Independent Research Analysis

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Change in Target Price

09/05/2017 — € 3.32 vs 2.38 +39.9%

2016 results within expectations. Strong recovery for 2017: recent developments provide visibility.

Following the decision taken at the shareholders meeting and applied in April 2017, the group has changed its share capital nominal value from Bulgarian lev to euro. This measure has generated a euro to Bulgarian lev ratio of 1:1.955. The measure has reduced the number of outstanding shares from 40.91m to 20.9m which has supported our per share valuation metrics.

The recent news coming from the signing of the UK project is a positive for investors as it confirms the positive trend in the business plan. It also provides greater visibility in the strong expectations for the coming years in terms of revenue and earnings growth.

Change in EPS

2017 : € 0.00 vs 0.00 ns

2018 : € 0.07 vs 0.04 +95.6%

The 2016 results were broadly in line with our expectations, hence, no major changes were needed to our estimates. We maintain top- and bottom-line earnings forecasts for the coming years (2017 and 2018) in addition to the inclusion of 2019 into our model. However, the reverse split decision taken in 2017 with a lower number of shares outstanding has a positive effect on our EPS from 2017 onwards.

Change in NAV

€ 4.23 vs 1.97 +115%

After the 2016 results and the inclusion of EQTEC PLC into the Ebioss holding structure, we have updated our SOTP valuation. The higher earnings expected in the coming years support a higher valuation.

Following this, and given that the company’s current model is based on a less capital-intensive structure and the recent confirmation of completing of the business plan with the signing of the UK project, we have updated our valuation model with a less cautious approach, as we have applied multiples closer to comparable peers. The positive effect generated by this is supported by a lower number of shares outstanding, creating as a result an upward revision in our NAV expectations.

Change in DCF

€ 4.67 vs 3.92 +19.1%

Following the publication of the 2016 results, we have added the 2019 forecasts into our model. The good earnings trend should have a positive effect on the group’s operating cash flows and, consequently, on our DCF valuation. Moreover, the lower number of shares outstanding has generated a positive effect on per share values, increasing also our DCF valuation.

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