Tuesday, October 18, 2016 | daily publication

Morning Comments Equity Market, Poland Research Department: Michał Marczak +48 22 438 24 01 Michał Konarski +48 22 438 24 05 DJIA

Kamil Kliszcz +48 22 438 24 02 Paweł Szpigiel +48 22 438 24 06

Piotr Zybała +48 22 438 24 04

-0 .2 9 % FTSE 100

6 ,9 4 7 .6

-0 .9 4 % Copper (LME)

S&P 500

2 ,1 2 6 .5

-0 .3 0 % WIG20

1 ,7 1 4 .2

-0 .3 2 % Crude Oil (Brent)

NA SDA Q

5 ,1 9 9 .8

-0 .2 7 % BUX

DA X CA C 40

1 8 ,0 8 6 .4

Jakub Szkopek +48 22 438 24 03 Piotr Bogusz +48 22 438 24 08

1 0 ,5 0 3 .6 4 ,4 5 0 .2

4 ,6 7 5 .0

+0 .0 0 %

4 9 .9 3

-0 .8 5 %

2 8 ,6 1 3 .0

+0 .7 8 % USD/PLN

3 .9 2 8 9

-0 .0 3 %

-0 .7 3 % PX 50

9 0 7 .0

+0 .8 7 % EUR/PLN

4 .3 2 1 3

+0 .2 2 %

-0 .4 6 % PLBonds10

3 .0 6 5

+0 .0 2 % EUR/USD

1 .1 0 0 0

+0 .2 6 %

Company & Sector News PKO BP

PKO BP to book additional PLN 100m one-time gain in Q3

Buy – 02/02/16 Target price: PLN 31.62

PKO BP reported it would recognize a one-time gain of ca. PLN 100m in the profits for Q3 2016, stemming from asset sales by the subsidiary Qualia Development. PLN 100m is a considerable boost to PKO's Q3 2016 results, scheduled for a release on November 7th. (M. Konarski, M. Polańska)

Millennium

KNF reduces Millennium's capital buffer

Buy – 02/02/16 Target price: PLN 7.00

The financial regulator KNF has requested that Bank Millennium keep the capital buffer against FX mortgage exposure at 3.09ppts, i.e. below the previous requirement of 3.83ppts. The lower capital buffer more than offsets the 0.25% buffer recently imposed on Millennium as an "other systemically important institution." Currently Millennium's minimum capital requirements are 16.59% TCR and 12.85% CET 1, which the Bank fulfills. (M. Konarski, M. Polańska)

PGNiG

PGNiG wholesale tariff raised by 4%

Accumulate – 27/07/16 Target price: PLN 6.06

Poland's energy regulator URE has raised by 4% the wholesale price tariff of PGNiG for November and December 2016. The raise reflects the higher costs of Yamal gas, which according to our calculations have increased 6-7% q/q. The fact that the regulator took this into account bodes well for PGNiG's retail tariff for 2017. (K. Kliszcz)

PKN Orlen

Czech unit receives next insurance payout

Reduce – 19/04/16 Target price: PLN 59.00

Unipetrol has received the next payment in the amount of $90m as compensation for the fire damage suffered by its refinery in Litvinov, which it will recognize in the financial results for Q3 2016. Our Q3 estimates for PKN Orlen do not include the insurance payout, but they do factor in lost profit compensation in the amount of PLN 1bn. (K. Kliszcz)

Forte

Forte takes out EUR 140m loan Forte signed a EUR 140m loan agreement with PKO BP and BGK to finance part of the construction costs of a new fiberboard factory. (J. Szkopek)

Pozbud

Pozbud breaks ground on first real-estate project Pozbud T&R has commenced the construction of a multi-family residential development in Poznań, scheduled for completion in 2018. (J. Szkopek)

Quarterly Earnings Results Sfinks

Sfinks sees sales improvement in Q3 2016 Sfinks reported y/y improvement in the revenues and profits for the third quarter of fiscal 2016 ended 31 August. Monthly revenue per restaurant in the period increased 12.2% to PLN 162,700, driven mainly by the Sphinx restaurant chain after restructuring and the implementation of a successful marketing strategy. Sfinks operated 112 restaurants at 31 August 2016 (flat y/y). Thanks to improved sales, resulting in fixed cost dilution, the Q3 EBITDA margin increased by 0.44ppt to 9.9%. The restructuring and marketing efforts should continue to drive Sfinks's revenues in the periods ahead. (P. Bogusz)

Q3 2016* results (PLN m) Revenue EBITDA EBITDA margin

Q3'16

Q3'15

change

8M'16

8M'15

52.6

46.9

12.2%

143.8

132.9

change 8.1%

5.2

4.5

17.4%

14.3

15.1

-5.6%

9.9%

9.5%

0.44pp

9.9%

11.4%

-1.44pp

EBIT

2.4

2.0

20.5%

6.3

8.4

-24.7%

Pre-tax profit

1.3

1.4

-4.9%

11.8

6.2

89.6%

Net profit

1.3

0.7

70.0%

7.6

3.4

125.1%

Source: Sfinks, Dom Maklerski mBanku; *Third quarter started on 1 June and ended 31 August

More News Celon Pharma

Celon Pharma expects exports to be twice to three times domestic sales in 2-3 years. The Company wants to distribute about 20% of annual profits as dividends.

CI Games

CI Games has moved the release date of Sniper 3 to 4 April 2017.

Enea

TFI PZU funds increased equity stake from 4.99% to 5.16%. According to the Dziennik Gazeta Prawna newspaper, the amount of money the state coal miner KHW needs to stay afloat is closer to PLN 1 billion then the PLN 700m cited by other sources.

Housing

Housing starts in Poland were down 10.3% y/y and 3.8% m/m in September 2016 - GUS.

Housing, Banks

Polish demand for home loans contracted 0.8% y/y in September, and demand for consumer loans posted a drop of 3.9% – BIK Credit Information Bureau.

i2 Development

i2 Development will issue PLN 25m bonds with 36-month maturity.

JSW

The Australian coking coal price benchmark has risen 2.8% to $232.6/t.

Mo-Bruk

Value FIZ Subfundusz 1 is offering to purchase up to 1,327,375 shares in Mo-Bruk at PLN 15.3 per share in a tender offer scheduled to last from 7 to 22 November 2016.

Mostostal Warszawa

Mostostal Warszawa was awarded a PLN 21.5m (gross) contract by the infrastructure authority of Gdynia.

PGE

PGE expects its KWB Turów lignite mine to achieve full capacity on 1 November.

PGNiG

PGNiG's Supervisory Board has ordered a recruitment process to find a new CEO and top executives.

Polnord

Polnord has offered for sale 173 flats in Warsaw.

Qumak

Legg Mason Parasol FIO and Legg Mason Senior FIO funds reduced joint equity stake from 5.27% to 4.4%.

Soho Development

Soho Factory has secured a building permit for a 12-story residential building in Warsaw.

Stelmet

Share allotments in the oversubscribed IPO of Stelmet had to be scaled down by ca. 86%.

Utilities

Polish electricity prices averaged PLN 172.34/MWh in Q3 2016, a decrease of 1.37% from Q3 2015: Energy Regulatory Office (URE).

2

Corporate Action Calendar Friday, 21 October 2016 PZU

Dividend payment day (PLN 2.08 DPS).

Economic Calendar Tuesday, 18 October 2016 Time Region Data 10:30 UK Core CPI 10:30 UK CPI 10:30 UK PPI Input (NSA) 10:30 UK PPI Output (NSA) 14:00 Poland Wages 14:30 USA Core CPI 14:30 USA CPI 16:00 USA NAHB Housing Market Index 22:00 USA TIC Net Long-term Flows 22:00 USA TIC Net Flows Wednesday, 19 October 2016 Time Region Data 04:00 China GDP 04:00 China Industrial Production 04:00 China Retail Sales 06:30 Japan Industry Activity Index 10:30 UK Unemployment Rate 11:00 EU Construction Orders 14:00 Poland Industrial Production 14:00 Poland Manufacturing Production 14:00 Poland PPI 14:00 Poland Retail Sales 14:30 USA Building Permits 14:30 USA Housing Starts 16:30 USA Crude Oil Inventory Thursday, 20 October 2016 Time Region Data 08:00 Germany PPI 10:00 EU Capital Account Balance 10:00 EU Current Account Balance 10:00 EU Financial Account Balance 10:30 UK Retail Sales 10:30 UK Retail Sales Less Autos 13:45 EU Interest Rate 14:30 USA Philadelphia Fed Index 16:00 USA Existing Home Sales 16:00 USA Leading Indicators Index Friday, 21 October 2016 Time Region Data 12:00 UK CBI Industrial Trends 16:00 EU Consumer Confidence Index (P) Monday, 24 October 2016 Time Region Data 01:50 Japan Exports 01:50 Japan Imports 01:50 Japan Trade Balance 07:00 Japan Leading Indicators Index (F) 09:00 France PMI Manufacturing (P) 09:00 France PMI Services (P) 09:30 Germany PMI Manufacturing (P) 09:30 Germany PMI Services (P) 10:00 EU PMI Manufacturing (P) 10:00 EU PMI Services (P) Poland Unemployment Rate

Period September September September September September September September October August August

Forecast 1.40% y/y 0.20% m/m; 0.92% y/y 0.30% m/m; 7.30% y/y 0.20% m/m; 1.00% y/y

