GREECE | EQUITY RESEARCH

January 21, 2015

STRATEGY

Political eclipse ASE General Index Price

Gone unloved again With polls a few days before the Greek general elections
showing Syriza holds a steady lead over New Democracy, we have revisited our thesis on 1,450
the Greek market. Following a period of derating as the political backdrop has eclipsed
economic fundamentals, most Greek stocks are only slightly higher than the 2yr lows 1,350
reached in early January. Overall, the benchmark index stands >40% below its March 1,250
2014 peak with several stocks trading at the low end of their historical valuation range.
1,150
Base case: common sense will prevail In this report, we examine various scenarios
regarding the election results, but we consider most likely the formation of a coalition 1,050
government with Syriza as the main body. Although it is hard to foresee how the post-
election situation will play out exactly, in our view, the potential participation of 950
mainstream centre-left parties such as To Potami in a coalition govt is likely to prevent
serious confrontation with Greeces creditors. In this case, a Syriza-led govt will be 850
formed on the mandate to renegotiate aspects of the Greek program (e.g. unwinding of
750
certain austerity measures) but will not provoke a rift with the EU. Jan-14 Apr-14 Jul-14 Oct-14 Jan-15
Post-election issues; a bumpy ride The new govt will face pressure to: 1) Deal with
imminent debt redemptions (EUR4.6bn in Q1); 2) Tackle the funding gap (EUR20bn over
2015-16 as per our Economists); 3) Negotiate a potential extension of the current EFSF
Index Data
program (runs until end Feb 2015) and the financing structure post the program
expiration; 4) Wrap up negotiations with the troika regarding the pending program Reuters RIC .ATG
Bloomberg Code ASE Index
review; 5) Bring budget execution back on track, especially after the derailment in
December (monthly revenue shortfall EUR2.4bn); 5) Negotiate debt reduction measures.
Closing Price (16/01) 790.59
With regard to the latter, our Economists suggest that some form of new OSI will be
necessary down the road so as to: i) deliver further debt relief (in NPV terms); and ii) 52 Week High 1,359.42
smooth out a demanding government borrowing profile post 2022/23. 52 Week Low 756.8
2015: 2012 reloaded? Greek assets will face a bumpy ride into Q1-Q2 until the new
governments policies become evident and Greece/EU wrap up the pending Performance (1m) -8.3%
negotiations. Although based on pure valuation grounds one could turn more Performance (YTD) -4.3%
constructive on the equity market assuming that tail risks partly reflected on the c15%
WACC implied at current levels will not materialise, the hurdles the new govt will need
to overcome feel like a dj vu of H1 2012. We retain our view that Grexit is more a
linguistic term rather than actual risk, but we anticipate sentiment to remain volatile
until the new govt reaches an agreement with the EU/IMF. The risk of the political
uncertainty delaying the economic recovery is an additional layer of uncertainty not
currently reflected in market estimates.
Eurobank Equities Research
Nick Koskoletos, CFA , Head of Research
Top picks portfolio update: Jumbo (new entry), Mytilineos and Hellenic Exchanges
+ 30 210 3720257 nkoskoletos@eurobankequities.gr
We have updated the price targets of stocks under our coverage edging up our risk-free
rate assumption to 8% (from 7% previously) to reflect the elevated political risk. We Stamatios Draziotis, CFA
+ 30 210 3720259 sdraziotis@eurobankequities.gr
have updated our top picks portfolio retaining our preference for stocks offering a
combination of strong fundamentals, earnings growth, cash generation and opportunity Panagiotis Kladis, CFA
for shareholder returns, as we believe these names are most likely to outperform in a + 30 210 3720267 pkladis@eurobankequities.gr
volatile environment. To this respect, we retain Mytilineos (exposure in a well- Katerina Zaharopoulou
positioned aluminum smelter) and Hellenic Exchanges (cash rich market proxy at large + 30 210 3720252 kzaharopoulou@eurobankequities.gr
discount to peers) in our top picks portfolio while we have also added Jumbo (low-ticket Christina Kouklaki
product retailer with highly visible earnings and cash flows), replacing OPAP (keeping our + 30 210 3720254 ckouklaki@eurobankequities.gr
Buy on the latter, though). Depending on political and/or ECB policy developments (e.g.
QE), we will stay alert to adjust our investment proposal by making tactical changes to Sales
our preferred portfolio in what might develop to be a memorable year. +30 2103720119
Eurobank Equities Top Picks Portfolio Trading
Mcap TP P/E (x) EV/EBITDA (x) +30 2103720168 / 110
Company Upside Rating
(EUR mn) (EUR) 2015 2016 2015 2016
Jumbo 1,208 13.30 50% Buy 10.6x 9.4x 6.4x 5.4x See Appendix for Analyst Certification and important
disclosures
Mytilineos 531 8.70 92% Buy 5.4x 4.7x 2.9x 2.5x
Helex 302 7.50 62% Buy 14.0x 12.7x 5.0x 3.7x
Source: Eurobank Equities Research. Prices as of 16th January, 2015
 STRATEGY
January 21, 2015

Eurobank Equities Investment Firm S.A. 10 Filellinon Street

Member of Athens Exchange, 105 57 Athens, Greece
Cyprus Stock Exchange and Eurobank Group.
Telephone: +30 210-3720 000
Regulated by the Hellenic Capital Markets Commission Facsimile: +30 210-3720 001
Authorisation No: 6/149/12.1.1999 Website: www.eurobankequities.gr
VAT No: 094543092, Reg. No. 003214701000 E-mail: research@eurobankequities.gr

