Equity Weekly

Equity Research - Monday, October 5, 2009

Index value Weekly Change,% Weekly Turnover

Baltic Indices
415 Estonia 430.2 -3.88% €14,5m

375 After the fast rally on the market, a profit taking took place. Stocks were mostly
sold by the retail. Most active stocks were, as usually, Tallink and Olympic
Entertainment Group. Strong activity was seen in Estonian Telekom as well.
335

295 Latvia 319.4 -11.26% €0,4m

255 Most of the stocks pulled back sharply last week, suffering double digit losses
due to profit taking after the rally on the market. The OMXR dropped by 11.26%
215 W-o-W to 319.4 points.
2-Jul 16-Jul 30-Jul 13-Aug 27-Aug 10-Sep 24-Sep
Baltic Benchmark OMX Tallinn*
OMX Riga* OMX Vilnius* Lithuania 297.6 -5.32% €11m
* Relativ e to Baltic Benchmark Source: Reuters, Swedbank

Just like on Estonian and Latvian markets, we saw some profit taking on OMXV
Last Weekly Weekly P/E P/BV
as well. The index declined by 5.3% W-o-w to 297.6 points. Most active stocks on
Estonia (in €) Close Change Volume Trail. 4Q 09F Last Q 09F
OMXV were TEO LT and Ukio Bankas.
Arco Vara 0.27  -20.6% 1912423 -0.4 -3.4 0.6 0.7
Baltika 0.79  -18.6% 263871 -1.9 -3.9 1.2 1.0
Eesti Telekom 6.33  0.3% 1646371 10.8 17.8 4.2 5.2

Estonia
Ekspress Grupp 1.34  -1.5% 71798 112.3 -25.3 0.7 0.7
Harju Elekter 2.40  -5.9% 11963 29.8 30.6 1.6 1.6
Järvevana 0.40  2.6% 60225
Merko Ehitus 5.02  -8.7% 41013 17.5 -71.9 0.7 0.7
Nordecon International 1.46  -5.8% 105119 17.5 -27.6 0.9 1.0 Merko Ehitus made an announcement of a short-term business plan which
Norma 3.75  -3.8% 96157 12.6 -36.9 0.9 0.9
is about of affording up to €19.2m of the company's funds to clients in co-
Olympic Entertainment Group 0.72  -10.0% 681374 -2.5 -6.0 1.2 1.2
Silvano Fashion Group 0.72  5.9% 85251 -2.6 -19.0 0.9 0.7
financing of new construction contracts as well as financing the purchase of
Tallink 0.38  -9.5% 3262429 -24.6 -11.4 0.4 0.4 new real property, within the next 12 months.
Tallinna Kaubamaja 4.74  -8.1% 62102 -56.6 54.3 1.7 1.6
Tallinna Vesi 10.46  -1.6% 11317 11.1 11.2 2.8 2.4 Ekspress Grupp announced that the contract of selling 100% ownership in
Viisnurk 0.87  -9.4% 55508 259.5 5.5 0.9 0.8 AS Ekspress Hotline and its subsidiaries was approved by the Competition
P/E P/BV
Latvia (in LVL)
Last
Close
Weekly Weekly
Change Volume Trail. 4Q 09F Last Q 09F
Board of Estonia. According to the previous announcement the transaction
Grindeks 4.65  -4.1% 6237 6.0 6.7 0.9 0.8 consists of following parts: €2m is payable at the transaction date,
Latvian Gas 4.80  -15.8% 1146 9.4 0.6 approximately €2m is subject to off-set with the payable by AS Ekspress
Latvian Shipping Company
Latvijas Balzams
0.54
2.20
 -14.3%
 -26.4%
42749
3668
2.0
7.4
1.5 0.2
0.5
0.2
Group to Ekspress Hotline Group, and €2m will be paid in 5 year with the
Liepajas Metalurgs 1.40  -13.6% 1745 1.3 0.3
interest of 8% per annum. The contract should be completed approx. in one
Olainfarm 0.90  -27.4% 80663 91.5 8.4 0.8 0.8 month.
SAF Tehnika 0.61  -21.8% 96457 -2.1 0.9 0.2 0.2
Valmiera Fibre Glass
Ventspils Nafta
0.47
1.27
 -20.3%
 5.8%
32715
37953
0.9
3.7
0.4
0.4
Latvia
Last Weekly Weekly P/E P/BV
Lithuania (in LT L) Close Change Volume Trail. 4Q 09F Last Q 09F
Apranga 2.73  -13.9% 265144 21.1 -4.1 1.1 1.0
Ventspils nafta was in the market participants spotlight gaining 5.8% to
City Service 9.03  -7.4% 66850 15.7 10.7 2.7 2.2 LVL 1.27 after the company released the news about the new agenda of
Grigiskes 0.91  -9.9% 211912 -12.0 0.8 extraordinary shareholders meeting. Question about dividends payout will
Invalda 2.76  -18.3% 219757 -1.0 0.8
be discussed but company hasn’t disclosed the amount of planned
Klaipedos Nafta 0.97  -5.8% 174229 12.3 0.8
Lietuvos Dujos 2.54  -1.9% 190567 29.9 19.0 0.6 0.6
dividends yet.
Lietuvos Energija 3.20  10.3% 91217 -61.1 0.8
Lietuvos Juru Laivininkyste
Lifosa
0.48  -11.1%
29.40  -7.4%
312183
15879
-2.4
3.9
0.4
0.7
Lithuania
Panevezio Statybos Trestas 4.31  -8.1% 197991 2.4 0.6
Pieno Zvaigzdes 3.25  4.8% 19170 20.9 5.9 1.2 1.1 Pieno zvaigzdes will summon an extraordinary shareholders meeting on 29
Rokishkio Suris 3.66  14.4% 27194 -16.2 0.9
RST 2.37  -8.1% 115921 -13.4 0.5
October 2009. In the agenda planned questions are amendments to the
Sanitas 10.50  -5.0% 29518 -12.8 1.3 Articles of Association and approval of the amendments and main
Siauliu Bankas 1.17  -10.0% 636630 4.8 0.7 conditions of the agreements regarding activities at the Board.
Snaige 0.65  -24.4% 2818986 -0.6 0.3
Snoras 1.17  -10.0% 1733333 1.7 0.5 During the extraordinary AGM Alita adopted the decision to spin-off Alita AB
TEO LT 1.85  -1.6% 10569691 9.1 9.7 1.3 1.4
Group from Alita AB. Both companies will be listed on the VSE. Due to lower
Ukio Bankas 1.22  -7.6% 5084559 1.4 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 – 5 October, 2009