Period Q3 August August August August August September September September September September September 14 October

Forecast 6.70% y/y 6.40% y/y

Period September August August August September September

0.20% m/m; 2.30% y/y 0.28% m/m; 1.50% y/y 63.67

0.20% m/m 4.92% -1.50% m/m; 1.70% y/y

1,168,500 m/m 1,167,200 m/m

0.30% 0.20% 0.10% -1.80% 0.30% 0.20%

m/m; m/m; m/m; m/m; m/m; m/m;

Previous 1.30% y/y 0.60% y/y 7.60% y/y 0.80% y/y 4.70% y/y 2.30% y/y 1.10% y/y 65.00 103.90bn 140.60bn

Previous 6.70% y/y 6.30% y/y 10.60% y/y 0.30% m/m 4.90% 1.80% m/m; 3.10% y/y 3.30% m/m; 7.50% y/y 3.30% m/m; 9.40% y/y -0.30% m/m; -0.10% y/y 5.60% y/y 1,139,000 m/m 1,142,000 m/m 474.00m

Forecast

Previous -0.10% m/m; -1.60% y/y 0.20bn 21.00bn -0.80bn -0.20% m/m; 6.20% y/y -0.30% m/m; 5.90% y/y 0.00% 12.80 5.33m -0.20%

Period October October

Forecast

Previous -5 -8.20

Period September September September August October October October October October October September

