Croatia I Slovenia I Romania I Bulgaria I Serbia Upcoming ... Espresso... · Albalact Pevec 1 2 3 4...

Theme of the Day:Overview of Most Traded Shares in the Region

Bond, Money and Currency Markets:Romanian Q3 GDP boosted by all components expect net exports

Croatian Equity Market:Higher Overnights in Tourist Postseason

Regional Equity Market:Various Performances of Regional Indices

Global Equity Market:Dow at Record High

Technical Perspective - Region:HTRA ZA - Testing resistance @ 170

Technical Perspective - Global:DAX - Resistance @ 10800

IC Daily Highlights

•[CROATIA] In Jan-Nov 2016, Croatia recorded 90.7m of overnight stays (+14% YoY)•[ROMANIA] Net investments increased by 4.1% YoY in 9M 2016•[ROMANIA] Q3 2016 GDP growth 4.6% YoY •[BULGARIA] Q3 2016 GDP growth 3.4% YoY •[BULGARIA] Trace Group Hold's subsidiary [T67 BU] signed BGN 1.5m worth contract on construction work•[BULGARIA] Sopharma's 11M sales down by 5% YoY due to a strong decline in exports

IC Daily Newsflash

InterCapital Contacts

Important: Please read the references at the end of this report to possible conflicts of interest and disclaimers/disclosures

IC MARKET ESPRESSOInterCapital Research

7 December 2016

Quote of the Day:„You can never cross the ocean unless you have the

courage to lose sight of the shore.”

Christopher Columbus

Ivan DražetićMoney Market and Fixed Income, DealerPhone: + 385 (0)1 4825 888E-mail: [email protected]

Kristina PukšecHead of Fixed Income and Money MarketPhone: + 385 (0)1 4825 854E-mail: [email protected]

IC.traderInterCapital.hr1

Đivo PulitikaAnalystPhone: + 385 (0)1 4825 867E-mail: [email protected]

Croatia I Slovenia I Romania I Bulgaria I Serbia

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140

8-Dec-15 8-Mar-16 8-Jun-16 8-Sep-16

CRO Index SBITOP Index BELEX15 Index

BET Index SOFIX Index

Source: Bloomberg

Regional indices TTM

Date Announcement

14-Dec-16 CICG - Business plan for 2017

16-Dec-16 PETG - Plan and business policy for 2017

16-Dec-16 LKPG - Business plan for 2017

20-Feb-17 Petrol - FY 2016 results

23-Feb-17 TLSG - FY 2016 (prelim.)

9-Mar-17 ZVTG - Non-audit FY 2016 results

10-Mar-17 GRVG - Non-audit FY 2016 results

21-Mar-17 TLSG - Annual Report 2016

6-Apr-17 ZVTG - FY 2016 results

6-Apr-17 Petrol - General Meeting

Upcoming Announcements

Company Investment Thesis

VALAMARRIVIERA

One of the largest hospitality groupsFavourable accommodation positioning

Strong growth potential

PETROLGROUP

Stable cash flowHigh level of debt

Strong retail player

ADRISGROUP

Strategic shiftStrong cash position

Growth potential in insurance

FONDULPROPR.

Managed by Franklin TempletonSignificant discount to NAV

Possible privatizations of portfolio companies

Top Regional Investment Stories

Margareta MaresićJunior AnalystPhone: + 385 (0)1 4825 857E-mail: [email protected]

Renata ČempuhHead of Front OfficePhone: + 385 (0)1 4825 890E-mail: [email protected]

Danijel DelačHead of BrokeragePhone: + 385 (0)1 4825 894E-mail: [email protected]

Filip MajićBrokerPhone: + 385 (0)1 4825 896E-mail: [email protected]

Marin OnoratoMoney Market and Fixed Income, DealerPhone: + 385 (0)1 4343 180E-mail: [email protected]

Marcel DimačJunior AnalystPhone: + 385 (0)1 4825 858E-mail: [email protected]

http://ictrader.com.hr/

http://www.intercapital.hr/

Overview of Most Traded Shares in the Region

Theme of the Day

IC MARKET ESPRESSO

Important: Please read the references at the end of this report to possible conflicts of interest and disclaimers/disclosures 2 IC.traderInterCapital.hr

1,469

1,163

708

407

384

349

291

248

218

180

171

120

97

86

79

60

52

48

41

41

36

33

29

27

26

26

25

25

23

21

0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000

Banca Transilvania

Fondul Proprietatea

Romgaz

Electrica

BRD

Krka

OMV Petrom

Transgaz

Hrvatski Telekom

Transelectrica

Petrol

Valamar Riviera

Adris Grupa (pref.)

Triglav

Gorenje

Ledo

Luka Koper

Podravka

Telekom Slovenije

Conpet

Adris Grupa

Cinkarna Celje

Sava Re

NIS

Chimimport

Ericsson Nikola Tesla

Atlantic Grupa

Končar Ele.

Albalact

Pevec

12

34

56

78

91

01

11

21

31

41

51

61

71

81

92

02

12

22

32

42

52

62

72

82

93

0

Average daily turnover (EUR 000) Average adjusted daily turnover (EUR 000)

Since the end of the year is closing in we decided to do an overview of the most traded shares on all 5 markets in our coverage - namely Croatia,Slovenia, Romania, Bulgaria and Serbia. For our analysis we have calculated the average daily turnover of shares from the beginning of the year untiltoday. Bearing in mind that some of the companies had extraordinary high turnovers during some periods (eg. large block trades such as whenFondul disposed of its stake in OMV Petrom or when the Croatian state sold its stake in Koncar) which would probably significantly affect averageresults, we have excluded the 3 days with the highest individual turnovers (this is shown on the graph as adjusted average turnover).

As we can see, Romanian shares dominate in terms of average turnover. The most traded share is Banca Transilvania (EUR 1,469k per day),followed by Fondul Proprietatea (EUR 1,163k), Romgaz (EUR 708k), Electrica (EUR 407k) and BRD (EUR 384k). Romanian domination is somewhatoffset by the Slovenian Krka on the 6th place (EUR 349k) and the Croatian HT on the 9th place (EUR 218k).

The most traded regional share by far wasBanca Transilvania with an averageturnover of EUR 1,469k.

Romanian domination is somewhat offset by the Slovenian Krka on the 6th place (EUR 349k) and the Croatian HT on the 9th place (EUR 218k).

