Equity Weekly

Equity Research - Monday, November 16, 2009

Index value Weekly Change,% Weekly Turnover

Baltic Indices
390 Estonia 408.6 -0.64% €3,3m

360 The activity in Tallinn Stock Exchange was quiet. The turnover reached €3.3m
and the index ended the week at 408.6 points. Small institutional activity was
seen in Tallinna Vesi AS. Also, a slight selling pressure by institutions was
330
recorded in Nordecon International.

300
Latvia 288 -5.05% €0,3m
270
Market activity was a bit higher than usual however there was not seen clear
240
market direction in Riga. Grindeks was in the market participants spot light due
13-Aug 27-Aug 10-Sep 24-Sep 8-Oct 22-Oct 5-Nov
to disappointing third quarter results which led share price 25% lower. Meanwhile
SAF Tehnika increased by more than 25% after news that shareholders meeting
Baltic Benchmark OMX Tallinn*
OMX Riga* OMX Vilnius*
approved dividend payout of LVL 0.23 per share which is 39.7% dividend yield at
* Relativ e to Baltic Benchmark Source: Reuters, Swedbank pre-announcement price and 31.5% yield at Fridays close price.

Last Weekly Weekly P/E P/BV Lithuania 271.1 -2.03% €2,7m

Estonia (in €) Close Change Volume Trail. 4Q 09F Last Q 09F
Arco Vara 0.20  5.3% 458382 -0.3 9.5 0.4 0.4
Baltika 0.74  2.8% 85409 -1.7 -2.0 1.1 1.2
Eesti Telekom 5.94 0.0% 45499 10.1 16.7 4.0 4.9
The Lithuanian market remained quiet as well. The weekly turnover reached
Ekspress Grupp 1.03  -1.9% 53414 -4.5 -4.3 0.6 0.6
€2.7m and the index closed at 271.1 points last week. A selling interest by
Harju Elekter 2.38 0.0% 7258 37.6 30.3 1.4 1.6 institutions was recorded in Apranga and Invalda.
Järvevana 0.45  18.4% 35308
Merko Ehitus 5.19  0.4% 26476 18.1 -74.3 0.7 0.7
Nordecon International 1.56  1.3% 222520 83.8 -29.4 0.9 1.1
Norma 3.95
Olympic Entertainment Group 0.71
 2.1%
 6.0%
6414
412277
38.4
-1.9
-38.8
-4.9
0.9
1.2
0.9
1.2
Estonia
Silvano Fashion Group 0.68 0.0% 16669 -2.4 -17.9 0.9 0.7
Tallink
Tallinna Kaubamaja
0.37
3.75
 -5.1%
 0.3%
2904513
39529
-30.5
-44.8
7.3
-13.2
0.4
1.3
0.4
1.5
Nordecon International posted Q3 results last week which were above our
Tallinna Vesi 10.20  -1.9% 74046 10.4 9.9 2.5 2.3 expectations. Total sales of the company amounted to €47m in Q3 2009,
Viisnurk 0.85  4.9% 4550 253.5 5.3 0.8 0.8 down by 29.4% Y-o-Y. The cumulative revenue for the 9M 2009 reached
Last Weekly Weekly P/E P/BV
€126m, down by 32.7% Y-o-Y. The net profit dropped by almost 43% Y-o-Y
Latvia (in LVL) Close Change Volume Trail. 4Q 09F Last Q 09F
Grindeks 3.25  -25.3% 11557 2.9 4.7 0.4 0.6
to €2.6m in Q3 2009.
Latvian Gas 4.45  -12.4% 2308 8.7 0.6
Latvian Shipping Company
Latvijas Balzams
0.43
1.79
 -2.3%
 -0.6%
90787
432
1.6
6.0
1.2 0.2
0.4
0.2
Latvia
Liepajas Metalurgs 1.21  0.8% 474 1.1 0.3
Olainfarm 0.97  3.2% 19019 98.6 9.0 0.9 0.8
No Corporate News.
SAF Tehnika 0.73  25.9% 38083 -2.5 1.1 0.3 0.2