sales Alita and Anyksciu vynas will operate four days per week in the fourth quarter this
year.
Russia temporary banned Rokiskio suris dairy imports. Rokiskio suris management
acknowledges that such a suspension will not have a significant influence on the
company's financial results.
This year, the company's consolidated sales to the Russian Federation made less than 10
percent of the total consolidated sales.
Russia temporary limited Pieno zvaigzdes dairy imports into the country. Pieno zvaigzdes
commented that this will not have any substantial effect neither on sales nor profitability as
the company shits its exports to the EU market. On Friday as planned the company
redeemed LTL 20m (EUR 5.8m) 3 years bond emission.
Apranga’s reached the retail turnover (including VAT) of LTL 32.1m (EUR 9.3m) in
September 2009, down 36.5% yoy. During the first nine months the company’s turnover
comprised LTL 290.7m (EUR 84.2m) or 22.6% less than for the same period last year.
Klaipedos nafta transshipped 5’544.0 thousand tons of oil products during the first nine
months, down by 11.1% yoy, including 625.7 thousand tons of oil products during
September. For the same period revenues amounted to LTL 83.7m (EUR 24.2m), down by
6.8% yoy.

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

Equity Research – Swedbank Markets Page 2 of 5

 Equity Weekly – 5 October, 2009

Investor Calendar:
Date Description
Estonia
No Corporate News

Latvia
No Corporate News.

Lithuania
5.10.2009 CTS1L - Extraordinary General Meeting
5.10.2009 RSU1L - Preliminary turnover of the Group for September and 9M 2009
9.10.2009 SAN1L - Extraordinary General Meeting
9.10.2009 TEO1L - Closing date for execution of voluntary tender offer

Source: NASDAQ OMX

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

Equity Research – Swedbank Markets Page 3 of 5

 Equity Weekly – 5 October, 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

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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.

Buy
Recommendations by the 05 October 2009 Under
41%
Review
No of shares Part of Total 18%

Buy 9 41%
Accumulate 2 9%
Hold 1 5% Sell
Reduce 2 9% 18% Accumula
te
Sell 4 18% Reduce Hold 9%
Under Review 4 18% 9% 5%

Equity Research – Swedbank Markets Page 4 of 5

 Equity Weekly – 5 October, 2009

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