What’s new? With Covid lockdowns -hopefully- done, favorable base effect growth in 2022 and the rich dividend policy well communicated (min E1.0 DPS /+7.3% yield p.a.), we try to understand what is weighing down on the stock, currently trading 12.6x EPS and 7.6x EBITDA 2022E. Conclusion. We conclude it is the combination of a) small -if any- terminal value for land-based games and VLTs post their license expiration (2030 and 2035) and b) partial migration from the high margin offline business to the low margin online business (see appendix at the end of this note).

This note is about investing, not trading or event-driven ideas. We believe our OI rated stocks will outperform the market on a risk-adjusted basis in the next 12-18 months. We recommend you own OPAP, Jumbo, PPC, Alpha Bank and ADMIE. We downgrade OTE given it is trading at our target price. We assume the pandemic will be less of a risk; we consider the end of free money and elevated costs and reiterate cash flow conversion as our #1 criterion.

What’s new? We are incorporating IPTO’s RAB 2022-2025 proposal into our model. In the process, we believe we have found the ‘catch’ weighing negatively on the investment case: lower than regulated adjusted profits in 2018-2021, reducing distributable income and dividends. Although the delta is small, we believe this to be important given the visible cash flow / dividend profile of the investment case. This has been more acute in 2021, due to the lack of counterbalancing +ve one-off items witnessed in previous years.
Where is the delta coming from? The main source (underlying vs. RoRAB EBIT) is the…

What’s new? In this note we analyze how much of reported / actual 9M 2021 NAV is attributed to the Ellinikon project and how much to the ‘old’ Lamda assets. With shares trading 7% below 9M 2021 NAV, we can also infer how much of Ellinikon is discounted into the current market cap. We present our own NAV estimates and repeat the comparison, to see if there is a big-enough discrepancy to be exploited. Conclusion: Out of the latest reported NAV, E633m or 46% is attributed to Ellinikon. The company clarifies this relates to land only, but we understand the assessment has taken into consideration future developments, therefore it does not make much of a difference, in our view. The above implies investors need to start incorporating Phase 2 of Ellinikon (2026-2035) in their assessment to end up with a meaningful upside on the stock.

What’s new? 2021 trading data show ADV @ E71m (was E65m in 2020) and velocity rate @ 29%, which is lower than 2020 and the average witnessed post 2011, albeit on a higher market cap overall for Greek equities. Secondly, 2022 YTD has been strong with a 7-session average ADV of E74m. The impressive part is the >E100m ADV of the last three sessions. Too early to judge but we must go back to 2015 to spot a January with ADV >E100m. Conclusion: We need a better (cheaper) valuation than 11x EBITDA or 20x EPS x-cash 2021E to compensate for the opportunity cost (i.e., value trap or dead money risk) associated with owing the stock.