Top companies with the highest average daily turnover in the year-to-date period



Romanian Q3 GDP boosted by all components expect net exports

Bond, money and currency markets

IC MARKET ESPRESSO

InterCapital domestic bond quotes Bloomberg: INKA5 <GO>

Important: Please read the references at the end of this report to possible conflicts of interest and disclaimers/disclosures 3

INDICATOR CRO SLO SRB ROM BULGDP (YoY, %) 2,9 2,7 2,6 4,4 3,2ten-year yield (%) 3,0 3,4 6,5 2,1 1,9CPI headline (YoY, %) -0,5 0,6 1,5 -0,4 -0,6PPI (YoY, %) -2,3 -0,6 0,2 -0,5 -1,4ind. Production (YoY, %) 1,8 7,4 3,2 1,4 3,3retail (YoY, %) 3,5 8,7 5,2 10,0 2,0unemployment (YoY, %) 14,0 7,6 16,9 4,8 7,9budget balance (% GDP) -1,3 -2,7 -1,7 -0,8 -1,7public debt (% GDP) 86,7 86,2 77,0 38,4 26,7

Macroeconomic indicators

DUR. Zibor Euribor Belibor Robor(HRK) (EUR) (RSD) (RON)

O/N 0,54% n.a. 2,96% 0,50%1M 0,70% -0,37% 3,28% 0,64%3M 0,87% -0,31% 3,45% 0,81%6M 0,99% -0,22% 3,64% 1,05%9M 1,11% -0,14% n.a. 1,11%1Y 1,28% -0,08% n.a. 1,17%

Interest rates

bond curr. coupon price mid ytm

CROATIA

CROATI 18 EUR 5,875% 108,56 0,43%CROATI 22 EUR 3,875% 106,89 2,51%CROATI 25 EUR 3,000% 99,91 3,01%CROATI 17 USD 5,500% 101,63 1,96%CROATI 19 USD 6,750% 108,42 3,67%CROATI 20 USD 5,625% 108,58 4,04%CROATI 21 USD 6,375% 108,84 4,11%CROATI 23 USD 5,500% 105,35 4,52%CROATI 24 USD 6,000% 108,29 4,62%

SLOVENIA

SLOVEN 18 EUR 4,000% 105,42 -0,22%SLOVEN 18 USD 4,750% 103,90 1,95%SLOVEN 22 USD 5,500% 111,94 3,25%SLOVEN 23 USD 5,850% 114,19 3,37%SLOVEN 24 USD 5,250% 111,63 3,41%

SERBIA

SERBIA 17 USD 5,250% 102,63 2,43%SERBIA 18 USD 5,825% 104,73 3,39%SERBIA 20 USD 4,875% 101,80 4,27%SERBIA 21 USD 7,250% 111,61 4,53%SERBIA 24 USD 6,750% 101,82 6,45%

BULGARIA

BULGARIA 17 EUR 4,250% 102,57 -0,16%BULGARIA 22 EUR 2,000% 105,15 1,00%BULGARIA 24 EUR 2,950% 107,68 1,87%BULGARIA 27 EUR 2,625% 102,38 2,36%BULGARIA 35 EUR 3,125% 97,32 3,32%

ROMANIA

ROMANIA18 EUR 6,500% 110,08 -0,10%ROMANIA19 EUR 4,875% 113,56 0,20%ROMANIA20 EUR 4,625% 115,73 0,42%ROMANIA22 USD 6,750% 114,14 3,71%ROMANIA24 USD 4,875% 106,12 3,88%

Eurobonds

ask

local sovereign, currency clause

RHMF-O-19BA

RHMF-O-203E

RHMF-O-227E

RHMF-O-247E

local sovereign, HRK

RHMF-O-172A

RHMF-O-17BA

RHMF-O-187A

RHMF-O-203A

RHMF-O-217A

RHMF-O-257A

RHMF-O-26CA

1,00%

1,75% 1,46%

106,70 1,30%

05/03/2020 6,750% 115,70 116,70

10/07/2018 5,250% 106,20

121,50

1,51

25/11/2017

1,51

0,59%105,45105,056,250%

0,36%

101,551,32% 1,03%

106,87

197,10

08/02/2017 4,750% 100,65 100,75

5,375% 111,80 112,70

5,750% 118,30 120,30

bench.

spreadbid ask bid bid ask

m. duration

2,78 2,78

4,73

2,941,49% 1,23% 2,94

4,732,65% 2,39%

ticker maturity couponprice ytm

10/07/2024

05/03/2020 6,500% 115,80 116,70

29/11/2019

22/07/2022 6,500% 120,00

0,93%

0,99%

213,72

4,25

6,17

0,95

0,17 0,17

0,95

4,25

2,92

6,173,03% 2,77%

2,92

103,30 2,22% 1,99%08/07/2021 2,750%

3,00% 2,85%112,50111,304,500%09/07/2025

102,30

7,08 7,08

8,09 8,0914/12/2026 4,250% 110,40 111,60 3,04% 2,91%

IC.traderInterCapital.hr

One week before the general election there is quite a dull race between major parties inRomania, underpinned with soft macroeconomic news. The biggest parties, PSD andPNL, both give promises in respect of public wage hikes and tax cuts, hence hiding lack ofreal plans for improvement in respect of structural reforms which could boost Romanianeconomy in mid and long term.

If you bear in mind all tax cuts, wage and pension hikes, it is not surprising that personalconsumption growth is upholding the overall Romanian economy. Before we analyseGDP Q3 by components let’s just mention that labour market continued with positivetrend with ILO unemployment in October at 5.8% (vs. all time low @ 5.5%).

First estimates from National Institute of Statistics confirmed that GDP rose 4.6% YoY inQ3 2016 mainly driven by strong increase of personal consumption (8.9% YoY) whichcounts for 72.5% of total GDP. Second generator of GDP growth in Q3 was found ininvestments which grew by 5.3%, with a contribution of 0.8% and volume of 27.9% oftotal GDP. It is expected that capital formation could be more crucial in the followingperiod if you consider on the one hand relatively low absorption of EU funds this yearand technocratic government which had its hand tied considering big governmentinvestments on the other. Net exports contributed negatively again, reflecting increaseof merchandise imports, but in the coming period we expect this negative contributionthe ease a bit due to decelerated personal consumption.

Source: NIS, InterCapital

5,35,1

8,1

4,4

8,18,8

-7,1

-0,7

1,0

3,33,8

-8,50

-6,50

-4,50

-2,50

-0,50

1,50

3,50

5,50

7,50

9,50

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

%, Y

oY

Romanian GDP

Q1

Q2

Q3

Q4

Avg



Equity market in Slovenia was somewhat calm yesterday recording a EUR 1.8m turnover,with more than a half of the turnover achieved by Krka, which was the winner of the day byincreasing 1.6%. On the other hand, Gorenje and Zavarovalnica Triglav underperformed themost by dropping 2.8% and 2.1% respectively. The main index SBI TOP stagnated with a0.03% change on a daily basis.

Down to Bucharest, BET dropped by 0.4%, while the equity turnover reached RON 25.7m.The winner of the day was Electrica (+0.3%), while OMV Petrom and Fondul Proprietateadecreased the most, falling by 0.84% and 0.75% respectively. Later this day, BVB published amonthly report for regulated market indicating a 51% MoM slump (down to RON 33m) in theaverage daily equity trading value, but the same indicator for 11M was 2.3% higher YoY. Themarket cap of listed companies stood at RON 136bn.