Forecast

Previous -9.60% -17.30% -19bn 100.00 49.70 52.30 54.30 50.90 52.60 52.20 8.50%

October September September

3

Current Recommendations by Dom Maklerski mBanku P/E

EV/EBITDA

Current price

Upside / Downside

2016

2017

75.93

45.85

+65.6%

13.9

130.3

305.10 0.96 75.32

318.50 1.26 77.58

-4.2% -23.8% -2.9%

14.5 32.1 16.3

14.3 17.6 16.9

119.38 7.00

146.85 5.77

-18.7% +21.3%

20.0 12.8

18.2 10.2

124.75 24.84 835

127.42 31.62 980 CZK

121.00 25.36 889

+5.3% +24.7% +10.3%

15.4 11.0 13.0

15.0 10.3 14.2

2016-02-02 2016-02-02 2016-10-05

26.17 11.32 7498

32.34 EUR 17.14 EUR 6487 HUF

27.72 14.23 7445

+16.7% +20.4% -12.9%

10.4 15.4 11.4

9.3 5.1 9.3

Buy

2016-02-02

32.33

42.44

25.49

+66.5%

9.4

7.8

Hold Buy

2016-08-03 2016-02-02

219.10 35.10

211.44 46.76

222.70 36.97

-5.1% +26.5%

16.3 10.2

13.9 10.3

SKARBIEC HOLDING Fuels, chemicals

Buy

2016-02-02

27.00

42.20

33.28

+26.8%

8.7

7.6

CIECH GRUPA AZOTY LOTOS

Hold Hold Hold

2016-02-02 2016-08-30 2016-04-19

80.00 64.79 28.09

74.35 65.50 26.50

66.30 61.46 29.97

+12.1% +6.6% -11.6%

7.9 12.0 10.0

MOL PGNIG

Hold Accumulate

2016-04-19 2016-07-27

16420 5.50

16593 HUF 6.06

17725 5.19

-6.4% +16.8%

PKN ORLEN POLWAX SYNTHOS

Reduce Buy Hold

2016-04-19 2016-02-02 2016-07-05

71.18 15.70 3.54

59.00 23.24 3.39

67.75 17.49 4.66

Power Utilities CEZ

Accumulate

2016-10-04

436.00

496.8 CZK

ENEA ENERGA PGE

Hold Buy Hold

2016-10-04 2016-10-04 2016-10-04

8.45 7.40 10.18

8.81 9.20 10.63

TAURON Telecommunications NETIA

Buy

2016-10-04

2.55

Date issued

Price on report date

Company

Recommendation

Banks ALIOR BANK

Buy

2016-05-24

55.40

BZ WBK GETIN NOBLE BANK HANDLOWY

Hold Buy Hold

2016-08-03 2016-02-02 2016-10-05

301.25 0.46 78.08

ING BSK MILLENNIUM

Sell Buy

2016-10-05 2016-02-02

146.90 5.20

PEKAO PKO BP KOMERCNI BANKA

Hold Buy Buy

2016-08-03 2016-02-02 2016-09-29

ERSTE BANK RBI OTP BANK

Buy Buy Reduce

Insurance PZU Financial services KRUK PRIME CAR MANAGEMENT

Target price

2016

2017

9.5 15.3 9.2

5.4 6.0 5.7

5.7 7.1 5.7

15.9 14.2

11.4 12.7

5.0 5.4

4.2 5.0

-12.9% +32.9% -27.3%

7.6 7.4 20.4

8.8 7.3 16.4

4.9 5.9 11.8

5.5 5.6 10.4

468.60

+6.0%

13.4

15.7

6.7

7.1

8.89 7.42 9.77

-0.9% +24.0% +8.8%

5.0 254.2 10.2

5.7 6.0 8.0

4.2 4.1 4.0

4.3 4.0 4.7

3.03

2.38

+27.3%

7.8

4.2

4.1

4.4

Accumulate

2016-06-08

5.05

5.30

4.82

+10.0%

-

-

4.5

5.1

ORANGE POLSKA Media

Buy

2016-02-02

6.43

8.05

5.72

+40.7%

30.2

25.7

4.2

4.3

AGORA CYFROWY POLSAT WIRTUALNA POLSKA

Buy Reduce Accumulate

2016-10-05 2016-09-13 2016-06-02

10.65 24.25 46.00

12.60 21.80 50.00

10.74 23.92 55.70

+17.3% -8.9% -10.2%

16.8 20.2

14.7 17.8

6.8 7.4 13.8

6.5 7.2 12.3

IT ASSECO POLAND

Hold

2016-09-26

57.25

60.60

52.00

+16.5%

13.8

12.8

6.8

6.4

CD PROJEKT COMARCH SYGNITY

Sell Buy Suspended

2016-08-03 2016-08-16 2013-02-05

34.00 166.00 16.80

26.50 200.00 -

39.60 189.00 5.86

-33.1% +5.8% -

33.5 23.6 -

52.1 17.7 -

23.7 9.4 -

37.5 8.3 -

Mining & Metals KGHM

Reduce

2016-08-03

78.20

61.50

68.01

-9.6%

19.7

11.1

6.0

5.0

LW BOGDANKA Manufacturers ELEMENTAL

Sell

2016-08-03

52.00

33.00

64.05

-48.5%

9.8

12.2

3.8

4.2

Buy

2016-06-13

3.50

4.60

3.74

+23.0%

13.1

10.7

10.7

8.4

FAMUR KERNEL KĘTY

Hold Hold Hold

2016-04-06 2016-03-07 2016-07-01

2.57 54.90 318.90

2.20 55.00 291.10

4.30 59.70 393.05

-48.8% -7.9% -25.9%

42.6 5.6 14.8

24.6 5.8 17.9

9.8 4.3 11.0

8.6 4.1 10.5

UNIWHEELS VISTAL

Buy Buy

2016-07-21 2016-02-02

149.60 8.00

172.10 15.40

198.50 9.60

-13.3% +60.4%

13.0 7.3

11.5 6.3

9.4 7.2

8.1 6.8

Construction BUDIMEX ELEKTROBUDOWA

Accumulate Buy

2016-10-05 2015-12-03

207.00 141.00

225.60 166.50

210.05 102.60

+7.4% +62.3%

16.7 8.8

14.6 8.6

7.3 5.0

6.7 4.6

ERBUD UNIBEP

Buy Hold

2016-02-03 2016-09-06

25.95 11.79

36.00 12.10

29.00 10.71

+24.1% +13.0%

10.4 11.3

9.5 9.1

5.1 7.0

4.8 5.8

Property Developers CAPITAL PARK DOM DEVELOPMENT

Hold Buy

2016-04-06 2016-05-30

6.55 54.40

6.50 69.50

6.47 60.00

+0.5% +15.8%

49.4 11.8

16.2 9.9

31.1 9.6

20.3 8.0

ECHO GTC

Hold Hold

2016-04-06 2016-10-05

6.52 8.25

2.73 8.20

4.75 8.10

-42.5% +1.2%

8.8 11.1

8.2 5.0

15.0 13.8

12.6 7.5

ROBYG Retail AMREST

Buy

2016-01-28

2.83

3.40

2.98

+14.1%

9.3

9.9

8.6

9.3

Reduce

2016-09-16

252.00

236.00

228.10

+3.5%

27.7

23.7

11.3

9.3

CCC EUROCASH JERONIMO MARTINS

Hold Hold Reduce

2016-08-03 2016-10-05 2016-10-05

184.00 43.00 16.01

181.00 42.70 14.9 EUR

182.75 40.10 15.96

-1.0% +6.5% -6.6%

26.5 21.9 26.1

19.5 18.9 22.1

17.8 11.4 11.8

13.6 9.7 10.2

LPP Other

Buy

2016-08-29

4549

5500

5153

+6.7%

36.4

19.1

17.5

11.0

WORK SERVICE

Accumulate

2016-02-02

11.96

13.70

11.46

+19.5%

16.3

13.5

8.9

7.7

4

CEE bank valuations (17-Oct-16) P/E Price

2015

ROE

2016

2017

2015

2016

P/BV 2017

2015

2016

DY 2017

2015

2016

2017

POLISH BANKS Alior Bank

45.9

10.7

13.9

130.3

9%

7%

1%

0.9

1.0

1.0

0.0%

0.0%

0.0%

318.5

13.5

14.5

14.3

13%

11%

11%

1.6

1.6

1.5

0.0%

7.1%

3.6%

Getin Noble Bank

1.26

75.6

32.1

17.6

1%

2%

4%

0.6

0.6

0.6

0.0%

0.0%

0.0%

Handlowy

77.6

16.2

16.3

16.9

9%

9%

9%

1.5

1.5

1.5

9.6%

6.0%

6.1%

BZ WBK

ING BSK

146.9

17.0

20.0

18.2

11%

9%

9%

1.8

1.7

1.6

2.7%

2.8%

2.5%

5.8

12.8

12.8

10.2

9%

8%

10%

1.1

1.0

0.9

0.0%

0.0%

3.9%

121.0

13.9

15.4

15.0

10%

9%

9%

1.4

1.4

1.3

8.3%

6.9%

6.3%

25.4

12.1

11.0

10.3

9%

9%

10%

1.0

1.0

1.0

0.0%

7.0%

3.6%

13.7

15.0

16.0

9%

9%

9%

1.2

1.2

1.1

0.0%

4.4%

3.6%

Millenium Pekao PKO BP Median INVESTORS IN POLISH BANKS BCP

0.02

2.6

5.2

3.1

7%

6%

8%

0.2

0.2

0.2

0.0%

0.0%

0.0%

Citigroup

48.6

9.0

10.5

9.4

8%

6%

7%

0.7

0.6

0.6

0.3%

0.9%

1.5%

Commerzbank

5.7

6.3

9.8

7.7

4%

3%

3%

0.2

0.2

0.2

3.5%

3.4%

4.1%

ING

11.3

10.3

10.2

10.1

10%

9%

9%

1.0

0.9

0.8

6.2%

6.0%

6.3%

KBC

52.9

9.2

10.4

10.8

17%

14%

13%

1.6

1.4

1.3

0.0%

5.5%

5.6%

Santander

4.0

8.5

9.8

9.2

8%

7%

7%

0.6

0.6

0.6

4.9%

5.0%

5.0%

UCI

2.2

Median

5.9

6.5

5.0

4%

4%

5%

0.3

0.3

0.3

5.0%

4.2%

6.7%

8.5

9.8

9.2

8%

6%

7%

0.6

0.6

0.6

3.5%

4.2%

5.0%

FOREIGN BANKS Erste Bank*

27.7

12.3

10.4

9.3

9%

10%

10%

1.1

1.0

0.9

0.0%

2.2%

2.5%

RBI*

14.2

10.9

15.4

5.1

5%

3%

10%

0.5

0.5

0.5

0.0%

0.0%

2.6%

Komercni Banka* OTP* Banco Popular Espanol

889

13.2

13.0

14.2

12%

12%

11%

1.6

1.6

1.5

7.0%

7.0%

4.5%

7,445

31.3

11.4

9.3

5%

13%

14%

1.6

1.4

1.3

2.0%

2.2%

2.7%

1.0

8.0

-

7.9

2%

-20%

5%

0.2

0.3

0.3

4.7%

0.2%

3.6%

12.2

2.9

34.4

7.7

-5%

-1%

3%

-

-

-

0.0%

0.0%

2.2%

Sberbank

1.12

7.2

3.5

3.0

10%

18%

18%

0.7

0.6

0.5

2.7%

5.9%

7.2%

VTB Bank

2.10

-

48.3

12.6

-1%

2%

5%

0.8

0.8

0.7

0.0%

1.3%

2.0%

Piraeus Bank

0.15

-

14.5

4.3

-9%

2%

4%

0.2

0.2

0.2

0.0%

0.0%

0.0%

Alpha Bank

1.61

-

12.0

5.6

-10%

3%

5%

0.3

0.3

0.3

0.0%

0.0%

0.0%

National Bank of Greece

0.20

-

14.4

4.9

-15%

2%

5%

0.2

0.2

0.2

0.0%

0.0%

0.0%

Eurobank Ergasias

0.55

-

12.7

4.7

-18%

2%

4%

0.2

0.2

0.2

0.0%

0.0%

0.0%

Akbank

8.05

10.5

7.6

6.8

12%

15%

14%

1.2

1.0

0.9

1.8%

2.6%

2.8%

Turkiye Garanti Bank

7.95

9.3

7.5

6.4

13%

14%

14%

1.2

0.9

0.8

1.6%

2.0%

2.5%

Turkiye Halk Bank

8.91

5.0

4.2

3.6

13%

13%

13%

0.6

0.5

0.4

2.2%

2.1%

2.1%

Turkiye Vakiflar Bankasi

4.46

6.3

5.5

4.9

11%

11%

11%

0.7

0.6

0.5

0.9%

0.9%

1.0%

Yapi ve Kredi Bankasi

3.53

Deutsche Bank

Median

8.3

5.7

5.1

9%

11%

11%

0.7

0.6

0.5

2.3%

1.6%

2.1%

8.8

11.7

5.6

5%

10%

10%

0.7

0.6

0.5

0.9%

1.3%

2.2%

Insurance company valuations (17-Oct-16) P/E

ROE

P/BV

DY

Price

2015

2016

2017

2015

2016

2017

2015

2016

2017

2015

2016

2017

25.5

9.4

9.4

7.8

18%

18%

22%

1.7

1.7

1.6

9.5%

10.7%

12.8% 4.8%

POLISH COMPANIES PZU FOREIGN COMPANIES Vienna Insurance G.

17.9

11.8

8.4

8.1

4%

6%

6%

0.5

0.5

0.5

7.4%

4.4%

Uniqa

5.8

5.4

9.6

8.3

11%

5%

7%

0.6

0.5

0.5

7.9%

8.4%

8.9%

Aegon

3.7

6.6

8.0

5.9

3%

4%

6%

0.3

0.3

0.3

6.7%

7.0%

7.2%

Allianz

138.0

9.4

9.5

9.0

11%

10%

10%

1.0

0.9

0.9

5.3%

5.4%

5.5%

4.4

9.6

9.7

8.9

14%

10%

11%

1.1

1.1

1.1

4.8%

5.2%

5.8%

20.2

8.6

8.6

8.3

9%

9%

9%

0.7

0.7

0.7

5.5%

5.7%

6.0%

118.4

11.4

11.4

11.1

9%

9%

9%

1.0

1.0

0.9

4.4%

4.3%

4.5%

11.6

8.0

7.9

7.6

10%

9%

9%

0.8

0.7

0.7

6.1%

6.6%

7.1%

498.3

16.7

12.1

10.1

7%

9%

11%

1.0

1.0

1.0

3.8%

4.1%

4.6%

Aviva AXA Baloise Assicurazioni Generali Helvetia Mapfre

2.5

13.8

11.1

10.4

8%

8%

9%

0.9

0.9

0.8

5.4%

4.9%

5.2%

RSA Insurance

5.6

20.2

19.3

13.6

8%

10%

12%

1.5

1.5

1.5

1.8%

2.5%

3.5%

13.3

11.6

10.6

7%

10%

11%

1.2

1.2

1.1

6.4%

6.6%

6.7%

10.5

9.7

9.0

9%

9%

9%

0.9

0.9

0.9

5.5%

5.3%

5.7%

Zurich Financial Median

251.8

Source: Dom Maklerski mBanku (Polish stocks and stocks marked with an asterisk), IBES/Bloomberg (foreign stocks)

