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Equity Weekly

Equity Research - Monday, January 18, 2009

Index value Weekly Change,% Weekly Turnover

Baltic Indices
365 Estonia 487.9 15.61% €8,5m

Last week trading was relatively active and positive moods supported the stocks
345 nicely. There was interest from both retail and institutional clients. Most traded
shares were Olympic, Tallink, and Arco Vara. Majority of shares showed double
digit gains, with increased interest from retail clients. There was institutional
demand for Merko, Kaubamaja and Tallink, but institutions were buying
cautiously. Overall it was very positive week for all Estonian stocks.
Latvia 317.2 0.47% €0,8m
15-Oct 29-Oct 12-Nov 26-Nov 10-Dec 24-Dec 7-Jan Market activity and turnover was higher than usual however OMX Riga index
Baltic Benchmark OMX Tallinn* closed week without significant changes. Despite strong institutional demand in
OMX Riga* OMX Vilnius* some of names, sellers were also rather active which didn’t let to go share prices
* Relativ e to Baltic Benchmark Source: Reuters, Swedbank higher.

Last Weekly Weekly P/E P/BV

Estonia (in €) Close Change Volume Trail. 4Q 09F Last Q 09F Lithuania 289.3 8.69% €5,8m
Arco Vara 0.21  10.5% 1336058 -0.2 9.9 0.7 0.4
Baltika 0.81  19.1% 301708 -1.9 -2.2 1.2 1.3
Ekspress Grupp 1.08  6.9% 225216 -4.7 -4.6 0.6 0.7 Like all Baltic markets, Lithuanian was trading at increased activity levels. Most
Harju Elekter 2.56  14.3% 46647 40.5 32.6 1.5 1.7 traded shares where TEO, Ukio Bankas and Invalda. Biggest gainers where
Järvevana 0.36  -2.7% 27861 Ukio Bankas +12.62% and Apranga +11.22%. Institutional clients where mostly
Merko Ehitus 6.56  20.6% 47126 25.4 109.8 0.9 0.9 interested in TEO and there was some selling interest for City Service.
Nordecon International 1.98  16.5% 193583 106.4 -37.4 1.2 1.3
Norma 4.20  2.4% 53056 40.8 -41.3 1.0 1.0
Olympic Entertainment Group 1.04  36.8% 1677665 -3.1 -5.2 1.9 2.0
Silvano Fashion Group 1.01  17.4% 50967 -34.5 -26.6 1.3 1.0
Tallink 0.46  21.1% 7442682 -37.9 9.1 0.5 0.5
Tallinna Kaubamaja
Tallinna Vesi
4.49  16.3%
10.33  -0.7%
2.4 Estonia
Viisnurk 0.94  16.0% 39712 280.4 5.9 0.9 0.8

Last Weekly Weekly P/E P/BV

Latvia (in LVL) Close Change Volume Trail. 4Q 09F Last Q 09F Since January 13th, 2010, shares of Eesti Telekom are no longer traded on
Grindeks 3.90 0.0% 1056 3.5 5.6 0.5 0.7 the Tallinn Stock Exchange. Eesti Telekom wishes to thank all investors
 2.4%
Latvian Gas
Latvian Shipping Company
0.45  -4.3%
1.7 1.3
0.2 0.2
who have entrusted Eesti Telekom with the growth of their capital.
Latvijas Balzams 2.00  9.3% 1192 6.7 0.5
Liepajas Metalurgs 1.45  3.6% 360 1.3 0.3
Olainfarm 1.04 0.0% 30590 105.7 9.7 0.9 0.9
SAF Tehnika
Valmiera Fibre Glass
 1.9%
 -4.2%
0.8 0.2
Ventspils Nafta 0.97  -1.0% 213162 2.8 0.3

