The Point for CEEMEA_ Thursday, 12 December 2024

Summary of Key Points from the Conference Call Industry and Company Overview - Companies Discussed: Tiger Brands Ltd (TBSJ.J), Standard Bank (SBKJ.J), Hepsiburada (HEPS.O), Orlen SA (PKN.WA), LPP SA (LPPP.WA) - Industries: Bakery, Banking, E-commerce, Oil & Gas, Retail Core Insights and Arguments Tiger Brands Ltd (TBSJ.J) - Market Share vs. EBIT Margins: Pursuing best-in-class market share can negatively impact EBIT margins, as seen with Tiger Brands and Pioneer Foods. In contrast, stable market share can lead to stable or expanding EBIT margins, as demonstrated by Premier Foods [8] - Asset Disposals: Expected to raise approximately R4.2 billion in FY 25e from the sale of various assets, supporting a special dividend of R3.1 billion and enhancing ROIC [8] - Target Price Adjustment: Target price increased by approximately 10% to R295 per share, indicating a potential upside of 15.7% [8] Standard Bank (SBKJ.J) - Earnings Downgrade: Earnings estimates cut by 8-9% per annum due to currency headwinds affecting financial results across various African regions [8] - Target Price Reduction: Target price lowered from R260 to R250, but still maintains a Buy rating due to expected earnings rebound next year [8] Hepsiburada (HEPS.O) - Growth Metrics: Reported 3Q24 GMV growth of 70% YoY, with a 10% increase in real terms. EBITDA margin in line with guidance at 2.2% [16] - Future Outlook: Anticipates GMV growth to moderate to 50-55% in 4Q24, with a constructive outlook for 2H25 due to expected rate cuts [16] - Target Price Update: Target price raised to USD 4.8 from USD 4.4, maintaining a Buy rating [16] Orlen SA (PKN.WA) - Project Capex Adjustment: Adjusting the Olefin III project capex from ZL45-51 billion to ZL34 billion, which includes ZL6 billion in interest and ZL12.6 billion already spent [17] - EBITDA Contribution: Estimated EBITDA contribution from the project in 2030 is projected to be between ZL550-800 million [17] LPP SA (LPPP.WA) - 3Q24 Performance: Net profit of ZL579 million, which is 9% below consensus expectations, driven by softer sales and lower margins [17] - Revenue Growth: Revenues increased by 20% YoY to ZL5.2 billion, but were still below consensus [17] - 2025 Guidance: Strong guidance for 2025, expecting growth acceleration with space expansion of 35-40% [17] Additional Important Insights - Sector Outlook: The European diversified metals and mining sector is viewed positively for 2025, contingent on stimulus timing in China and trade war developments [17] - Payments Sector: Positive outlook for e-commerce payments, particularly for Adyen, while caution is advised in other FinTech areas [17] - European Airlines: Capacity moderation noted at Wizz, with ongoing updates on air travel supply and demand [17] - Global Shipping: Freight capacity growth of 5% YoY in December, with strong air freight rates [17] This summary encapsulates the key points discussed in the conference call, highlighting the performance and outlook of the companies and industries involved.