5

Gas & Oil valuations (17-Oct-16) EV/EBITDA

EV/S

P/E

EBITDA margin

Price

2015

2016

2017

2015

2016

2017

2015

2016

2017

2015

2016

DY

2017

2015

2016

2017 0.0%

OIL COMPANIES Lotos

30.0

9.9

5.7

5.7

0.5

0.6

0.5

-

10.0

9.2

5%

10%

8%

0.0%

0.0%

17,725

4.2

5.0

4.2

0.7

0.8

0.6

-

15.9

11.4

16%

17%

14%

2.7%

3.0%

3.3%

PKN Orlen

67.8

6.1

4.9

5.5

0.4

0.5

0.4

10.2

7.6

8.8

7%

10%

7%

2.4%

3.0%

4.3%

HollyFrontier

23.6

2.9

9.3

5.0

0.4

0.5

0.4

4.9

29.0

11.2

14%

6%

9%

5.5%

5.6%

5.9%

Tesoro

80.5

3.8

6.6

6.0

0.5

0.6

0.5

5.7

15.2

13.3

13%

9%

9%

2.3%

2.6%

2.9%

Valero Energy

54.2

3.2

6.0

4.8

0.3

0.4

0.3

6.2

16.4

10.4

10%

7%

7%

3.1%

4.5%

4.7%

Marathon Petroleum

41.9

5.8

8.7

7.2

0.5

0.6

0.5

7.3

18.1

12.4

9%

7%

7%

2.7%

3.2%

3.5%

Phillips 66

79.1

6.3

11.3

7.8

0.5

0.5

0.4

10.4

23.7

14.3

7%

5%

5%

2.7%

3.1%

3.3%

Tupras

59.7

6.0

7.5

6.5

0.6

0.6

0.5

6.3

8.9

7.6

10%

9%

8%

7.3%

8.1%

9.1%

OMV

27.1

4.3

5.4

4.6

0.7

0.8

0.7

8.0

13.8

12.1

16%

15%

15%

4.1%

3.5%

3.7%

Neste Oil

2.8%

MOL

39.1

10.0

8.3

9.0

1.0

1.0

0.9

15.9

13.3

14.8

10%

12%

10%

2.2%

2.6%

Hellenic Petroleum

4.1

4.5

4.6

4.7

0.4

0.4

0.4

5.7

5.7

6.3

9%

10%

8%

4.5%

4.9%

6.2%

Saras SpA

1.5

1.7

2.4

2.5

0.1

0.2

0.2

3.9

7.7

8.4

8%

7%

6%

11.0%

6.6%

6.3%

Motor Oil

11.0

Median

3.8

4.2

4.6

0.3

0.3

0.3

4.3

6.4

7.1

7%

7%

6%

5.4%

6.1%

6.8%

4.4

5.8

5.3

0.5

0.6

0.4

6.2

13.6

10.8

9%

9%

8%

2.9%

3.4%

4.0% 4.3%

GAS COMAPNIES A2A SpA

1.2

7.3

7.1

7.2

1.5

1.5

1.5

13.9

11.7

13.5

21%

21%

20%

3.3%

3.7%

Centrica

2.1

6.3

7.1

6.8

0.6

0.6

0.6

12.4

13.7

12.9

9%

9%

9%

5.7%

5.8%

6.0%

Enagas

25.6

11.2

11.6

11.6

8.4

8.5

8.5

14.8

14.6

14.3

75%

73%

73%

5.2%

5.4%

5.7%

Endesa

18.9

7.9

7.6

7.7

1.2

1.2

1.2

17.3

15.9

17.0

15%

16%

16%

5.8%

6.3%

6.0%

Engie

13.1

5.8

6.2

6.3

0.9

1.0

1.0

12.4

12.5

12.4

16%

16%

16%

7.6%

7.6%

5.4%

Gas Natural SDG

17.7

7.2

7.6

7.5

1.4

1.5

1.5

12.0

13.2

12.9

20%

20%

20%

5.3%

5.6%

5.7%

2.2

6.9

6.8

6.6

1.3

1.3

1.2

17.7

17.5

16.1

19%

19%

19%

4.0%

4.1%

4.3%

Snam SpA

4.7

10.8

11.5

11.2

8.4

8.7

8.6

13.9

15.9

14.9

78%

75%

76%

5.3%

5.2%

5.4%

PGNiG

5.2

5.1

5.4

5.0

0.8

0.9

0.9

14.3

14.2

12.7

17%

17%

19%

3.9%

3.5%

4.3%

10.6

7.8

10.3

5.9

3.1

-

-

24.1

-

13.4

39%

-

-

2.7%

-

-

4.8

5.2

6.0

4.6

0.6

0.6

0.5

13.8

23.9

12.2

11%

10%

11%

8.2%

8.2%

8.2%

Hera SpA

BG Group BP Eni

13.3

4.7

6.1

4.3

0.8

1.0

0.9

57.6

-

19.2

17%

17%

21%

6.1%

6.0%

6.0%

Gazprom

135.6

2.7

3.3

3.0

0.9

0.9

0.8

2.8

3.4

3.3

32%

28%

27%

5.1%

6.5%

6.8%

NovaTek

109.3

1.1

0.9

0.8

0.4

0.4

0.3

0.3

0.2

0.2

35%

38%

36%

134%

157%

182%

ROMGAZ

23.4

2.8

3.4

3.2

1.6

1.7

1.7

7.2

8.7

8.1

55%

51%

52%

11.8%

9.5%

9.7%

Shell

22.8

6.1

6.7

4.5

0.8

0.9

0.8

13.4

23.4

11.9

14%

14%

17%

8.3%

8.2%

8.2%

136.7

23.3

29.5

21.1

7.9

9.4

7.7

-

-

-

34%

32%

36%

0.6%

0.6%

0.6%

43.6

6.2

7.6

5.8

1.0

1.1

0.9

11.8

15.4

11.5

17%

15%

16%

5.4%

5.5%

5.5%

6.2

6.9

6.1

1.1

1.1

1.0

13.8

14.2

12.9

19%

19%

20%

5.3%

5.8%

5.7%

2015

2017

2015

2016

2017

2015

2016

2017 7.6%

Statoil Total Median

Power generation company valuations (17-Oct-16) EV/EBITDA

EV/S

P/E

EBITDA margin

2016

DY

Price

2015

2016

2017

2015

2016

2017

EDF

10.2

3.7

3.9

4.1

0.9

0.9

0.9

5.0

6.6

9.0

24%

23%

22%

12.1%

9.3%

EDP

2.9

8.3

8.4

8.3

1.9

2.0

2.0

14.4

11.5

11.4

23%

24%

24%

6.5%

6.5%

6.5%

18.9

7.9

7.6

7.7

1.2

1.2

1.2

17.3

15.9

17.0

15%

16%

16%

5.8%

6.3%

6.0%

Enel

3.8

6.4

6.4

6.3

1.3

1.3

1.3

12.0

12.2

11.2

20%

20%

20%

4.2%

4.7%

5.2%

EON

6.7

4.8

7.0

6.7

0.3

0.9

0.9

8.3

16.3

12.7

7%

13%

14%

7.5%

3.7%

3.9%

14.9

9.7

10.8

10.7

3.2

3.3

3.2

18.2

23.2

23.1

33%

31%

29%

8.3%

5.0%

4.5%

ENERGY COMPANIES

Endesa

Fortum Iberdola

6.0

9.3

8.8

8.6

2.1

2.1

2.0

16.0

14.7

14.4

23%

24%

24%

4.6%

4.9%

5.1%

10.6

11.7

11.1

10.9

4.2

4.0

3.9

19.0

17.2

16.8

35%

36%

36%

4.1%

4.1%

4.2%

Red Electrica

19.0

10.6

10.4

10.1

8.0

7.9

7.7

16.8

15.9

15.3

75%

75%

76%

4.2%

4.5%

4.8%

RWE

13.8

5.1

6.7

6.7

0.8

0.8

0.8

7.7

13.8

12.3

15%

12%

12%

4.0%

2.0%

2.1%

SSE

15.4

9.9

10.0

9.7

0.8

0.7

0.8

12.9

13.1

13.0

8%

7%

8%

5.8%

5.8%

5.9%

14.9

10.6

11.2

12.4

3.5

3.3

3.3

19.2

19.0

23.4

33%

29%

27%

2.5%

1.7%

1.5%

468.6

5.9

6.7

7.1

1.8

2.0

2.0

12.2

13.4

15.7

31%

29%

28%

8.5%

8.5%

6.0% 2.4%

National Grid

Verbund CEZ PGE

9.8

2.5

4.0

4.7

0.7

0.9

1.0

-

10.2

8.0

29%

21%

21%

8.0%

2.6%

Tauron

2.4

3.4

4.1

4.4

0.7

0.8

0.8

-

7.8

4.2

19%

19%

19%

6.3%

0.0%

0.0%

Enea

8.9

4.1

4.2

4.3

0.9

0.9

0.9

-

5.0

5.7

22%

22%

21%

5.3%

0.0%

0.0%

7.4

3.2

4.1

4.0

0.6

0.8

0.7

3.7

-

6.0

20%

18%

18%

19.4%

6.6%

3.3%

10.7

3.7

2.6

2.2

0.4

0.4

0.4

18.0

4.4

2.4

11%

17%

20%

6.9%

3.5%

0.0%

6.2

6.9

6.9

1.0

1.1

1.1

14.4

13.4

12.5

22%

22%

21%

6.0%

4.6%

4.3%

Energa ZE PAK* Median

Source: Dom Maklerski mBanku (Polish stocks and stocks marked with an asterisk), IBES/Bloomberg (foreign stocks)