Lithuania
Valmiera Fibre Glass 0.47 0.0% 6984 0.9 0.4
Ventspils Nafta 1.35 0.0% 36646 3.9 0.4

Last Weekly Weekly P/E P/BV

Lithuania (in LT L) Close Change Volume Trail. 4Q 09F Last Q 09F
Apranga 2.36  6.8% 200012 18.2 -3.5 1.0 0.9 Vilkyskiu pienine October sales amounted to LTL 16.2m (EUR 4.7m) or
City Service 7.37  4.1% 10167 12.8 8.8 2.2 1.8
8.5% more than for the same period last year. The sales of the company for
Grigiskes 1.02  7.4% 61060 -13.4 0.9
Invalda 2.00  1.0% 182460 -0.7 0.6
period January – October 2009 comprised LTL 131m (EUR 37.9m) down
Klaipedos Nafta 0.96  1.1% 26813 12.2 0.8 1% yoy.
Lietuvos Dujos 2.32  -2.5% 13235 27.3 17.4 0.6 0.5
Lietuvos Energija 2.80  -1.8% 6556 -53.5 0.7 From November 13, 2009, a mandatory tender offer to buy Dvarcioniu
Lietuvos Juru Laivininkyste 0.47  -6.0% 61417 -2.3 0.4 keramika (ISIN code LT0000122319) is launched. The closing date for
Lifosa 26.75  2.5% 7522 3.5 0.7 execution of the tender offer is November 26, 2009. The price per share is
Panevezio Statybos Trestas 3.41  -5.3% 296359 1.9 0.5
Pieno Zvaigzdes 3.00  1.7% 2889 19.3 5.4 1.1 1.0
LTL 2.01.
Rokishkio Suris 3.00  1.7% 21167 -13.3 0.7
RST 1.91  -7.3% 134732 -10.8 0.4
Zemaitijos Pienas for the nine months delivered sales of LTL 277.1m (EUR
Sanitas 9.49  -1.1% 20839 -11.6 1.2 80.3m), in comparison with the nine moths of 2008 the sales decreased by
Siauliu Bankas 1.04  -3.7% 189424 4.2 0.6 23.3%. The unaudited consolidated net profit for the nine months of 2009 is
Snaige 0.70  2.9% 132866 -0.6 0.4
equal to LTL 5.9m (EUR 1.7m), whereas in the nine months of 2008 the
Snoras 1.07  -1.8% 204193 1.5 0.5
TEO LT 1.82  -2.2% 2647088 8.6 8.5 1.4 1.4
company experienced a loss of LTL 8.3m (EUR 2.4m).
Ukio Bankas 1.15  -0.9% 553191 1.3 0.5
Source: Reuters, Swedbank

Attention: Please note important background and customer information at the end of this report

Equity Research – Swedbank Markets Page 1 of 5

 Equity Weekly – November 16, 2009

Investor Calendar:
Date Description
Estonia
No Corporate News

Latvia
16.11.2009 OLK1R - 9M 2009 non-audited financial report
16.-20.11.2009 ELG - 9M non-audited financial report
19.11.2009 VNF1R - Extraordinary General Meeting
20.11.2009 NKA1R - 9M non-audited financial report
20.11.2009 VNF1R - Extraordinary General Meeting
23.11.2009 LME1R - 9M non-audited financial report

Lithuania
16.11.2009 LFO1L - Sales revenue in October 2009
16.11.2009 VBL1L - Consolidated financial statements for 9M 2009

Source: NASDAQ OMX

Attention: Please note important background and customer information at the end of this report

Equity Research – Swedbank Markets Page 2 of 4

 Equity Weekly – November 16, 2009

Swedbank Markets Baltic Equity research & Institutional sales:

Energy, Materials & Utilities Industrials Equity Sales
Pavel Lupandin Estonia Risto Hunt Estonia Kristiina Vassilkova Baltic Institutional Sales
pavel.lupandin@swedbank.ee +372 6 131 535 risto.hunt@swedbank.ee +372 6 136 796 kristiina.vassilkova@swedbank.ee +372 6 131 663
Donatas Užkurėlis Lithuania Marko Daljajev Estonia Andres Suimets Head of Sales (Estonia)
donatas.uzkurelis@swedbank.lt +370 5 268 4395 marko.daljajev@swedbank.ee +372 6 131 246 andres.suimets@swedbank.ee +372 6 131 657
Svetlana Skutelska Head of Sales (Latvia)
Telecom Services Financials Svetlana.skutelska@swedbank.lv +371 6744 4154
Marko Daljajev Estonia Risto Hunt Estonia Simona Sileviciute Head of Sales (Lithuania)
marko.daljajev@swedbank.ee +372 6 131 246 risto.hunt@swedbank.ee +372 6 136 796 simona.sileviciute@swedbank.lt +370 5268 4513
Marko Daljajev Estonia
marko.daljajev@swedbank.ee +372 6 131 246 Equity Trading
Simmo Sommer Head of Baltic Trading
Consumers Healthcare simmo.sommer@swedbank.ee +372 6131 605
Pavel Lupandin Estonia Marko Daljajev Latvia
pavel.lupandin@swedbank.ee +372 6 131 535 marko.daljajev@swedbank.ee +372 6 131 246 Equity Capital Markets
Donatas Užkurėlis Lithuania Lauri Lind Head of Baltic Equity Capital Markets
donatas.uzkurelis@swedbank.lt +370 5 268 4395 lauri.lind@swedbank.ee +372 6 131 355
Mihkel Torim Baltic Equity Capital Markets
mihkel.torim@swedbank.ee +372 6 131 564

Swedbank Group Homepage: www.swedbank.com. For Research products on Bloomberg please type: HBME <GO>.

Background Information:
Recommendation structure
Swedbank Markets’ recommendation structure consists of six recommendations: Buy, Accumulate, Hold, Reduce, Sell and Avoid. The
recommendations are based on an absolute return for the security 12 months forward. The absolute return includes share price appreciation
and dividend yield combined.
The recommendations for the securities mentioned in this report are based on risk and return considerations. The higher the risk category of
the investment, the higher the required return. For equity investments, returns are defined as capital appreciation and dividends received over
the investment horizon of 12 months forward. The expected capital appreciation is the ratio of a stock’s target price over the current price. A
company risk rating depends on its stock price volatility, liquidity and business outlook. The target price depends on a company’s
fundamentals as well as the market valuation of peer stocks, and can be changed at any time if the relevant changes occur within a
company/market perception of the peer group. “Buy”, “accumulate”, “hold”, “reduce”, “sell” and “avoid” recommendations may be used in this
report. The table below presents the relationship between recommendations and target prices compared to risk level of the stock. These are
indicative ranges and actual recommendations may deviate from the indications if other relevant issues are considered. For more detailed
information about the recommendation system please visit http://www.swedbank.ee/disclaimers/recommendation2007.pdf

Recommendation structure

Buy > +20% to target price

Accumulate +10% < target price < +20%
Hold 0% < target price < +10%
Reduce -10% < target price < 0%
Sell < -10% to target price
Avoid used when security does not match the standards presented in SWB’s investment guidelines

The recommendation by Swedbank Markets Equity Research department is based on a variety of standard valuation models. However, the
base for the calculation of the target price is our DCF model (DCF = discounted cash flow) with the exception of financial and investment
companies. The DCF model discounts future cash flow at present value.
In preparation of this report different valuation methods have been used, including, but not limited to, discounted free cash-flow and
comparative analysis. The selection of methods depends on the industry, the company, the nature of the stock and other circumstances.
The target price (previous fair value) takes into account the DCF value, the relative valuation of the share versus others peers (national or
international) and news that can have a positive or negative effect on the share price. Relative and absolute multiples that we consider are:
EV/EBITDA, EV/EBIT, PE, PEG and Net Asset models for companies with liquid markets for their assets and other industry specific ratios
when available. Break-up valuation models are also sometimes considered.

Recommendations by the 16 nov 2009

No of shares Part of total
Buy 10 ██████████ 45%
Accumulate 2 ██ 9%
Hold 2 ██ 9%
Reduce 2 ██ 9%
Under Review 6 ██████ 27%

Equity Research – Swedbank Markets Page 3 of 4

 Equity Weekly – November 16, 2009

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