Equity Weekly

Equity Research - Monday, January 4, 2010

Index value Weekly Change,% Weekly Turnover

Baltic Indices
355 Estonia 404.6 0.88% €1,7m

As holiday moods were on the market, no big surprises or activity was seen on
335 Tallinn Stock Exchange. The weekly turnover reached €1.7m and the index
increased by 0.9% W-o-W to 404.6 points.
315
Latvia 278.9 1.09% €0,1m

295
Holiday moods were seen on Latvian market as well. The weekly turnover
reached €0.1m only. The index increased by 1% W-o-W to 278.9 points.
275
1-Oct 15-Oct 29-Oct 12-Nov 26-Nov 10-Dec 24-Dec
Lithuania 261.8 2.76% €4,0m
Baltic Benchmark OMX Tallinn*
OMX Riga* OMX Vilnius*
* Relativ e to Baltic Benchmark Source: Reuters, Swedbank
The weekly turnover in Lithuanian market reached €4m. The index increased
almost 2.8% W-o-W to 261.8 points. Most of the stocks ended the week in green.
Last Weekly Weekly P/E P/BV
Estonia (in €) Close Change Volume Trail. 4Q 09F Last Q 09F
Arco Vara 0.17  21.4% 1044099 -0.2 8.1 0.5 0.3
Baltika 0.73  19.7% 202312 -1.7 -2.0 1.1 1.1
Eesti Telekom 5.94 0.0% 6521 10.1 16.7 4.0 4.9