6

Fertilizer producers and chemical companies (17-Oct-16) EV/EBITDA Price

2015

2016

EV/S 2017

2015

2016

P/E 2017

2015

EBITDA margin

2016

2017

2015

2016

DY

2017

2015

2016

2017 8.8%

FERTILIZER PRODUCERS Acron

3,320

4.3

4.8

4.4

1.6

1.7

1.6

7.0

4.8

4.8

37%

36%

35%

5.2%

7.0%

Uralkali

4.7

10.6

13.4

13.4

6.2

7.3

7.1

12.6

8.3

7.5

58%

55%

53%

0.0%

0.1%

3.1%

Agrium

88.0

8.1

9.8

8.9

1.1

1.2

1.2

12.4

17.1

15.2

14%

13%

13%

3.9%

4.0%

4.0%

2,419

5.1

5.6

5.6

2.2

2.2

2.1

9.2

7.0

6.9

43%

40%

38%

5.9%

6.8%

6.4%

17.4

4.7

9.2

6.1

1.2

1.4

1.3

6.7

21.6

12.4

25%

16%

20%

6.1%

2.9%

3.7%

Phosagro K+S Yara International

268.0

4.1

5.2

5.3

0.8

0.9

0.8

7.7

11.5

10.9

18%

17%

16%

5.4%

4.9%

4.6%

The Mosaic Company

22.8

5.1

9.8

7.9

1.2

1.5

1.4

8.2

36.0

19.2

24%

15%

18%

4.7%

4.8%

4.7%

Potash

15.8

6.5

12.2

10.2

2.9

4.2

3.9

10.0

30.2

22.7

45%

35%

39%

9.6%

5.0%

2.5%

CF Industries

22.6

5.6

8.8

7.8

2.6

2.7

2.5

5.8

20.9

19.6

45%

31%

33%

5.3%

5.3%

5.4%

Israel Chemicals

6.9

10.0

12.0

10.9

2.3

2.3

2.2

15.7

21.9

19.4

23%

19%

20%

3.9%

2.3%

2.6%

Grupa Azoty

61.5

5.2

6.0

7.1

0.7

0.8

0.8

10.0

12.0

15.3

13%

13%

11%

0.0%

1.4%

3.2%

ZA Police*

21.0

7.8

7.1

6.4

0.7

0.8

0.7

10.2

10.7

8.3

9%

11%

11%

2.3%

0.0%

4.7%

180.0

4.6

4.6

4.4

0.8

0.9

0.9

7.8

8.4

8.6

17%

20%

19%

3.9%

5.8%

6.6%

5.2

8.8

7.1

1.2

1.5

1.4

9.2

12.0

12.4

24%

19%

20%

4.7%

4.8%

4.6%

ZCh Puławy* Median CHEMICAL COMPANIES Ciech

66.3

6.8

5.4

5.7

1.5

1.3

1.3

10.2

7.9

9.5

22%

23%

22%

0.0%

4.3%

3.8%

Akzo Nobel

62.0

8.3

8.0

7.8

1.2

1.2

1.2

15.3

14.8

14.4

14%

15%

15%

2.5%

2.6%

2.7%

BASF

78.3

8.1

8.5

8.0

1.2

1.5

1.4

16.2

17.2

15.5

15%

18%

18%

3.7%

3.8%

3.9%

Croda

36.1

16.5

14.9

13.9

4.6

4.2

4.0

26.9

24.1

22.5

28%

28%

29%

2.0%

2.1%

2.2%

Dow Chemical

53.0

7.9

7.7

7.0

1.5

1.5

1.5

16.2

15.1

13.1

19%

20%

21%

3.2%

3.5%

3.7% 3.9%

Sisecam

3.2

7.0

6.0

5.4

1.3

1.2

1.1

9.9

10.1

8.9

19%

20%

20%

1.8%

3.3%

Soda Sanayii

4.4

6.7

5.8

5.2

1.6

1.4

1.3

7.9

7.9

7.1

23%

24%

25%

3.3%

6.8%

7.9%

Solvay

103.9

6.5

5.1

4.9

1.2

1.0

1.0

16.4

12.6

12.1

18%

20%

20%

3.3%

3.3%

3.4%

Tata Chemicals

535.3

8.8

9.2

7.9

1.1

1.1

1.1

16.4

19.3

13.6

13%

12%

14%

1.9%

2.0%

2.1%

Tessenderlo Chemie

30.0

7.9

6.4

5.9

0.9

0.8

0.8

16.8

12.7

10.8

11%

13%

14%

0.0%

0.0%

0.0%

Wacker Chemie

81.0

Median

6.0

5.8

5.2

1.1

1.1

1.0

24.5

28.1

16.6

19%

19%

20%

1.7%

2.2%

2.7%

7.9

6.4

5.9

1.2

1.2

1.2

16.2

14.8

13.1

19%

20%

20%

2.0%

3.3%

3.4%

2017

2015

2016

2017

2015

2016

2015

2016

Machine and equipment manufacturers (17-Oct-16) EV/EBITDA

EV/S 2017

2015

2016

P/E

EBITDA margin

DY

Price

2015

2016

2017

2017

Famur

4.3

11.6

9.8

8.6

2.7

2.6

2.3

40.4

42.6

24.6

23%

27%

27%

0.0%

0.0%

1.0%

Kopex*

3.6

4.2

-

4.3

0.6

0.8

0.6

-

-

-

14%

-

15%

11.1%

0.0%

0.0%

7.9

9.8

6.4

1.6

1.7

1.5

40.4

42.6

24.6

18%

27%

21%

5.6%

0.0%

0.5%

POLISH COMPANIES

Median FOREIGN COMPANIES Atlas Copco

257.7

13.8

14.4

13.6

3.3

3.3

3.1

21.3

23.2

21.5

24%

23%

23%

2.5%

2.5%

2.7%

Caterpillar

87.3

12.0

16.6

15.6

1.7

2.0

2.1

19.1

24.7

24.3

14%

12%

13%

3.4%

3.5%

3.6%

Duro Felguera

1.08

-

6.2

5.3

0.3

0.3

0.3

-

12.7

7.6

-

5%

5%

6.0%

0.6%

2.0%

Joy Global

27.8

8.8

17.5

14.9

1.2

1.6

1.6

15.5

-

60.5

14%

9%

10%

2.9%

0.1%

0.1%

Sandvig AG

96.3

Median

12.8

10.4

9.9

1.7

1.9

1.9

19.0

19.6

17.8

14%

18%

19%

2.9%

2.7%

2.9%

12.4

14.4

13.6

1.7

1.9

1.9

19.0

21.4

21.5

14%

12%

13%

2.9%

2.5%

2.7%

Mining company valuations (17-Oct-16) EV/EBITDA

EV/S

EBITDA margin

P/E

DY

Price

2015

2016

2017

2015

2016

2017

2015

2016

2017

2015

2016

2017

2015

2016

2017

68.0

-

6.0

5.0

1.0

1.2

1.1

-

19.7

11.1

-

20%

23%

6.6%

2.9%

2.9%

POLISH COMPANIES KGHM FOREIGN COMPANIES Anglo American

10.1

6.4

6.7

6.6

1.5

1.6

1.5

16.1

12.6

14.9

23%

24%

23%

3.2%

0.0%

0.5%

BHP Billiton

11.9

4.0

8.0

6.8

1.7

3.1

2.9

8.3

58.2

23.9

44%

38%

43%

10.4%

2.6%

3.0% 0.0%

Freeport-McMoRan

9.5

9.2

7.4

6.1

2.4

2.4

2.4

-

20.6

8.9

26%

32%

39%

4.3%

0.0%

Rio Tinto

25.9

5.3

6.3

6.2

2.0

2.1

2.1

10.5

13.3

13.4

38%

34%

34%

8.6%

4.4%

4.1%

Southern CC

26.4

12.4

11.8

10.8

5.0

4.8

4.5

24.3

25.4

22.8

41%

41%

42%

1.3%

0.9%

1.2%

6.4

7.4

6.6

2.0

2.4

2.4

13.3

20.6

14.9

38%

34%

39%

4%

1%

1%

Median

Source: Dom Maklerski mBanku (Polish stocks and stocks marked with an asterisk), IBES/Bloomberg (foreign stocks)

7

European telecom valuations (17-Oct-16) EV/EBITDA Price

2015

2016

EV/S 2017

2015

2016

P/E 2017

2015

EBITDA margin

2016

DY

2017

2015

2016

2017

2015

2016

2017 8.3%

POLISH COMPANIES Netia

4.8

4.3

4.5

5.1

1.2

1.3

1.4

-

-

-

29%

28%

28%

12.4%

8.3%

Orange Polska

5.7

3.3

4.2

4.3

1.0

1.2

1.2

29.5

30.2

25.7

29%

29%

29%

8.7%

4.4%

4.4%

3.8

4.3

4.7

1.1

1.2

1.3

29.5

30.2

25.7

29%

29%

28% 10.6%

6.3%

6.3% 5.9%

Median MID CAPS Proximus Telefonica CP Hellenic Telekom Matav Telecom Austria

25.9

6.6

6.2

6.0

1.8

1.8

1.8

15.0

15.1

14.6

27%

29%

30%

5.7%

5.8%

225.6

7.2

7.4

7.5

1.9

2.0

1.9

13.9

14.3

14.6

27%

26%

26%

6.6%

7.0%

7.0%

7.9

3.8

4.0

3.9

1.3

1.3

1.3

13.9

15.7

13.4

35%

33%

34%

1.4%

1.8%

2.5% 6.9%

458.0

5.2

5.0

5.0

1.5

1.6

1.6

14.2

14.5

14.0

29%

32%

32%

3.3%

5.0%

5.2

4.6

4.6

4.6

1.5

1.5

1.5

10.4

11.8

11.6

33%

32%

32%

1.0%

2.4%

2.9%

5.2

5.0

5.0

1.5

1.6

1.6

13.9

14.5

14.0

29%

32%

32%

3.3%

5.0%

5.9% 4.1%

Median BIG CAPS BT

3.8

7.1

6.7

5.6

2.5

2.4

1.8

12.3

12.0

12.6

35%

35%

33%

3.3%

3.7%

DT

14.3

6.3

5.7

5.5

1.8

1.7

1.7

17.3

16.0

14.7

28%

30%

30%

3.7%

4.1%

4.5%

2.8

8.0

8.1

8.0

2.7

2.8

2.9

40.2

28.7

26.8

34%

35%

36%

3.9%

10.6%

4.8%

13.9

5.5

5.4

5.3

1.7

1.7

1.6

13.5

13.7

13.1

31%

31%

31%

4.4%

4.4%

4.7%

450.6

7.5

7.4

7.4

2.7

2.7

2.7

14.4

15.5

15.5

36%

37%

36%

4.9%

4.9%

4.9%

KPN Orange Swisscom Telefonica S.A.