Last Weekly Weekly P/E P/BV No Corporate News

Lithuania (in LT L) Close Change Volume Trail. 4Q 09F Last Q 09F
Apranga 3.27  11.2% 266494 25.2 -4.9 1.4 1.3
City Service 6.65  6.2% 242857 11.6 7.9 2.0 1.6
 5.3%
 17.0%
0.7 Lithuania
Klaipedos Nafta 1.00  4.2% 568755 12.7 0.8
Lietuvos Dujos 2.20  7.3% 119421 25.9 16.5 0.5 0.5
Lietuvos Energija 2.32  -1.3% 72782 -44.3 0.6 City Service has completed a new share issue of 12,500,000 ordinary
Lietuvos Juru Laivininkyste 0.49  8.9% 136785 -2.4 0.5 registered shares at the price of LTL 5.06 per share. The minority
Lifosa 33.30  5.0% 30110 4.4 0.8
shareholders have acquired 3,183,069 shares or 25.5 % of the new
Panevezio Statybos Trestas 4.15  5.9% 126360 2.3 0.6
Pieno Zvaigzdes 2.95  -0.7% 16554 19.0 5.3 1.1 1.0
emission for total LTL 16,106,329.14. The main shareholder of Rubicon
Rokishkio Suris 3.15  1.6% 5417 -13.9 0.8 Group acquired 9,316,931 shares or 74.5 % of the new emission. After the
RST 2.26  17.1% 391789 -12.8 0.5 new emission the authorized capital of the company shall be LTL
Sanitas 10.50  7.1% 9332 -12.8 1.3
Siauliu Bankas 1.12  2.8% 581817 4.6 0.7
Snaige 0.70  18.6% 933486 -0.6 0.4
Last year Apranga implemented a retail chain optimization. The company
Snoras 1.04  9.5% 1716015 1.5 0.4
TEO LT 2.06  7.9% 2237029 9.7 9.6 1.6 1.6
opened 21 new stores, 6 stores reorganized to a new concept and closed
Ukio Bankas 1.16  12.6% 4365904 1.3 0.5 13 stores. After the reorganization the stores area was reduced by 10% to
Source: Reuters, Swedbank 63,400 sq. m.

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

Equity Research – Swedbank Markets Page 1 of 5

Equity Weekly – 18 January 2009

At the end of September 2009 Apranga closed and the largest store “City” of 3059 sq. m.,
located in Vilnius, Gediminas Avenue. The new issue is that Apranga announced that it has
reached an agreement to terminate the lease contract with the owner of the premises
where City was located. The termination conditions remain undisclosed.

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

Equity Research – Swedbank Markets Page 2 of 5

Equity Weekly – 18 January 2009

Investor Calendar:
Date Description
No Corporate News

20.01.2010 VNF1R - Extraordinary General Meeting
25.01.2010 SMA1R - Extraordinary General Meeting

20.01.2010 DKR1L - Extraordinary General Meeting


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

Equity Research – Swedbank Markets Page 3 of 5

Equity Weekly – 18 January 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 +372 6 131 535 +372 6 136 796 +372 6 131 663
Donatas Užkurėlis Lithuania Marko Daljajev Estonia Andres Suimets Head of Sales (Estonia) +370 5 268 4395 +372 6 131 246 +372 6 131 657
Svetlana Skutelska Head of Sales (Latvia)
Telecom Services Financials +371 6744 4154
Marko Daljajev Estonia Risto Hunt Estonia Simona Sileviciute Head of Sales (Lithuania) +372 6 131 246 +372 6 136 796 +370 5268 4513
Marko Daljajev Estonia +372 6 131 246 Equity Trading
Simmo Sommer Head of Baltic Trading
Consumers Healthcare +372 6131 605
Pavel Lupandin Estonia Marko Daljajev Latvia +372 6 131 535 +372 6 131 246 Equity Capital Markets
Donatas Užkurėlis Lithuania Mihkel Torim Baltic Equity Capital Markets +370 5 268 4395 +372 6 131 564

Swedbank Group Homepage: 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

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 18 jaan 2010

No of shares Part of total
Buy 9 ██████████ 43%
Accumulate 1 █ 5%
Hold 2 ██ 10%
Reduce 2 ██ 10%
Sell 1 █ 5%
Under Review 6 ██████ 29%

Equity Research – Swedbank Markets Page 4 of 5

Equity Weekly – 18 January 2009

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