Our conviction on AMDIE Holdings has increased following the release of (equity consolidated) IPTO’s FY 2020 results: a) all interconnection projects are on track; b) capex spending came in line with demanding E500m/year target; c) HEDNO’s RoRAB (WACC) > 6.5% for 2021-2024 is a positive readthrough for IPTO’s own 2021-2024 RAB to be decided by year end; d) management estimates 70% out of its E5bn interconnection investment program should be eligible for PMI premium RoRAB (+1.0%-2.5%). All the above, combined with the interconnection revenue pot and the vaccination rollout (however slow), confirm the unparallel risk-reward profile of the investment case: RAB expansion @ attractive returns offered @ a valuation discount compared to peers.

IPTO remains an attractive investment case to be exploited through its listed owner ADMIE Holdings. RAB expansion (+70% by 2024E vs 2019) and EBIT visibility are offered at a discount to peers. Capex is the single most important number to follow but we reckon the following points are equally important: 1/) the pandemic-related drop in electricity demand, affecting system rent revenues and 2) the fixed assets revaluation, inflating depreciation above regulated remuneration…

With this note we briefly share our views on all the names we cover. We start with our OI picks, followed by Radar and DOI names. We have added several names in our Universe, most of which on a Not Rated (NR) basis.

We Initiate with… contact@researchgreece.com