8.8

7.0

6.6

6.3

2.2

2.1

2.0

14.1

13.6

11.6

31%

31%

32%

8.5%

8.5%

7.9%

Telia Company

38.3

9.3

9.0

8.9

2.7

2.7

2.7

10.9

12.4

12.3

29%

30%

31%

7.8%

5.5%

5.7%

TI

0.7

Median

6.0

5.7

5.5

2.2

2.4

2.4

15.6

13.6

13.1

38%

42%

43%

0.0%

0.0%

0.8%

7.1

6.7

5.9

2.4

2.4

2.2

14.2

13.7

13.1

33%

33%

33%

4.1%

4.6%

4.7%

2017

2015

2017

2015

2016

2017

Media company valuations (17-Oct-16) EV/EBITDA

EV/S

P/E

EBITDA margin

2016

2016

DY

Price

2015

2016

2017

2015

2016

2017

2015

Agora

10.7

5.1

6.8

6.5

0.5

0.6

0.6

40.3

-

-

10%

8%

9%

1.8%

7.0%

5.6%

Cyfrowy Polsat

23.9

7.1

7.4

7.2

2.7

2.7

2.6

13.1

16.8

14.7

38%

37%

36%

0.0%

0.0%

1.5%

6.1

7.1

6.8

1.6

1.6

1.6

26.7

16.8

14.7

0.2

0.2

0.2

0.0

0.0

0.0

POLISH COMPANIES

Median DAILY Arnolgo Mondadori

0.9

6.2

5.4

4.7

0.4

0.4

0.4

22.1

8.9

7.3

7%

7%

8%

0.0%

0.0%

1.3%

44.1

11.4

10.9

10.1

2.0

1.9

1.9

19.0

17.6

16.9

17%

18%

18%

4.2%

4.2%

4.4%

Daily Mail

7.3

10.0

10.2

9.3

1.8

1.8

1.7

12.9

13.9

12.8

18%

17%

18%

3.0%

3.1%

3.2%

Gruppo Editorial

0.7

5.1

5.6

4.9

0.5

0.5

0.5

12.1

14.8

10.8

10%

10%

10%

4.4%

2.9%

3.6%

Axel Springer

Naspers

226.2

-

-

-

16.5

19.0

16.7

-

-

59.4

9%

10%

10%

0.2%

0.2%

0.2%

11.4

8.4

9.3

9.0

1.5

1.5

1.5

18.1

18.8

17.1

18%

16%

16%

1.4%

1.4%

1.4%

Promotora de Inform

6.3

9.4

8.1

7.3

1.6

1.6

1.6

16.3

12.4

7.5

17%

20%

22%

0.0%

-

-

SPIR Comm

4.5

-

-

6.9

0.1

0.1

0.1

-

-

-

-

-

2%

-

-

-

Trinity Mirror

0.9

New York Times

Median

2.0

1.5

1.5

0.4

0.3

0.4

2.8

2.5

2.6

21%

22%

23%

5.6%

6.5%

7.0%

8.4

8.1

7.1

1.5

1.5

1.5

16.3

13.9

11.8

17%

17%

16%

2.2%

2.9%

3.2% 6.4%

TV Atresmedia Corp Gestevision Telecinco ITV PLC M6-Metropole Tel Mediaset SPA Modern Times

9.5

13.9

11.3

10.0

2.3

2.2

2.1

20.0

15.2

13.2

17%

20%

21%

3.9%

5.5%

10.3

15.4

12.6

11.4

3.4

3.2

3.1

21.5

18.4

15.9

22%

25%

27%

4.1%

5.1%

5.8%

1.7

8.3

8.1

8.0

2.5

2.4

2.3

10.8

10.3

10.3

30%

29%

29%

3.4%

4.3%

5.4%

15.7

5.8

6.2

5.8

1.4

1.4

1.4

16.8

16.0

14.6

25%

23%

24%

5.5%

5.7%

5.9%

2.7

3.6

3.3

3.3

1.3

1.3

1.3

-

22.6

17.2

37%

40%

38%

0.9%

2.0%

3.9%

225.0

13.5

10.9

9.5

1.0

1.0

0.9

16.5

16.3

14.0

8%

9%

10%

4.9%

5.3%

5.5%

Prosieben

37.8

11.0

10.1

9.4

3.1

2.7

2.5

16.8

15.3

14.0

29%

27%

27%

4.8%

5.3%

5.8%

RTL Group

71.3

9.1

8.8

8.5

2.0

2.0

1.9

14.7

14.3

13.7

22%

22%

22%

6.1%

5.8%

5.8%

8.0

5.2

4.7

3.5

0.5

0.5

0.4

19.7

21.9

14.4

9%

10%

13%

6.0%

3.8%

4.8%

8.7

8.5

8.3

1.7

1.7

1.6

16.8

16.1

14.2

23%

24%

25%

4.8%

5.2%

5.6% 4.1%

TF1-TV Francaise Median PAY TV Sky PLC

8.4

9.9

8.9

9.2

1.8

1.7

1.5

15.5

13.4

14.7

18%

19%

17%

3.9%

4.0%

Cogeco

62.5

6.2

5.9

5.8

2.8

2.7

2.6

11.9

12.2

11.3

46%

45%

45%

2.2%

2.5%

2.7%

Comcast

65.0

8.4

7.8

7.4

2.8

2.6

2.5

19.9

18.5

16.8

33%

33%

34%

1.5%

1.7%

1.9%

Dish Network

56.7

13.2

12.5

13.0

2.6

2.6

2.6

26.2

18.7

20.4

20%

21%

20%

0.0%

0.0%

0.0%

Liberty Global

31.2

8.8

8.6

9.1

4.1

4.1

4.2

-

-

-

47%

47%

46%

0.0%

0.0%

0.0%

Shaw Communications

19.9

Median

6.5

7.2

7.0

2.8

3.1

2.9

11.5

14.5

14.5

43%

43%

42%

5.7%

6.0%

6.0%

8.6

8.2

8.2

2.8

2.6

2.6

15.5

14.5

14.7

38%

38%

38%

1.9%

2.1%

2.3%

Source: Dom Maklerski mBanku (Polish stocks), IBES/Bloomberg (foreign stocks)