In Belgrade, NIS took the spotlight by rising 2.9% and alongside with Aerodrom Nikola Tesla(+0.91%) boosted BELEX15 which grew by 1.34%. The total turnover of shares stood at theaverage daily turnover so far this year – EUR 0.2m. On Bulgarian stock exchange, the mostactive one, Chimimport's stock increased by 1.63%, while SOFIX decreased by 0.43%.

Various Performances of Regional Indices

Regional Equity Market

IC MARKET ESPRESSO


Even though the numbers from eVisitor cannot be precisely compared to last years’ arrivalsand overnights as the methodology of counting and collecting data has changed, it seemsthat the postseason recorded all-time high. Results for November were presented today ata meeting of the Croatian Tourism Board (HTZ) Council, showing a 33% rise in overnights.According to data from eVisitor, 16.6 million tourists visited Croatia in the first elevenmonths of this year (+10.2% YoY), while overnights increased 14% to 90.7 million. Director ofCroatian Tourism Board announced that the same growing trend in arrivals and overnightswill likely continue in December. Furthermore, he said that it is reasonable to expect furtherincreases in arrivals and overnights, as well as tourist spending in the next year.

More positive news on croatian tourism could be heard at yesterday's conference "Tourism- Challenges and Prospects'. Media focused on speakers who discussed investments in thefollowing years. According to the director of the consulting company Horvath HTL we couldsee up to EUR 2bn of investments, from which EUR 500m – 600m in 2017 and EUR 800min 2018. Croatian Minister of Tourism confirmed this figures adding that he does not expectthe new tax reform to reduce the investment cycle and harm tourism results.

Higher Overnights in Tourist Postseason

Croatian Equity Market

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SBITOP Index

Source: Bloomberg

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100

110

120

130

140

8-Dec-15 8-Mar-16 8-Jun-16 8-Sep-16

CRO Index

CRO10 Index

CROPLUS Index

Source: Bloomberg

85

90

95

100

105

110

115

120

125

8-Dec-15 8-Mar-16 8-Jun-16 8-Sep-16

BELEX15 Index

BELEXLIN Index

Source: Bloomberg

75

80

85

90

95

100

105

8-Dec-15 8-Mar-16 8-Jun-16 8-Sep-16

BET Index

BET-BK Index

Source: Bloomberg

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95

100

105

110

115

120

125

130

135

8-Dec-15 8-Mar-16 8-Jun-16 8-Sep-16

SOFIX Index

BGBX40 Index

Source: Bloomberg

Index fundamentals

Daily market snapshot

Banca Transilvania 1,46 Messer Tehnogas 4,1% Arenaturist -3,63%

Fondul Proprietatea 1,31 Metalac 3,8% Gorenje -2,84%

BRD 0,94 Eurohold Bulgaria 3,4% Zavarovalnica Triglav -2,12%

Krka 0,93 Ingra 3,3% Zagrebacka banka -1,88%

OMV Petrom 0,65 Industrial Holding Bulgaria 3,2% Pozavarovalnica Sava -1,69%

Petrol 0,57 NIS 2,9% Bucharest Stock Exchange -1,38%

Volume (EURm) Winners Laggards

Volume: EUR 5.71m

Volume: EUR 0.19m

Volume: EUR 1.81m

Volume: EUR 1.12m

Volume: EUR 0.19m

* ATPLRA ZA and ADRSPA ZA are excluded from CROBEX multiples and ratios due to large one-off event / Market snapshot includes only main index components

Day YTD 1YLast

Price EV/S P/EEV /

EBITDANet debt / EBITDA ROE (%) Div. Yld

CROBEX* 0,0% 16,9% 17,4% 1.975 1,18 22,01 9,53 2,24 5,0% 2,7%

SBITOP 0,0% 1,0% 0,9% 703 0,51 11,19 5,91 1,94 7,7% 5,2%

BELEX15 1,3% 10,9% 10,4% 715 0,85 31,35 5,81 0,72 2,3% 4,2%

BET -0,4% -1,7% -3,0% 6.888 0,86 16,92 2,86 -0,77 4,8% 7,8%

SOFIX 1,1% 23,2% 30,4% 568 0,90 13,60 6,92 1,31 4,6% 1,9%




U.S. equities rose on Tuesday, as a post-election rally continued, while investorsdigested key economic data and braced for two key central bank meetings.

The Dow Jones industrial average rose about 35 points to post a record closing high, withGoldman Sachs adding the most gains. The blue-chips index also posted its 11th recordclose since the election.

Earlier, investors have been undeterred by a number of events since the election,including the sharp rise in sovereign bond yields around the world and a key referendumin Italy on Sunday which led to Prime Minister Matteo Renzi's resignation.

Dow at Record High

Global Equity Market

IC MARKET ESPRESSO


day 1 Y YTD

North/South AmericaDOW JONES 0,18% 8,58% 10,48%

S&P 500 0,34% 6,51% 8,23%

NASDAQ 0,45% 4,53% 6,50%

S&P/TSX 0,20% 15,97% 16,26%

BOLSA 0,37% 5,74% 4,95%

BOVESPA 2,10% 35,08% 40,92%

MERVAL 1,39% 31,86% 47,62%

IPSA 0,19% 17,39% 14,51%

Asia/PacificS&P/ASX 200 0,91% 6,25% 3,44%

NIKKEI 225 0,74% -6,10% -2,82%

HANG SENG 0,47% 2,61% 3,96%

SHCOPM 0,71% -8,90% -8,96%

KOSPI 0,10% 1,44% 1,56%

TWSE 0,14% 9,58% 11,10%

SET -0,17% 13,53% 17,54%

BSE SENSEX 30 0,19% 3,58% 1,25%

Africa/Near East/RussiaFTSE/JSE 0,93% -4,64% -6,51%

XU 100 0,14% 2,20% 5,31%

Hermes 0,00% 67,10% 62,76%

Tel Aviv 100 -0,32% -5,67% -3,87%

MICEX 10 0,15% 19,83% 19,65%

RTS 0,30% 34,00% 40,43%

Western EuropeDJ EURO STOXX 50 1,57% -7,72% -5,10%

FTSE 100 0,49% 8,94% 8,61%

CAC 40 1,26% -2,62% -0,11%

DAX 0,85% -1,02% 0,30%

IBEX 35 2,64% -11,44% -6,82%

S&P/MIB 30 4,15% -19,42% -17,09%

SMI 0,85% -10,34% -10,27%

1,59% 5,48% 6,95%ATX

IndexChange (%)

