Safe Heaven in Current Markets

Nova Ljubjanska Banka
  • It is the largest Slovenian bank.
  • In 2013 taken over by the Slovenian Government, fully restructured and recapitalized
  • IPO closed last week. Launched at 51.5 Euro per share, now trading at 56.6.
  • Just spoke to Wood analyst (I can get you his contact details). He called the stock “Safety Heaven in current markets”. The reason is it is still very cheap. 
  • NLB now trades at 0.7 P/B. With RoE of 18%  and Div Yield at 12% it should trade at least around 1.1 P/B. That is what Wood analyst thinks. The reason for this is simple – there is no research coverage, yet. The syndicate members (JP Morgan, Citigroup, Deutsche and Wood) are in blackout period (until 20/12) – they can issue research only after that date. There are three catalysts in pipeline which should help to rerate the stock:

    • There is a CEE Equities conference early December organized by local broker Wood and Co in Prague. 150 CEE oriented investors are attending and NBL is one of the presented companies. Last year I saw 30% price increase on similar situations during the conference
    • The research reports will be published on 20/12
The prospectus and other documents can be found here: https://www.nlb.si/public-offering-of-shares-prospectus
 Peers ratios for comparison
peers
NLB Valuation based on Peers
Per share data
EUR
NAV 30/6/18 89,85
Dividend paid 13,5
Earnings 2H18 5
NAV E2018 81,35
Share price 56,5
Price to book 0,69
Net profit 2018E 10
Yield 18%
payout ratio 70%
Dividend yield 12%
P/E 2018E 5,7
RoE 2018 14%
Target P/BV Price per share
0,9 73
1 81
1,1 90
1,2 98
1,3 106
1,4 114
1,5 122

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