8

IT company valuations (17-Oct-16) EV/EBITDA Price

2015

2016

EV/S 2017

2015

2016

P/E 2017

EBITDA margin

2015

2016

2017

2015

2016

DY

2017

2015

2016

2017 2.8%

POLISH COMPANIES AB*

32.4

7.2

7.1

6.8

0.1

0.1

0.1

7.7

8.3

8.2

2%

2%

2%

2.2%

2.4%

ABC Data*

2.1

5.9

8.4

7.7

0.1

0.1

0.1

5.3

-

-

1%

1%

1%

18.2%

-

-

Action*

6.1

4.8

6.7

6.1

0.1

0.1

0.1

2.6

6.4

4.0

1%

1%

1%

18.1%

16.5%

13.8%

Asseco Poland Comarch*

52.0

7.2

6.8

6.4

1.0

0.9

0.9

11.8

13.8

12.8

14%

13%

13%

5.6%

5.8%

5.9%

189.0

8.9

9.4

8.3

1.3

1.3

1.2

19.2

23.6

17.7

15%

14%

14%

0.0%

0.0%

2.6%

5.9

1.8

4.0

2.9

0.2

0.2

0.2

3.2

10.4

3.2

9%

5%

6%

-

-

-

6.5

6.9

6.6

0.1

0.1

0.1

6.5

10.4

8.2

5%

3%

4%

5.6%

4.1%

4.3%

Sygnity* Median FOREIGN COMPANIES Atos Origin

94.6

7.8

7.0

6.5

0.9

0.8

0.8

17.2

13.7

12.6

11%

12%

12%

0.9%

1.3%

1.5%

CapGemini

80.6

10.8

9.3

8.6

1.3

1.2

1.2

18.2

15.1

13.9

12%

13%

14%

1.7%

1.8%

2.0%

154.8

8.4

9.4

8.8

2.2

2.2

2.2

10.4

11.5

11.0

26%

24%

26%

3.2%

3.5%

3.6%

Indra Sistemas

11.4

22.3

12.0

9.7

1.0

1.0

1.0

-

21.6

14.0

4%

9%

10%

0.0%

0.0%

1.0%

Microsoft

57.2

11.2

10.9

10.4

4.0

4.1

3.9

22.0

21.5

19.7

36%

37%

38%

2.1%

2.5%

2.7%

Oracle

38.3

7.0

8.7

8.4

3.8

3.9

3.8

13.4

14.6

13.8

53%

45%

45%

1.3%

1.5%

1.6% 1.7%

IBM

SAP

78.4

14.0

12.9

12.9

5.0

4.7

4.4

21.1

20.3

18.2

35%

36%

34%

1.5%

1.6%

TietoEnator

25.5

10.3

9.5

8.9

1.3

1.3

1.2

16.8

15.6

14.9

13%

13%

14%

5.1%

5.0%

5.1%

10.6

9.4

8.8

1.7

1.8

1.7

17.2

15.4

13.9

19%

19%

20%

1.6%

1.7%

1.9%

2017

2015

2016

2017 6.0%

Median

Construction company valuations (17-Oct-16) EV/EBITDA Price

2015

2016

EV/S 2017

2015

2016

P/E

EBITDA margin

2017

2015

2016

2017

2015

2016

DY

POLISH COMPANIES Budimex

210.1

9.6

7.3

6.7

0.6

0.5

0.5

22.7

16.7

14.6

6%

7%

7%

2.9%

3.9%

Elektrobudowa

102.6

5.5

5.0

4.6

0.3

0.4

0.4

9.7

8.8

8.6

6%

8%

8%

0.0%

3.9%

6.8%

Elektrotim

13.0

3.0

6.3

5.0

0.2

0.3

0.3

6.0

16.1

10.0

8%

5%

6%

4.6%

9.6%

6.9%

Erbud

29.0

4.9

5.1

4.8

0.2

0.2

0.2

13.3

10.4

9.5

4%

4%

4%

1.7%

4.1%

4.8%

3.8

4.1

6.0

5.6

1.6

1.9

1.8

5.1

9.7

9.5

40%

31%

32%

1.6%

4.2%

4.7%

11.5

0.4

8.2

6.5

0.0

0.3

0.3

8.3

28.2

17.2

5%

4%

5%

4.3%

6.0%

2.6% 3.1%

Herkules Torpol Trakcja

13.0

5.4

6.8

6.5

0.4

0.5

0.4

13.3

11.5

11.4

7%

7%

6%

0.0%

2.6%

Ulma Construccion

59.0

3.9

3.8

3.2

1.3

1.3

1.2

56.3

22.1

14.6

34%

35%

36%

0.0%

0.0%

1.7%

Unibep

10.7

10.4

7.0

5.8

0.3

0.3

0.2

15.9

11.3

9.1

3%

4%

4%

1.4%

1.6%

2.8%

ZUE

9.0

1.8

8.6

6.3

0.1

0.4

0.3

12.0

29.2

16.2

6%

4%

5%

0.0%

3.6%

2.1%

4.5

6.6

5.7

0.3

0.4

0.4

12.7

13.8

10.7

6%

6%

6%

1.5%

3.9%

3.9%

68.8

8.2

8.3

7.8

1.4

1.6

1.5

21.4

19.9

17.7

18%

19%

19%

3.0%

3.6%

3.9%

3.4

4.1

3.9

3.9

0.5

0.5

0.4

3.4

4.3

3.3

12%

12%

11%

6.3%

5.8%

7.0% 4.2%

Median FOREIGN COMPANIES ACCIONA ASTALDI FERROVIAL HOCHTIEF MOTA ENGIL

18.2

18.4

21.1

19.8

2.1

2.0

1.9

24.6

30.4

28.3

11%

10%

10%

3.9%

4.0%

123.1

8.5

8.2

7.8

0.4

0.5

0.4

32.3

24.6

22.1

5%

6%

6%

1.6%

1.9%

2.2%

1.9

6.6

6.8

6.3

1.0

1.0

1.0

18.6

7.1

9.0

15%

15%

15%

3.9%

2.7%

2.7% 3.9%

NCC

225.0

9.3

12.4

11.2

0.5

0.6

0.6

13.0

17.3

15.4

6%

5%

5%

5.6%

3.6%

SKANSKA

200.8

10.6

9.8

10.0

0.5

0.5

0.5

19.4

15.2

16.1

5%

5%

5%

3.5%

3.9%

4.0%

STRABAG

29.7

4.1

3.8

3.8

0.2

0.2

0.2

17.5

12.7

12.3

6%

6%

6%

2.3%

3.3%

3.4%

8.3

8.2

7.8

0.5

0.6

0.5

19.0

16.2

15.7

9%

8%

8%

3.7%

3.6%

3.9%

2015

2016

2017

2015

2016

2017

2015

2016

Median

Real-estate developers (17-Oct-16) EV/EBITDA Price

P/BV

P/E

EBITDA margin

DY

2015

2016

2017

2015

2016

2017

2017

0.9

-

17.3

14.6

0.4

0.4

0.4

-

12.8

9.5

-

18%

38%

0.0%

0.0%

0.0%

60.0

15.5

9.6

8.0

1.7

1.6

1.6

18.4

11.8

9.9

12%

14%

17%

3.7%

5.4%

8.5% 0.0%

POLISH COMPANIES BBI Development Dom Development Echo Investment

4.8

5.7

15.0

12.6

0.5

1.1

1.0

3.8

8.8

8.2

156%

47%

56%

0.0%

111%

GTC

8.1

15.1

13.8

7.5

1.3

1.2

1.0

19.1

11.1

5.0

79%

96%

169%

0.0%

0.0%

0.0%

J.W. Construction

4.7

22.6

7.4

8.7

0.7

0.6

0.6

-

6.1

7.6

17%

22%

19%

0.0%

0.0%

0.0%

PA Nova

23.5

16.9

10.7

8.9

0.8

0.7

0.7

13.1

7.8

6.9

26%

35%

38%

2.1%

3.2%

4.3%

Polnord

8.9

-

33.1

21.8

0.4

0.4

0.4

-

21.3

11.3

-

8%

8%

0.0%

0.0%

0.0%

Robyg

3.0

17.6

8.6

9.3

1.6

1.5

1.4

9.8

9.3

9.9

13%

20%

20%

3.7%

6.7%

7.4%

Ronson

1.4

19.1

9.7

11.1

0.8

0.8

0.7

19.0

9.2

11.0

10%

14%

14%

3.0%

5.9%

4.4%

16.9

10.7

9.3

0.8

0.8

0.7

15.8

9.3

9.5

17%

20%

20%

0%

3%

0% 7.6%

Median FOREIGN COMPANIES Atrium European RE

3.8

15.1

14.7

14.0

0.6

0.7

0.7

12.5

10.7

10.7

71%

62%

75%

7.1%

7.1%

CA Immobilien Anlagen

16.2

19.2

21.1

19.9

0.8

0.8

0.7

19.9

11.6

12.9

88%

59%

61%

3.1%

3.5%

3.9%

Deutsche Euroshop AG

39.1

19.6

19.4

19.2

1.4

1.2

1.1

17.8

16.1

16.5

87%

89%

89%

3.5%

3.6%

3.7%

1.9

18.3

37.3

34.8

0.4

0.5

0.6

19.2

31.2

23.1

62%

55%

49%

5.2%

3.1%

3.3%

38.1

22.7

21.8

20.9

1.3

1.1

1.1

17.7

16.9

15.9

82%

83%

83%

4.5%

4.7%

4.9%

Immofinanz AG Klepierre Segro Unibail Rodamco SE Median

4.3

25.3

24.7

23.1

1.2

1.0

0.9

23.9

22.4

21.3

79%

75%

76%

3.6%

3.7%

3.9%

223.3

25.9

24.7

24.2

1.4

1.3

1.2

18.3

20.0

19.1

93%

88%

87%

4.3%

4.5%

4.8%

19.6

21.8

20.9

1.2

1.0

0.9

18.3

16.9

16.5

82%

75%

76%

4.3%

3.7%

3.9%

Source: Dom Maklerski mBanku (Polish stocks), IBES/Bloomberg (foreign stocks and stocks marked with an asterisk)

9

OTP and Komercni's relative performance vs. WIG Banks (EUR)

WIG Banks vs. WIG20 (EUR) 475

1600

450

1450

425

1300

400

1150 WIG Banks OTP relative Komercni relative

WIG Banks relative WIG20 375 2016/07/26

2016/08/21

2016/09/16

2016/10/12

BRENT (USD/bbl)

1000 2016/07/26

2016/08/21

2016/09/16

2016/10/12

NWE BRENT NWE 3:2:1 crack spread (USD) 14

55 BRENT 50

11

45

8

40

5 MARGIN BRENT/NWE 3:2: 1

35 2016/07/26

2016/08/21

2016/09/16

2016/10/12

Orange Polska vs. BETELES - Bloomberg Europe 500 Telecom Services Index (EUR)

2 2016/07/26

2016/10/12

Incumbent telecoms: Orange Polska (PL) vs. Magyar Telecom (HU) and Telefonica (CZ) (EUR) Matav relative

Orange Polska relative

Telefonica relative

BETELES

Orange Polska

175

1.40

160

1.30

145

1.20

10

2016/09/16

1.50

190

130 2016/07/26

2016/08/21

2016/08/21

2016/09/16

2016/10/12

1.10 2016/07/26

2016/08/21

2016/09/16

2016/10/12

WIG Media vs. WIG20 (EUR)

WIG IT vs. MSCI

550

550 WIG IT

WIG Media relative WIG20

MSCI relative

500

500

450

450

400

400

350 2016/07/26

2016/08/21

2016/09/16

2016/10/12

WIG Construction vs. WIG20 (EUR)

350 2016/07/26

WIG Developers relative

WIG20

WIG20

450

450

425

425

400

400

2016/08/21

2016/09/16

2016/10/12

LME copper prices

375 2016/07/26

2016/08/21

2016/09/16

2016/10/12

2016/09/16

2016/10/12

KGHM vs. sector (USD)

5250

250 Mining & Metal

3M

KG HM relative

5000

225

4750

200

4500

175

4250 2016/04/21

2016/10/12

475 WIG Construction relative

U SD /t

2016/09/16

WIG Developers vs. WIG20 (EUR)