Estonia
Ekspress Grupp 1.03  8.4% 19930 -4.5 -4.3 0.6 0.6
Harju Elekter 2.07  1.0% 11720 32.7 26.4 1.2 1.4
Järvevana 0.35 0.0% 3540
Merko Ehitus 5.02  2.2% 11796 19.4 -71.9 0.7 0.7
Nordecon International 1.58  1.9% 7791 84.9 -29.8 1.0 1.1 On December 21, 2009, the Listing and Surveillance Committee of
Norma 3.90 0.0% 400 37.9 -38.4 0.9 0.9
NASDAQ OMX Tallinn decided to satisfy the application of AS Eesti
Olympic Entertainment Group 0.77  8.5% 607563 -2.3 -4.6 1.4 1.4
Silvano Fashion Group 0.78  -4.9% 12189 -26.6 -20.6 1.0 0.8
Telekom from November 30, 2009, and to delist its shares from the Main
Tallink 0.37  -2.6% 895717 -30.5 7.3 0.4 0.4 List of NASDAQ OMX Tallinn starting from the next day after the Estonian
Tallinna Kaubamaja 3.61  0.6% 71512 -25.2 -15.3 1.3 1.4 CSD has transferred minority shares to the majority shareholder -
10.00  -1.2%
Tallinna Vesi
Viisnurk 0.72  -1.4%
15990
4299
10.2
214.8
9.7
4.5
2.5
0.7
2.3
0.6
TeliaSonera AB.
P/E P/BV
Latvia (in LVL)
Last
Close
Weekly Weekly
Change Volume Trail. 4Q 09F Last Q 09F
On 21.12.2009 The Arbitration Court of the Estonian Chamber of Commerce
Grindeks 3.80  0.3% 1535 3.4 5.5 0.5 0.7 and Industry has made court judgment wherewith Arco Investeeringute AS
Latvian Gas 4.10  -1.4% 2453 8.1 0.6 claim towards Ühendatud Kapital AS was fully satisfied and order
Latvian Shipping Company
Latvijas Balzams
0.40
1.90
 5.3%
 1.1%
16789
886
1.5
6.4
1.1 0.2
0.4
0.1
Ühendatud Kapital AS to pay to Arco Investeeringute AS main arrears on a
Liepajas Metalurgs 1.12  1.8% 640 1.0 0.2
amount of USD 10m (approx. €6.9m), interest calculated from main arrears
Olainfarm 0.94 0.0% 9276 95.5 8.7 0.9 0.8 in amount of USD 0.9m (approx. €0.6m) and interest on account of late
SAF Tehnika 0.48  -4.0% 4810 -1.6 0.7 0.2 0.1 payment in amount of USD 0.8m (approx. €0.5m), sum total USD 11.7m
Valmiera Fibre Glass 0.43  -4.4% 300 0.8 0.4
Ventspils Nafta 0.94  1.1% 13298 2.7 0.3
(approx. €8.2m). Additional on that Ühendatud Kapital AS has to
Last Weekly Weekly P/E P/BV compensate court expenses to Arco Inevsteeringute AS in an approximate
Lithuania (in LT L) Close Change Volume Trail. 4Q 09F Last Q 09F amount of €70.3 thousand.
Apranga 2.75  16.5% 225639 21.2 -4.1 1.1 1.1
Arbitration court judgment is final and entered into force from the moment of
City Service 6.46  -3.6% 67069 11.2 7.7 2.0 1.6
Grigiskes 0.93  5.7% 53060 -12.2 0.9
adopting.
Invalda 1.84  1.1% 56195 -0.7 0.5
Klaipedos Nafta 0.94  -3.1% 3107656 11.9 0.7
On December 29, Arco Vara AS (hereinafter the Group) 100% subsidiary
Lietuvos Dujos 2.10  4.5% 22393 24.7 15.7 0.5 0.5 Arco Ehitus OÜ sold its shares of Arco Construction SIA (55 % subsidiary of
Lietuvos Energija 2.36  2.6% 18240 -45.1 0.6 Arco Ehitus OÜ) with the share capital of 4,000 Latvian Lats (approx.
Lietuvos Juru Laivininkyste 0.43  2.4% 11945 -2.1 0.4
€5,646).
Lifosa 27.78  6.4% 2561 3.7 0.7
Panevezio Statybos Trestas 3.79  17.3% 241733 2.1 0.5
On 23 December 2009, the Ministry of the Environment and the consortium
Pieno Zvaigzdes 2.94  3.2% 1679 18.9 5.3 1.1 1.0
Rokishkio Suris 3.00  6.8% 4260 -13.3 0.7
of AS Merko Ehitus and AS Ehitusfirma Rand & Tuulberg (who had
RST 1.83  1.1% 40167 -10.3 0.4 submitted the best tender in the public procurement competition) concluded
Sanitas 9.53  0.8% 7157 -11.7 1.2 a contract of services, for the close-down of the industrial waste and semi-
 8.7%
Siauliu Bankas
Snaige
1.12
0.57  1.8%
475933
336262
4.6
-0.5
0.7
0.3
coke landfill at Kohtla-Järve. According to the contract the consortium will
Snoras 1.00  16.3% 771619 1.4 0.4 move a total of approx. 6 million cubic meters of soil, reclaim nearly 80
TEO LT 1.83  -1.6% 2595993 8.6 8.5 1.4 1.4 hectares of waste dump area, and landscape a total of 100 hectares of land.
Ukio Bankas 1.06  9.3% 1954899 1.2 0.4
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 – 4 January 2010

Price of the contract is €17.2m (excl. VAT) and completion time for the works is set on
spring 2013.
AS Ekspress Grupp announced its consolidated sales revenue in November which was
approx. €5.8m, increasing by 2% compared to October. The EBITDA of the Group in
November was €0.51m. The normalized EBITDA in October was €0.54m.

Latvia
No Corporate News.

Lithuania
No Corporate News.

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

Equity Research – Swedbank Markets Page 2 of 5

 Equity Weekly – 4 January 2010

Investor Calendar:
Date Description
Estonia
No Corporate News

Latvia
No Corporate News

Lithuania
4.01.2010 RST1L - Extraordinary General Meeting
4.01.2010 VST1L - Extraordinary General Meeting

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 – 4 January 2010

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 Mihkel Torim Baltic Equity Capital Markets
donatas.uzkurelis@swedbank.lt +370 5 268 4395 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 04 jaan 2010

No of shares Part of total
Buy 11 ██████████ 50%
Accumulate 2 █ 9%
Hold 1 5%
Reduce 1 5%
Sell 1 5%
Under Review 6 █████ 27%

Equity Research – Swedbank Markets Page 4 of 5

 Equity Weekly – 4 January 2010

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