IMPORTANT DISCLOSURES
This report has been issued by Eurobank Equities Investment Firm S.A., a member of the Athens Exchange, a member of the Cyprus Stock Exchange and a member of
Eurobank Ergasias S.A. Eurobank Equities Investment Firm S.A., is regulated by the Hellenic Capital Markets Commission (HCMC) with authorization number
6/149/12.1.1999. This report may not be reproduced in any manner or provided to any other persons. Each person that receives a copy by acceptance thereof
represents and agrees that it will not distribute or provide it to any other person. This report is not an offer to buy or sell or a solicitation of an offer to buy or sell
securities mentioned herein. The investments discussed in this report may be unsuitable for investors, depending on their specific investment objectives and financial
position. The investments discussed in this report are subject to risks and in respect of some investments there is risk for multiplied losses to be caused in respect to
the capital invested.
The information contained herein has been obtained from sources believed to be reliable but it has not been verified by Eurobank Equities Investment Firm S.A. The
opinions expressed herein may not necessarily coincide with those of any member of the Eurobank Group. No representation or warranty (express or implied) is made
as to the accuracy, completeness, correctness, timeliness of fairness of the information or opinions herein, all of which are subject to change without notice. No
responsibility of liability whatsoever or howsoever arising is accepted in relation to the contents hereof by Eurobank Equities Investment Firm S.A. or any of its
directors, officers or employees.
Eurobank Equities Investment Firm S.A. follows procedures under Eurobank Group policies that set up Chinese Walls, restricting communication between Research and
other departments inside the Company or the Group so that Eurobank Equities Investment Firm S.A. complies with regulations on confidential information and market
abuse.
Eurobank Equities Investment Firm S.A. or any of its related legal persons, does not hold shareholdings exceeding 5% of the total issued share capital in any of the
subject companies mentioned in this report, with the exception of Hellenic Post Bank, Grivalia Properties, Lamda Development, Altec, Nikas, Quality & Reliability, Alpha
Trust Andromeda, Kardasilaris and to the Cyprus Stock Exchange listed Cyprus Airways Public Ltd.
None of the subject companies mentioned in this report holds shareholdings exceeding 5% of the total issued share capital of Eurobank Equities Investment Firm S.A.,
or any of its related legal persons, with the exception of Eurobank Ergasias S.A.
Eurobank Equities Investment Firm S.A., or any of its related legal persons, is not a market maker (of stocks or of derivative contracts on stocks) to any of the subject
companies mentioned in this report with the exception of Alpha Bank, Bank of Cyprus, Coca Cola Hellenic, Corinth Pipeworks, Ellaktor, Eurobank, Grivalia Properties,
EYDAP, Gek Terna, Frigoglass, Hellenic Exchanges, Hellenic Petroleum, Intralot, Jumbo, MIG, Motor Oil, Mytilineos, National Bank, OPAP, OTE, Piraeus Bank, PPC,
Sidenor, Terna Energy, Titan, Viohalco, FF Group, Metka, Piraeus Port Authority, Euroconsultants, Anemos, Profile, Reds.
Eurobank Equities Investment Firm S.A., or any of its related investment banking services legal persons, is not a party to any other agreement relating to the provision
of investment banking services, which a) has been in effect over the previous twelve months or b) has given rise during the same period to the payment of a
compensation or to the promise to get a compensation paid, with any of the subject companies mentioned in this report with the exception of the following: Anemos,
Athens Medical Center, Attica Bank, Digimed Communications, DOL, Electroniki Athens, Ellaktor, Eurobank, Grivalia Properties, EYATH, EYDAP, Hygeia, Inform Lykos,
Lamda Development, Maillis, Piraeus Bank, Selonda Aquaculture, Teletypos.
Eurobank Equities Investment Firm S.A., or any of its related legal persons, is not a party to an agreement relating to the production of this report with the subject
companies mentioned in this report.
Eurobank Equities Investment Firm S.A. occasionally trades for own account on investment instruments related to companies mentioned in this report.
Analyst Certification:
This report has been written by Nick Koskoletos (CFA), Stamatios Draziotis (CFA), Helen Herra, Katerina Zaharopoulou, Panagiotis Kladis (CFA), Christina Kouklaki.
Analyst Compensation:
The remuneration of Nick Koskoletos (CFA), Stamatios Draziotis (CFA), Helen Herra, Katerina Zaharopoulou, Panagiotis Kladis (CFA), Christina Kouklaki is not tied to the
investment banking services performed by Eurobank Equities Investment Firm S.A. or any of its related legal persons. Nick Koskoletos (CFA), Stamatios Draziotis (CFA),
Helen Herra, Katerina Zaharopoulou, Panagiotis Kladis (CFA), Christina Kouklaki did not receive or purchase the shares of the subject companies mentioned in this
report prior to a public offering of such shares.
Planned Frequency of Updates:
Eurobank Equities Investment Firm S.A. provides daily and monthly updates as well as updates on companies based on company-specific developments or quarterly
financial results announcements or any other publicly available information.

Eurobank Equities Investment Firm S.A. Rating System:

Stock Ratings Coverage Universe Investment Banking Clients
Count Total Count Total
Buy 14 48% 2 14%
Hold 10 34% 2 20%
Sell 1 3% 0 0%
Restricted 2 7% 2 100%
Under Review 2 7% 0 0%
Total 29 100%
Analyst Stock Ratings:
Based on a current 12-month view of total shareholder return (percentage change in share price to projected target price plus projected
Buy:
dividend yield), we recommend that investors buy the stock.
Hold: We adopt a neutral view on the stock 12-months out and, on this time horizon, do not recommend either Buy or Sell.
Sell: Based on a current 12-month view of total shareholder return, we recommend that investors sell the stock.
Restricted: Under Eurobank Group policy and / or regulations which do not allow ratings
Under Review: Our estimates, target price and recommendation are currently under review.