475

375 2016/07/26

2016/08/21

2016/06/18

2016/08/15

2016/10/12

150 2016/07/26

2016/08/21

11

List of abbreviations and ratios contained in the publication: OVERWEIGHT (OW) – a rating which indicates that we expect the stock to outperform the broad market NEUTRAL (N) – a rating which indicates that we expect the stock to perform in line with the broad market UNDERWEIGHT (UW) – a rating which indicates that we expect the stock to underperform the broad market EV – net debt + market value EBIT – Earnings Before Interest and Taxes EBITDA – EBIT + Depreciation and Amortisation P/CE – price to earnings with amortisation MC/S – market capitalisation to sales EBIT/EV – operating profit to economic value P/E – (Price/Earnings) – price divided by annual net profit per share ROE – (Return on Equity) – annual net profit divided by average equity P/BV – (Price/Book Value) – price divided by book value per share Net debt – credits + debt papers + interest bearing loans – cash and cash equivalents EBITDA margin – EBITDA/Sales Recommendations of Dom Maklerski mBanku: A recommendation is valid for a period of 6-9 months, unless a subsequent recommendation is issued within this period. Expected returns from individual recommendations are as follows: BUY – we expect that the rate of return from an investment will be at least 15% ACCUMULATE – we expect that the rate of return from an investment will range from 5% to 15% HOLD – we expect that the rate of return from an investment will range from –5% to +5% REDUCE – we expect that the rate of return from an investment will range from -5% to -15% SELL – we expect that an investment will bear a loss greater than 15% Recommendations are updated at least once every nine months. mBank S.A. with its registered office in Warsaw at Senatorska 18 renders brokerage services in the form of derived organisational unit – Brokerage Office which uses name Dom Maklerski mBanku. The present report expresses the knowledge as well as opinions of the authors on day the report was prepared. The opinions and estimates contained herein constitute our best judgment at this date and time, and are subject to change without notice. The present report was prepared with due care and attention, observing principles of methodological correctness and objectivity, on the basis of sources available to the public, which Dom Maklerski mBanku considers reliable, including information published by issuers, shares of which are subject to recommendations. However, Dom Maklerski mBanku, in no case, guarantees the accuracy and completeness of the report, in particular should sources on the basis of which the report was prepared prove to be inaccurate, incomplete or not fully consistent with the facts. This document does not constitute an offer or invitation to subscribe for or purchase any financial instruments and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. It is being furnished to you solely for your information and may not be reproduced or redistributed to any other person. This document nor any copy hereof is not to be distributed directly or indirectly in the United States, Australia, Canada or Japan. Recommendations are based on essential data from the entire history of a company being the subject of a recommendation, with particular emphasis on the period since the previous recommendation. Investing in shares is connected with a number of risks including, but not limited to, the macroeconomic situation of the country, changes in legal regulations as well as changes on commodity markets. Full elimination of these risks is virtually impossible. mBank S.A. bears no responsibility for investment decisions taken on the basis of the present report or for any damages incurred as a result of investment decisions taken on the basis of the present report. It is possible that mBank S.A. in its brokerage activity renders, will render or in the past has rendered services for companies and other entities mentioned in the present report. mBank S.A. does not rule out offering brokerage services to an issuer of securities being the subject of a recommendation. Information concerning a conflict of interest arising in connection with issuing a recommendation (should such a conflict exist) is located on the final page of this report. mBank S.A., its shareholders and employees may hold long or short positions in the issuers’ shares or other financial instruments related to the issuers’ shares. mBank, its affiliates and/or clients may conduct or may have conducted transactions for their own account or for account of another with respect to the financial instruments mentioned in this report or related investments before the recipient has received this report. Copying or publishing the present report, in full or in part, or disseminating in any way information contained in the present report requires the prior written agreement of mBank S.A. Recommendations are addressed to all Clients of Dom Maklerski mBanku. The activity of mBank S.A. is subject to the supervision of the Polish Financial Supervision Commission. mBank S.A. serves as underwriter for the following issuers: Asseco Business Solutions, Bakalland, BOŚ, Capital Park, Erbud, Ergis, Es-System, IMS, Kruk, Magellan, Mieszko, Neuca, Oponeo, PBKM, Pemug, Polimex Mostostal, Polna, Solar, Tarczyński, Vistal, ZUE. mBank S.A. serves as market maker for the following issuers: Asseco Business Solutions, Bakalland, BOŚ, Capital Park, Erbud, Es-System, IMS, KGHM, Kruk, LW Bogdanka, Magellan, Mieszko, Neuca, Oponeo, PBKM, PGE, Pekao, PKN Orlen, PKO BP, Polimex Mostostal, Polna, Polwax, PZU, Solar, Tarczyński, Vistal, ZUE. mBank S.A. receives remuneration from issuers for services rendered to the following companies: Agora, Alior Bank, Alchemia, Ambra, Bakalland, BNP Paribas, Boryszew, BPH, mBank, BZ WBK, Deutsche Bank, Elemental Holding, Elzab, Enea, Energoaparatura, Erbud, Erste Bank, Es-System, Farmacol, Ferrum, Getin Holding, Handlowy, Impexmetal, Indata Software, ING BSK, Inter Groclin Auto, Ipopema, Koelner, Kopex, Kruk, LW Bogdanka, Magellan, Mennica, Mercor, Mieszko, Millennium, Mostostal Warszawa, Netia, Neuca, Odratrans, Oponeo, Orbis, OTP Bank, Paged, PA Nova, PBKM, Pekao, Pemug, Pfleiderer Grajewo, PGE, PGNiG, PKO BP, PolimexMostostal, Polnord, PRESCO GROUP, Prochem, Projprzem, Prokom, PZU, RBI, Robyg, Rubikon Partners NFI, Seco Warwick, Skarbiec Holding, Sokołów, Solar, Stelmet, Sygnity, Tarczyński, Techmex, TXN, Unibep, Uniwheels, Vistal, Wirtualna Polska Holding S.A., Work Service, ZUE. In the last 12 months mBank S.A. has been an offering agent of the issuer’s shares in a public offering for the following companies: HTL Strefa, PBKM, Stelmet. Asseco Poland provides IT services to mBank S.A. mBank S.A. has a cash service agreement in place with Pekao and a phone subscription agreement in place with Orange Polska S.A. Individuals who did not participate in the preparation of recommendations, but had or could have had access to recommendations prior to their publication, are employees of Dom Maklerski mBanku authorised to access the premises in which recommendations are prepared and/or individuals having to access to recommendations based on their corporate roles, other than the analysts mentioned as the authors of the present recommendations. Strong and weak points of valuation methods used in recommendations: DCF – acknowledged as the most methodologically correct method of valuation; it consists in discounting financial flows generated by a company; its weak point is the significant susceptibility to a change of forecast assumptions in the model. Comparative – based on a comparison of valuation multipliers of companies from a given sector; simple in construction, reflects the current state of the market better than DCF; weak points include substantial variability (fluctuations together with market indices) as well as difficulty in the selection of the group of comparable companies. Economic profits – discounting of future economic profits; the weak point is high sensitivity to changes in the assumptions made in the valuation model. Discounted Dividends (DDM) – discounting of future dividends; the weak point is high sensitivity to changes in the assumptions as to future dividends made in the valuation model. NAV – valuation based on equity value, one of the most frequently used method in case of developing companies; the weak point of the method is that it does not factor in future changes in revenue/profits of a company.

12

Dom Maklerski mBanku Senatorska 18 00-082 Warszawa http://www.mbank.pl/

Research Department Kamil Kliszcz

Michał Marczak

Michał Konarski

director

tel. +48 22 438 24 01 [email protected] strategy, resources, metals

tel. +48 22 438 24 05 [email protected] banks, financials

Jakub Szkopek

Paweł Szpigiel

Piotr Zybała

tel. +48 22 438 24 03 [email protected] industrials, chemicals

tel. +48 22 438 24 06 [email protected] media, IT, telco

tel. +48 22 438 24 04 [email protected] construction, real-estate development

Piotr Gawron

Krzysztof Bodek

Mateusz Choromański, CFA

director

tel. +48 22 697 48 89 [email protected]

tel. +48 22 697 47 44 [email protected]

Tomasz Jakubiec

Anna Łagowska

Adam Prokop

tel. +48 22 697 47 31 [email protected]

tel. +48 22 697 48 25 [email protected]

tel. +48 22 697 47 90 [email protected]

Szymon Kubka, CFA, PRM

Jędrzej Łukomski

Tomasz Galanciak

tel. +48 22 697 48 16 [email protected]

tel. +48 22 697 49 85 [email protected]

tel. +48 22 697 49 68 [email protected]

tel. +48 22 438 24 02 [email protected] energy, chemicals, power generation

Piotr Bogusz tel. +48 22 438 24 08 [email protected] retail

Sales and Trading Traders

tel. +48 22 697 48 95 [email protected]

Wojciech Wysocki tel. +48 22 697 48 46 [email protected]

Sales, Foreign Markets Marzena Łempicka-Wilim

Mariusz Adamski

deputy director

tel. +48 22 697 48 47 [email protected]

tel. +48 22 697 48 82 [email protected]

Private Broker Kamil Szymański

Jarosław Banasiak

director, active sales

deputy director, active sales

tel. +48 22 697 47 06 [email protected]

tel. +48 22 697 48 70 [email protected]

13