent that it is accurate or complete and it should not be relied upon as such. All opinions, forecasts and estimates herein reflect our judgment on the date of this report and are subject to change without notice. The report is not intended to be an offer, or the solicitation of any offer, to buy or sell the securities referred to herein. From time to time, Erste Group or its affiliates or the principals or employees of Erste Group or its affiliates may have a position in the securities referred to herein or hold options, warrants or rights with respect thereto or other securities of such issuers and may make a market or otherwise act as principal in transactions in any of these securities. Erste Group or its affiliates or the principals or employees of Erste Group or its affiliates may from time to time provide investment banking or consulting services to or serve as a director of a company being reported on herein. Further information on the securities referred to herein may be obtained from Erste Group upon request. Past performance is not necessarily indicative for future results and transactions in securities, options or futures can be considered risky. Any forecasts or price targets shown for companies and/or securities discussed in this document may not be achieved due to multiple risk factors including without limitation market volatility, sector volatility, corporate actions, the unavailability of complete and accurate information and/or the subsequent transpiration that underlying assumptions made by Erste Group AG or by other sources relied upon in the document were inapposite. Not all transactions are suitable for every investor. Investors should consult their advisor, to make sure that the planned investment fits into their needs and preferences and that the involved risks are fully understood. Neither Erste Group AG nor any of its respective directors, officers or employees accepts any responsibility or liability whatsoever for any expense, loss or damages arising out of or in any way connected with the use of all or any part of this document. Erste Group AG may provide hyperlinks to websites of entities mentioned in this document, however the inclusion of a link does not imply that Erste Group AG endorses, recommends or approves any material on the linked page or accessible from it. Erste Group AG does not accept responsibility whatsoever for any such material, nor for any consequences of its use. This document is for the use of the addressees only and may not be reproduced, redistributed or passed on to any other person or published, in whole or in part, for any purpose, without the prior, written consent of Erste Group AG. The manner of distributing this document may be restricted by law or regulation in certain countries, including the United States. Persons into whose possession this document may come are required to inform themselves about and to observe such restrictions. By accepting this document, a recipient hereof agrees to be bound by the foregoing limitations. Additional notes to readers in the following countries: Austria: Erste Group Bank AG is registered in the Commercial Register at Commercial Court Vienna under the number 33209m. Erste Group AG is authorized and regulated by the Austrian Financial Market Authority (FMA) (Otto-Wagner Platz 5, 1090, Vienna, Austria) Germany: Erste Group Bank AG is authorised for the conduct of investment business in Germany by the Austrian Financial Market Authority (FMA) and subject to limited regulation by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin). United Kingdom: Erste Group Bank AG is regulated for the conduct of investment business in the UK by the Financial Conduct Authority and the Prudential Regulation Authority. This document is directed exclusively to eligible counterparties and professional clients. It is not directed to retail clients. No persons other than an eligible counterparty or a professional client should read or rely on any information in this document. Erste Group AG does not deal for or advise or otherwise offer any investment services to retail clients. Czech Republic: Česká spořitelna, a.s. is regulated for the conduct of investment activities in Czech Republic by the Czech National Bank (CNB) Croatia: Erste Bank Croatia is regulated for the conduct of investment activities in Croatia by the Croatian Financial Services Supervisory Agency (CFSSA) Hungary: Erste Bank Hungary ZRT. and Erste Investment Hungary Ltd. are regulated for the conduct of investment activities in Hungary by the Hungarian Financial Supervisory Authority (PSZAF). Serbia: Erste Group Bank AG is regulated for the conduct of investment activities in Serbia by the Securities Commission of the Republic of Serbia (SCRS). Romania: Banka Comerciala Romana is regulated for the conduct of investment activities in Romania by the Romanian National Securities Commission (CNVM). Poland: Erste Securities Polska S.A. is regulated for the conduct of investment activities in Poland by the Polish Financial Supervision Authority (PFSA).

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