S&P 500 SECTOR PERFORMANCE % Day % YTD % 1M % 3M % 6M % 1Y % Day % YTD % 1M % 3M % 6M % 1Y

CONSUMER DISCRETIONARY 0,3% 5,3% 5,0% 1,9% 3,9% 2,1% INDUSTRIALS 0,3% 16,7% 8,2% 6,5% 10,4% 14,7%

CONSUMER STAPLES 0,3% 0,1% -3,6% -6,8% -5,2% 0,4% INFO TECH 0,2% 9,6% -0,7% -0,4% 8,1% 6,0%

ENERGY -0,1% 22,7% 7,7% 6,2% 6,8% 20,5% MATERIALS 0,1% 15,2% 6,8% 2,7% 4,7% 11,8%

FINANCIALS 1,0% 19,1% 15,7% 16,2% 20,8% 16,1% TELECOM SERVICES 1,5% 10,5% 6,5% -5,4% -2,3% 10,7%

HEALTHCARE 0,2% -5,3% 0,2% -6,1% -5,2% -4,1% UTILITIES -0,2% 7,2% -4,7% -6,8% -6,4% 9,7%

STOXX EUROPE 600 SECTOR PERFORMANCE % Day % YTD % 1M % 3M % 6M % 1Y % Day % YTD % 1M % 3M % 6M % 1Y

AUTOMOBILES & PARTS 0,7% -10,7% 3,8% 1,2% 3,6% -11,8% INSURANCE -0,7% -10,6% 3,5% -1,1% -1,9% -12,0%

BANKS 1,0% 4,9% 2,1% -1,9% 3,8% 3,3% MEDIA 1,0% -14,3% 1,4% -8,4% -8,2% -15,6%

BASIC RESOURCES 1,1% -13,5% -1,8% -13,5% -13,2% -15,4% OIL & GAS -0,0% 14,4% 5,8% 3,3% 6,7% 12,2%

CHEMICALS 0,4% -2,0% 2,5% -1,8% 4,8% -3,5% REAL ESTATE 1,5% -8,4% 10,3% 9,7% 5,5% -10,0%

CONST. & MATERIALS 4,4% -9,1% 10,5% 14,1% 11,7% -11,1% RETAIL 2,8% -13,5% -3,5% -11,0% -10,8% -13,8%

CONSUMER GOODS -0,3% -16,8% 1,3% -5,0% -9,6% -16,4% TECHNOLOGY -1,0% 60,9% 12,3% 24,8% 39,0% 54,0%

FINANCIAL SERVICES 0,4% -10,4% -3,5% -12,1% -9,5% -12,6% TELECOM SERVICES 1,0% -21,3% -3,3% -9,5% -15,2% -22,8%

FOOD & BEVERAGE 0,2% -4,1% 1,1% -6,3% 2,9% -5,7% TRAVEL & LEASURE 0,3% 4,8% 5,3% -1,3% 3,5% 1,6%

HEALTH CARE 0,2% -15,2% 1,2% -8,4% -10,0% -14,8% UTILITIES 0,3% -8,8% 1,5% -2,9% -1,9% -12,9%

IND. GOODS & SERVICES 0,3% -2,7% -0,3% -6,6% -5,1% -5,3%




Today we are looking @ daily HTRA graph. It is testing key resistance that provides highfrom 2015 @ 170. Next resistance provides high from 23/12/2013 @ 178,5. Firstsupport provides green upward trend line. Additional support provides SMAVG50. RSI isin upward trend and it is on the edge of the overbought.

HTRA ZA - Testing resistance @ 170 (daily chart)

Technical Perspective - Region

Today we are looking @ daily DAX index. Again we saw test of resistance that provideshigh from 15/08/2016 @ 10800. Next resistance provides fibo 61,8. First supportprovides fibo 50. Next support provides SMAVG100. RSI is above 50 points.

DAX - Resistance @ 10800 (daily chart)

Technical Perspective - Global

We would be buyers in case resistance @ 170 gets breached.

Trading Suggestion:

We would be buyers in case resistance @ 10800 gets breached.

Trading Suggestion:

Technical Targets:10979… fibo 61,8

10802… high 15/08/201610736… last

10543… fibo 50 10531… SMAVG100

Technical Targets:178,50… high 23/12/2013

170,00… high 2015170,00… last

163,50… SMAVG50159,03… low 21/10/2016

IC MARKET ESPRESSO

Important: Please read the references at the end of this report to possible conflicts of interest and disclaimers/disclosures 6 IC.traderInterCapital.hr



Selected Equity Fundamentals (Trailing Basis) & Performance

Regional Equity Market; Fundamentals of Selected Companies

IC MARKET ESPRESSO


Company

Day YTD 1Y P/E P/BV P/CFO EV/SEV /

EBITDANet debt / EBITDA ROA (%) ROE (%) Dividend Div. Yld

Industrial

Koncar 2016-09 232,5 681,50 0,2% 4,1% 1,0% 11,58 0,74 17,29 0,45 5,94 -2,46 4,1% 6,4% 12,00 1,8%

Ericsson NT 2016-09 201,6 1.141,56 -0,2% 18,9% 23,1% 17,15 6,49 8,44 0,87 9,43 -1,35 11,9% 37,9% 100,00 8,8%

Petrokemija 2016-09 31,0 18,18 4,8% 38,4% 16,5% -3,31 2,28 15,20 0,45 19,27 14,31 -6,1% -69,0% 0,00 0,0%

Duro Dakovic 2016-09 48,8 48,41 0,9% 83,0% 106,4% -10,99 -36,92 -5,21 1,40 816,32 378,01 -5,7% n/a 0,00 0,0%

AD Plastik 2016-09 76,8 137,87 -0,4% 40,9% 48,0% 12,84 0,88 -19,52 0,97 7,37 2,79 3,4% 6,9% 12,00 8,7%

Gorenje 2016-06 142,2 5,82 -2,8% 26,5% 39,8% 138,15 0,39 3,31 0,44 6,39 4,75 0,1% 0,3% 0,00 0,0%

Cinkarna 2016-09 114,0 140,00 0,0% 84,2% 75,0% 11,26 0,78 11,92 0,53 3,57 -1,00 5,5% 6,9% 4,20 3,0%

Metalac 2016-06 26,5 1.600,00 3,8% 30,6% 37,9% 7,53 0,73 6,70 0,46 4,73 0,36 5,8% 9,6% 155,00 9,7%

Jedinstvo 2016-06 10,9 4.400,00 0,0% -13,7% -15,4% 4,24 0,27 -1,41 0,08 0,83 -1,56 3,2% 6,3% 211,76 4,8%

Alfa Plam 2016-06 48,2 34.000,00 0,0% 0,2% 6,3% 8,97 0,90 6,54 0,74 5,73 -2,22 7,9% 10,0% 1.000,00 2,9%

Messer Teh. 2016-06 110,1 13.102,00 4,1% 50,6% 61,8% 3,41 0,82 7,12 1,03 2,55 -1,85 22,4% 24,0% 1.801,00 13,7%

Gosa Montaza 2016-06 4,6 2.200,00 0,0% 29,4% 37,5% 4,64 0,55 -26,42 -0,07 -0,69 -4,26 7,1% 11,9% 142,00 6,5%

Neochim 2016-06 79,5 58,60 0,0% 26,3% 37,6% 6,05 1,57 4,47 0,57 4,06 0,36 19,4% 25,9% 0,80 1,4%

