Thai
/ 2010-12-20 14:44
/
Bez rangi
Powitania Cilaczu :)
Azoty Tarnow otrzymaly rekomendacje z BZWBK, w DM dostepna jest w j. angielskim:
"Twice bigger, more than twice stronger"
Buyy maintained. 12M Target Price raised 69% to PLN 37.1.
Global economic crisis of 2008-2009 may turn a blessing for Tarnow. Paradoxically, the entity which was condemned to be swallowed by local much stronger peers, will now be the one picking up bets for the acquisition. ZAK is on the first takeover spree path on the Polish ground, which would double Tarnow's earnings base and thus the market strength.
Two successfully completed, highly attractively priced deals with Unylon Polymers and ZAK, paired with the ongoing corporate in-house restructuring make us believe Tarnow is still an extremely appealing investment story for the year to come. Factoring ZAK's results we lift our 12-month Target Price to PLN 37.10 from PLN 22.00. 50% upside potential derived from DCF model combined with a peers multiples based valuation of PLN 44.80 prompt us to tag Tarnow as a strong BUYY bet.
ZAK acquisition opens a real deal spree.
Tarnow effectively acquired Unylon Polymers in Jan’10 for EUR 4m. The transaction has already paid off its entire bill as the global plastics market sported an unprecedented turnaround. Unylon will be one of the prime earnings drivers in 2011. In Oct’10, Tarnow absorbed a 52.6% stake in ZAK, the neighbouring and historically nearly twice as strong twin fertilizers player, for PLN 150m. The deal strikes 2011’s P/E and EV/EBITDA ratios of 5.0x and 2.8x, respectively, making the transaction a real bargain.
ZAK likely to shoot up Tarnow to new operational levels and to the radar screen of major European chemical players.
ZAK is ranked amongst top-five European producers of oxo alcohols and plasticizers, used in the production of plastics, and Poland’s third largest producer of fertilizers, which is also the most cost-efficient local fertilizer manufacturer. The merged entity will be fully equipped to wrestle with the largest local fertilizer player, Pulawy, and will be undisputed domestic leader in plastics, oxo alcohols and plasticizers. ZAK will be consolidated as of mid-November 2010 adding roughly PLN 210m to the top line and PLN 18m to EBIT.
Management identified 18 areas of synergies; we plugged only five echelons.
Our initial estimates point to PLN 40-50m of annual synergies related to the scale of purchases, local market pricing power, logistics costs and administrative costs shed. However, as soon as ATT and ZAK integration gets the right colour, we are likely to lift further the costs savings gains.
Plastics and plasticizers market extremely robust; fertilizers shyly join the party.
The long-awaited firming within the fertilizer market has finally materialized after the summer frenzy in the grain market.
The CAN price rebounded 41% within 3Q’10, lifting the fertilizer segment contribution to consolidate EBIT to positive territory in Sept’10, for the first time in over a year. Since CAN price has gained another 3% in 4Q’10QTD (26% in average 4Q/3Q prices), Tarnow may again welcome hefty profits in the fertilizers segment. Importantly, from ATT’s perspective, the most crucial event of recent weeks was the 35% ammonium sulphate (AS) price surge at the end of 3Q’10, as this fertilizer was the prime drag on company’s profitability on a year-to-date basis. AS may be an extra boost to our 2011-onward forecasts as we assumed its price will hover around USD 147/ton in 2011 vs. the current quotation of USD 215/ton.
Huge valuation upside.
Following a 30% average increase in Tarnow’s stand-alone 2011-12’s operating profits and the inclusion of ZAK’s results, the merged entity trades at attractive 2011’s P/E of 8.7x and EV/EBITDA of 3.0x. The 2011 valuation discount at which Tarnow trades to peers, 30-58%, stays at high 31-61% going into 2012. Since our new 12M Target Price offers 50% upside potential, we remain heavy BUYYers of Tarnow.
Takze parkiet wspomina o ostatnich rekomendacjach CitiGroup i BZWBK:
http://www.parkiet.com/artykul/998436_Azoty-Tarnow-wciaz-pna-sie-w-gore.html
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