Monbat 2016-06 185,1 9,29 0,5% 16,1% 29,3% 17,94 1,94 -247,35 1,71 11,38 1,62 7,2% 10,8% 0,28 3,0%

MS Hydraulic 2015-12 123,8 6,20 1,6% 21,6% 27,5% 28,33 3,82 14,15 2,63 13,55 -0,83 11,7% 13,5% 0,22 3,5%

Last availab. FS Last price

Change

M. Cap( EURm)

Fundamental indicators

Utility

Electrica 2016-06 1.024,4 13,32 0,3% 9,2% 11,2% 8,52 0,72 5,70 0,35 1,92 -2,66 6,4% 8,5% 0,86 6,5%

Transgaz 2016-06 782,6 299,00 -0,3% 7,9% 7,6% 7,84 1,00 6,41 1,50 3,46 -1,30 8,7% 12,7% 27,61 9,2%

Transelectrica 2016-06 474,2 29,10 -0,3% -0,2% 0,9% 7,62 0,71 2,86 0,68 2,82 -0,22 5,5% 9,3% 2,65 9,1%

Janaf 2016-09 681,5 5.100,00 0,0% 13,3% 13,4% 18,34 1,41 10,58 6,22 8,12 -1,33 7,1% 7,7% 132,15 2,6%

Energy

INA 2016-09 4.310,0 3.250,00 0,0% 10,1% 0,0% -22,34 3,04 19,13 2,38 19,70 1,69 -7,2% -13,6% 0,00 0,0%

NIS 2016-09 980,9 742,00 2,9% 23,7% 19,7% 10,66 0,62 3,65 1,19 6,34 2,87 3,1% 5,9% 24,69 3,3%

OMV Petrom 2016-09 2.959,3 0,24 -0,8% -19,0% -23,9% -16,58 0,50 2,97 0,84 2,64 0,05 -1,9% -3,0% 0,00 0,0%

Romgaz 2016-09 2.082,2 24,30 -0,6% -10,7% -13,1% 10,04 1,00 5,83 1,97 3,88 -1,37 9,1% 10,0% 2,70 11,1%

Nuclearelectrica 2016-06 327,8 4,89 -0,2% -23,8% -28,4% 13,71 0,20 2,27 0,91 2,43 0,03 1,2% 1,5% 0,33 6,7%

Pharma

Krka 2016-06 1.756,1 53,55 1,6% -17,9% -14,7% 15,14 1,18 7,02 1,39 5,50 -0,42 6,0% 7,8% 2,65 4,9%

Galenika Fito. 2016-06 59,9 2.797,00 0,0% 17,8% 19,3% 7,75 1,08 18,11 1,42 5,23 -1,71 12,4% 14,0% 80,00 2,9%

Sopharma 2016-06 205,1 2,98 1,2% 8,6% 18,6% 16,54 0,88 8,00 0,68 5,53 1,84 2,9% 5,3% 0,07 2,4%

Construction

Ingra 2016-09 5,6 3,13 3,3% 7,2% 14,2% 0,52 0,47 -1,65 10,85 3,55 3,32 9,0% 89,6% 0,00 0,0%

Tehnika 2016-09 11,9 474,00 0,0% 68,7% 58,0% -23,97 0,29 -3,13 0,72 12,44 9,54 -0,4% -1,2% 0,00 0,0%

IGH 2016-09 15,7 192,79 -2,0% 83,0% 119,1% -1,79 7,98 9,26 3,70 -10,02 -7,87 -10,5% -446,0% 0,00 0,0%

Viadukt 2016-09 18,1 298,72 -0,8% 0,3% 17,5% -32,97 0,39 5,38 0,39 3,95 2,07 -0,4% -1,2% 0,00 0,0%

Hidroelektra 2016-09 3,1 37,91 0,0% 72,3% 89,6% -0,31 -0,20 -1,21 0,84 -1,56 -1,18 -27,7% n/a 0,00 0,0%

Dalekovod 2016-09 46,0 14,02 -0,6% 2,5% -3,8% 20,95 1,00 5,97 0,84 9,35 6,00 1,0% 4,8% 0,00 0,0%

Energoprojekt 2016-06 125,8 1.420,00 0,0% 36,9% 54,3% 14,94 0,80 15,80 0,43 6,00 -0,51 2,4% 5,3% 20,00 1,4%




Retail

Tisak 2016-06 48,1 151,99 1,3% -15,6% -10,6% 59,38 1,41 1,13 -0,02 -0,60 -4,84 0,5% 2,4% 0,00 0,0%

Medika 2016-09 64,7 16.150,00 0,3% 29,9% 29,2% 8,18 1,09 -13,95 0,29 9,79 3,50 2,7% 13,4% 0,00 0,0%

Mercator 2016-06 420,3 69,00 0,0% -15,9% -13,8% 35,33 0,66 7,21 0,51 10,40 7,06 0,5% 1,9% 0,00 0,0%

Petrol 2016-06 661,4 317,00 0,3% 23,9% 23,6% 9,18 1,19 4,14 0,28 7,49 2,78 4,9% 13,0% 12,60 4,0%

Food

Viro 2016-09 72,3 393,24 0,0% 25,9% 21,0% -53,27 1,32 -4,69 0,99 13,08 5,62 -0,8% -2,5% 0,00 0,0%

Jamnica 2016-09 402,6 137.200,00 0,0% 20,7% 20,4% 9,08 1,59 6,79 0,78 5,55 -2,07 11,0% 17,5% 2.197,00 1,6%

Cakovecki Mlin. 2016-09 89,1 6.400,00 1,6% 28,6% 28,0% 12,57 1,11 6,43 0,49 6,48 -1,32 6,1% 8,8% 60,00 0,9%

Kras 2016-09 98,7 541,83 0,3% 10,1% 15,4% 37,05 1,21 11,99 0,89 10,92 1,93 1,7% 3,3% 0,00 0,0%

Ledo 2016-09 455,9 10.950,02 0,0% 21,4% 18,0% 11,44 1,76 11,18 1,20 6,70 -1,69 10,9% 15,3% 425,01 3,9%

Belje 2016-09 26,8 24,57 -0,5% 0,9% 5,0% -4,48 0,10 1,46 0,91 9,73 8,33 -1,2% -2,3% 0,00 0,0%

Atlantic Grupa 2016-09 386,5 874,14 -0,1% 5,6% 5,3% 11,86 1,41 13,27 0,90 8,74 3,31 4,6% 11,9% 13,50 1,5%

Sojaprotein 2016-06 76,7 635,00 0,3% -28,4% -21,5% 23,24 0,79 111,31 0,89 11,36 4,28 1,6% 3,4% 0,00 0,0%

Infrastructure

Luka Ploce 2016-09 31,4 560,21 0,0% -19,3% -19,0% -11,91 0,58 -22,37 0,28 -3,68 13,67 -4,6% -4,9% 0,00 0,0%

Luka Rijeka 2016-09 81,1 45,35 0,0% 5,2% 10,4% -400,66 0,89 -43,58 3,19 -315,02 101,41 -0,2% -0,2% 0,00 0,0%

Luka Koper 2016-06 320,0 22,86 -0,6% -0,6% -0,8% 8,77 0,97 4,85 2,13 5,62 1,27 7,5% 11,1% 1,13 4,9%

Aerodrom N.T. 2016-06 308,6 1.110,00 0,9% -3,7% -0,1% 15,36 1,45 15,66 4,54 7,87 -0,97 8,6% 9,4% 60,25 5,4%

Telecommunications

HT 2016-09 1.840,4 169,47 0,7% 17,9% 16,6% 14,34 1,16 6,08 1,47 3,77 -1,36 6,9% 8,1% 6,00 3,5%

Telekom Slo. 2016-09 459,8 70,36 -0,2% -3,6% -10,4% 24,04 0,66 2,35 1,19 4,33 1,95 1,4% 2,7% 5,00 7,1%

Shipping

Atlantska Plov. 2016-09 61,1 330,00 -0,9% 139,4% 159,6% -2,75 0,77 10,44 5,11 -19,67 -13,52 -9,2% -28,2% 0,00 0,0%

Jadroplov 2016-09 8,5 39,17 -2,9% 66,8% 84,3% -0,39 0,19 -0,87 9,58 -4,91 -4,25 -19,9% -47,8% 0,00 0,0%

Uljanik Plovidba 2016-09 12,2 158,66 0,0% 12,9% 24,3% -0,18 2,83 0,31 6,97 -3,38 -3,12 -40,2% -1593,2% 0,00 0,0%

TNG 2016-09 83,1 71,77 0,0% -4,7% -6,1% 14,34 1,01 5,75 5,46 11,08 5,86 3,1% 7,0% 3,95 5,5%



IC MARKET ESPRESSO


Company




Change

M. Cap( EURm)


Tourism

Liburnia Riviera 2016-09 142,5 3.550,00 1,4% -8,2% -2,0% -204,96 1,37 11,10 4,26 9,28 0,42 -0,5% -0,7% 0,00 0,0%

Valamar Riviera 2016-09 566,6 33,90 0,4% 41,7% 42,9% 16,49 1,86 7,77 3,48 9,95 1,51 6,4% 11,3% 0,60 1,8%

HUP Zagreb 2016-09 149,7 2.613,00 2,8% 37,3% 37,3% 15,10 1,41 14,43 4,13 9,76 1,05 6,4% 9,4% 15,00 0,6%

Maistra 2016-09 356,7 245,77 1,3% 7,3% 20,3% 18,92 1,70 8,21 3,60 9,74 2,26 5,2% 9,0% 0,00 0,0%

Turisthotel 2016-09 139,1 2.860,01 0,0% 10,1% 8,4% 13,40 2,76 10,57 4,33 9,31 -1,58 16,0% 20,6% 45,00 1,6%

Plava Laguna 2016-09 380,4 5.250,00 -1,3% 18,7% 19,3% 11,71 1,36 7,44 3,05 7,93 0,38 7,6% 11,6% 0,00 0,0%

Arenaturist 2016-09 118,8 410,40 -3,6% 24,8% 29,8% 31,05 1,11 7,75 3,22 10,15 3,33 1,9% 3,6% 0,00 0,0%

Albena 2016-06 133,2 60,98 2,0% 22,0% 32,6% 53,40 0,64 12,60 3,73 13,34 3,10 0,9% 1,2% 0,45 0,7%

N/A




Dividend Div. YldInsurance

Sava Re 2016-06 224,7 13,05 -1,7% 1,8% -3,8% 7,3 0,8 0,5 5,7 92,4% 5,7% 1,8% 10,4% 0,80 6,1%

Triglav 2016-06 515,1 22,66 -2,1% -3,6% -6,0% 7,4 0,7 0,6 5,1 92,6% 6,2% 2,0% 10,0% 2,50 11,0%

CO 2016-09 330,7 5.800,00 0,0% -0,3% -0,3% 15,4 1,0 0,8 4,1 100,2% 4,9% 1,5% 6,4% 0,00 0,0%

P/ELast

availab. FS Last price Day YTD 1YM. Cap(EURm)

Net margin ROA(%) ROE(%)P/BV P/GWP Leverage

Combined Ratio

Banks

ZABA 2016-09 2.127,3 50,09 -1,9% 37,8% 36,1% 9,68 0,87 6,89 91,2% 2,7% 1,0% 1,3% 9,0% 0,00 0,0%

PBZ 2016-09 1.961,5 775,40 0,7% 29,4% 28,2% 9,51 1,04 5,72 85,1% 3,2% 1,6% 1,9% 11,0% 10,16 1,3%

AIK Banka 2015-12 140,9 1.750,00 0,0% -4,8% -21,1% 5,09 0,33 3,42 78,5% 4,0% 0,5% 1,9% 6,5% 0,00 0,0%

Komercijalna B. 2016-06 220,9 1.760,00 0,6% 8,4% -3,6% -2,61 0,45 7,18 56,5% 3,3% 1,2% -2,4% -17,3% 63,00 3,6%

Banca Transil. 2016-09 1.925,1 2,38 0,2% 17,8% 18,0% 10,19 1,59 8,82 71,0% 4,6% 0,0% 1,8% 15,6% 0,39 16,4%

BRD 2016-09 1.719,7 11,10 -0,5% -8,3% -6,7% 10,86 1,15 7,48 76,5% 3,1% 1,6% 1,4% 10,6% 0,32 2,9%

CCB 2015-12 85,0 1,47 0,8% 45,3% 43,0% 12,10 0,43 12,53 55,3% 1,8% 0,9% 0,3% 3,5% 0,00 0,0%

FIB 2016-03 164,7 2,93 2,7% 35,5% 41,3% 8,11 0,41 11,12 71,1% 3,2% 1,0% 0,5% 5,1% 0,00 0,0%

Dividend Div. Yld

Change

Last availab. FS Last price Day YTD 1Y Leverage

Loans vs. Deposits

M. Cap(EURm) P/E P/BV ROA(%) ROE(%)

NII / assets

NF&CI / assets


Funds / REIT's

Fondul Propriet. 2016-06 1.925,9 0,79 -0,8% 4,4% 3,7% 132,73 0,74 1,14 -30,8% -29,9% -33,0% 0,6% 0,6% 0,05 6,3%

Bulgarian REIT 2016-03 22,2 2,15 1,6% 38,3% 48,7% 27,58 0,64 N/A N/A N/A N/A 2,1% 2,3% 0,00 0,0%

Adv. Terra. REIT 2016-06 88,3 2,03 -0,2% -1,9% 2,0% 23,28 0,78 N/A N/A N/A N/A 3,1% 3,3% 0,10 4,9%

NAVPS Dividend Div. YldLast

availab. FS Last price Day YTD 1YM. Cap

Change

Disc. to NAV (3Y) ROA(%) ROE(%)


Disc. to NAV (curr)

Disc. to NAV (1Y)P/E P/BV

Stock Exchange

BVB 2016-06 48,6 28,50 -1,4% 5,6% -3,1% 46,43 2,11 7,75 4,01 33,28 -16,38 2,8% 4,5% 0,87 3,0%

Diversified

Adris Grupa 2016-09 1.187,0 454,76 -0,8% 24,7% 22,8% -10,39 0,88 -39,99 1,50 n/a n/a -4,3% -8,5% 15,00 3,3%

Podravka 2016-09 353,3 374,16 -0,1% 11,1% 13,6% 6,36 0,93 4,92 0,88 7,63 2,31 8,2% 14,6% 7,00 1,9%

Industrial Capital 2016-03 34,8 4,38 0,2% 33,9% 37,3% 5,47 0,55 3,17 0,23 1,67 -1,05 8,7% 10,0% 0,00 0,0%

Industrial Hold. 2015-12 38,4 0,97 3,2% 5,4% 14,1% -8,70 0,26 4,53 1,87 13,06 7,80 -1,9% -2,9% 0,00 0,0%

Stara Planina 2016-06 66,6 6,20 1,8% 57,0% 72,2% 9,02 0,80 5,94 0,52 3,36 -1,37 7,6% 8,9% 0,21 3,3%

Holding Varna 2016-06 89,4 33,40 1,2% 36,9% 44,0% 212,23 1,04 17,64 5,74 29,66 14,09 0,2% 0,5% 0,00 0,0%

Chimimport 2016-03 200,9 1,64 0,9% 19,7% 15,5% 6,22 0,26 2,09 N/A N/A N/A 0,8% 4,1% 0,00 0,0%

Eurohold 2016-03 47,2 0,73 3,4% 0,3% -1,4% -0,84 0,78 3,83 N/A N/A N/A -11,0% -91,9% 0,00 0,4%



IC MARKET ESPRESSO


Company




Change

M. Cap( EURm)





Overview of Investment Recommendations

InterCapital Research Coverage Universe

IC MARKET ESPRESSO


Common Common

STRONG BUY 582,30

Preferred Preferred

STRONG BUY 518,90

Fondul

Proprietatea

23 March

2016

STRONG

BUY0,99 0,79 25,3%

-managed by Franklin Templeton, a top class

fund management company

-high exposure to energy sector

-significant discount to NAV

-about 60% of the fund's NAV is made by

unlisted companies

-possible privatizations of portfolio

companies

Đivo Pulitika

AD Plastik

Group137,87 -100,0%

- stable dividend payment

- Edison projekt and recovery in Europe

- presence in Russia

89,32

- consolidation of suppliers in the

automotive industry

- exposure to cyclic automotive sector

14 July

2015

BUY

- attractive dividend yield

- Standard & Poor’s "A-" rating

with stable outlook

Triglav

Group

3 May

2016

UNDER

REVIEW

HOLD 28,58

NIS

Group

9 September

2015742,00 -27,4%

- attractive valuation in relation to peers

- high domestic market share

- potential for development outside Serbia

- lack of transparency

- macroeconomic pressures

- dependence on oil prices

and refining margins

26,9%

- stable structure of debt

- risk of permanent competitive

pressure on prices

Đivo Pulitika

Group

Telekom

Slovenije

1 October

201570,36

Đivo PulitikaBUY 954,34

- restructuring of operations in progress

- risk of a large number of litigations

- leading regional insurer

- potential for further expansion

in Ex-Yu countries

- one of the largest hospitality groups

- multi-destination portfolio in key Adriatic

regions, Istria and Dubrovnik

- quality brand/product portfolio

- strong position on Ex-Yu markets

- strategic alliance with Panasonic

Krešo Vugrinčić

Đivo Pulitika

Đivo Pulitika

5,82 -15,8%

22,66 26,2%

- lack of economies of scale

- dependence on input prices as well as

currency translation differences

- potential expansion of the

accommodation portfolio via M&A

- dependence on tourism development

Đivo Pulitika

STRONG

BUY4,90

23 February

2016317,00 10,4% Đivo Pulitika

Krka Group17 November

201653,55 -100,0%

- exposure to new markets (Russia)

- dual listing in Warsaw

- ownership restructuring

- strong retail player

- strong fundamentals

- continuing sales growth

despite crisis effects

- stable cash flow

- high level of debt

STRONG

BUY350,06

UNDER

REVIEW

Recommend-

ationTarget price Last price Difference

-5,0%

-10,9%

11 July

2016874,14 9,2%

11 May

2015SELL 1017,10 1.141,56

Investment Thesis

- large share of foreign sales

- substantial cost-cutting potential

- divesting as a profitability

growth opportunity

- moderate level of debt

- strong cash position

- a strategic shift from a tobacco based

company to an insurance based company

- high profitability in the tourism segment

and lucrative potential for further growth in

the insurance segment

Analyst

Kreso Vugrincic

Končar

Group681,50 15,5%

03 August

2015BUY 786,87

Ericsson

Nikola Tesla

CompanyLast

research

Adris Group19 June

2015

610

Đivo Pulitika

Podravka

Group

25 October

2016

Hrvatski

Telekom169,47

374,16

29 January

2016

Đivo Pulitika

454,76 14,1%

-100,0% Đivo Pulitika

-4,5%

- weak revenue growth potential

- profitability above peer

group's average

- dividend player

- low level of debtBUY 160,95

UNDER

REVIEW

Valamar

Riviera

27 July

201633,90 -100,0%

SELL 538,68

- historically inconsistent strategy related to

often changes in management

- future capacities rely on strong CAPEX and

Slovenia's investments in railway

UNDER

REVIEW

Kreso Vugrincic

- high return on equity

- largest dividend yield

on Croatian market

- foreign markets as an opportunity

- high dependence on government deals

- best in the class standards of corporate

governance

- continuing profitability improvements

- strong presence in the region

- diversified product portfolio and vertically

integrated business mode

- growing presence in Eastern

European markets

- dependence on telco investments

- majority stake owned by

the government

- profit margin presssure

Đivo Pulitika

Atlantic

Grupa

Đivo Pulitika

Petrol Group

Luka Koper13 October

2015BUY 25,66 22,86 12,3%

- attractive valuation compared to peer port

operators

- recovery of regional economies and their

trade with the rest of the world

Krešo Vugrinčić

Đivo Pulitika

Tankerska

Next

Generation

24 August

2016HOLD 65,00 71,77 -9,4%

- dislocation of refineries

- experienced fleet manager

- attractive cost structure compared to peers

- possible asset play

- stable earnings due to time charters

- complete exposure to a single market

segment

Gorenje

Group

17 November

2015

Sava Re

Group

30 November

2015

STRONG

BUY17,22 13,05 32,0%

-successful integration of Zavarovalnica

Maribor

-growth opportunities in the regional

insurance markets

-possible interest rate hikes

-absence of major loss events pushes up

results for now

Đivo Pulitika




About us

InterCapital Group

IC MARKET ESPRESSO


InterCapital is an independent investment company established in 2001, and is one of the leading companies fortrading of financial instruments, asset management and investment banking services in the Republic of Croatia.Our mission is to further advance the ongoing development of our domestic capital markets through the introduction and implementation of innovative financialproducts, know-how and sophisticated international standards in financial mediation services. In doing so, we aim to provide superior returns to our diverse customerbase. Experience, knowledge, dedication, reputation and ethical conduct are at the heart of our business. These characteristics are uncompromisingly embedded in eachof our employees, ultimately guaranteeing professional quality and dedication in our approach to clients, our product portfolio and overall mission achievement.The InterCapital Group is headquartered in Zagreb and employs more than 40 individuals.

Our services:

BROKERAGE SERVICES (tel: + 385 1 48 25 896, mail: [email protected])We specialize in offering of full service brokerage services to foreign and domestic institutional clients & HNWI with expert knowledge in trading with financialinstruments who desire to trade in significant volumes. Becoming our client enables you to trade securities listed on domestic stock exchanges, as well as securities andfinancial derivatives traded in global markets. Our online trading platform, IC.trader, enables fast and direct access to domestic and international markets and offers realtime monitoring and trading with financial instruments on both the Zagreb Stock Exchange and the majority of stock exchanges worldwide.

FIXED INCOME DEALING (tel: + 385 1 48 25 854, mail: [email protected])InterCapital Securities is the top fixed income trader according to bond trading volume on Zagreb Stock Exchange fourteen years in a row. Services offered by thecompany include market making on Croatian government bonds, as well as trading Croatian, Serbian, Slovenian, Romanian and Bulgarian fixed income instruments. Ourspecialties also encompass research services covering MM and FI markets (both domestic and international), providing expert opinions and developing trading ideas inclose cooperation with our clients.

ASSET MANAGEMENT (tel: + 385 1 48 25 868, mail: [email protected])Extensive investment experience in the regional and global financial markets has enabled us to develop most advanced tailor-made asset management solutions. Ourreputable market position has been built on the foundation of long-term and personal relationships with every single client. Whether we are dealing with wealthyindividuals, corporations or institutional investors, our approach to managing their assets is rooted in thorough understanding of their unique needs and constraints. Foreach one of those clients we offer a broad range of products, including both UCITS and alternative funds as well as discretionary asset management.

INVESTMENT BANKING (tel: + 385 1 48 25 866, mail: [email protected])Investment Banking helps companies improve their competitiveness by defining and implementing optimal financial strategies, which is a prerequisite for survival intoday’s dynamic business environment. As a highly specialized segment of the financial services industry, investment banking requires expertise of local financialmarkets, knowledge of specific needs facing companies and capabilities in structuring and executing optimal solution(s) with the end goal of creating new value for theclient. Our investment banking activities are divided into two streams:

financing through the capital markets (debt issues (commercial papers & bonds) and equity issues (public and private equity offerings), as well as official marketlistings

financial advisory services (mergers and acquisitions, financial analysis and company valuations, due diligence services, business restructurings and spin-offs,MBO and ESOP programs)

INSURANCE BROKERAGE (tel: + 385 1 54 96 166, mail: [email protected])InterCapital Risk is specialized in obtaining advanced insurance and reinsurance solutions not only on domestic insurance market but also on established markets likeLloyd’s of London, Bermuda etc. Managing operational risks and insurance brokerage is our core business, while courtesy, innovation and professionalism are the driversof our business philosophy. Although InterCapital Risk is a new insurance brokerage and risk management operation on the market, its employees are proven specialistsin this business with considerable success records.

CUSTODY SERVICE (tel: + 385 1 48 25 844/845, mail: [email protected])With the continued monitoring of our clients’ needs and investing in the development of new and increasing the quality of existing services, we have developed asecurities custody service. InterCapital offering its clients trading on the domestic, as well as on foreign stock exchanges, enables to simultaneously perform followingservices:

payment and settlement of securities in the world’s leading markets; storage and safekeeping of securities in various global depository; managing investment positions with maximum professionalism and discretion; continuous reporting to clients; collection of inflows generated from interests, dividends and other income relating to assets in the custody account and monitoring of other corporate actions.

These services can be achieved with the minimal additional time and administration, as well as maximum flexibility and support ofour professional employees. Software support is achieved through the incorporation of custodial services through IC.trader trading platform.

iCAPITAL (tel: + 385 1 48 25 897, mail: [email protected])iCapital.hr has been designed and implemented as an investment and educational portal, providing information needed when making investment decisions, all available inone place. On iCapital.hr you can track market trends of domestic and foreign stocks, using technical and fundamental analysis, monitor daily changes in the top 10shareholders of the Zagreb Stock Exchange, vote in Sentiment surveys, monitor the performance of own portfolios, read daily market reviews and comments, participatein discussions through the Forum, compare Croatian investment funds, as well as play and inform yourself. Visit us on www.icapital.hr - the leading Croatian Communityof traders and investors.


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Notice to Investors and Explanation of Investment Recommendations

Disclaimer

IC MARKET ESPRESSO

„IC Market Espresso“ is a Recommendation that proposes investment strategy in terms of one or more financial instruments or the Issuer offinancial instruments, including opinions about current or future value and price of these instruments. Market Espresso is published every workday.The first issue was published on 2 January 2008, while the technical analysis of Croatian equities and index was introduced on 1 September 2008.Information in this report is intended for informative purposes only and does not represent the solicitation to buy or sell any financial instruments orparticipate in any particular trading strategy.

Market Espresso is based on publicly available information (Stock Exchanges, Bloomberg, financial reports of Issuers, companies' management,business and other websites). Although we believe our information and price quotes to be reasonably reliable, we do no guarantee their accuracy orcompleteness. In addition, the price or value of financial instruments described in this report may fluctuate and realize gains or losses. InterCapitalSecurities Ltd. does not assume responsibility for any damage caused by the use of published information and projections contained in this reportOpinions in this report constitute the current judgement of the author/s as of date of this report and are subject to change without notice.

Recommendations in IC Market Espresso are based on fundamental analysis and instruments and rules of technical analysis. Technical analysis is avaluation method of financial instruments made by analysing statistically generated market activities such as historical prices and trading volumes.Technical analysis usually uses various types of graphical displays, on the basis of which special techniques try to predict future trends. The maintask of technical analysis is to attempt to identify historical price movements and accordingly identify possible future trends.

Fundamental analysis is a financial analysis of industries and companies based on factors such as sales, assets, profit, products or services,markets and management. In conducting fundamental analysis, InterCapital Securities Ltd. uses various methods to determine a value of the Issuer.Among the rest, analysis of comparable companies, discounted cash flow and other methods are being used. Although InterCapital Securities Ltd.uses models generally accepted in the financial industry and theory, the results of these models depend on plans and information obtained from theIssuer as well as subjective opinions of analysts.

The authors of technical and fundamental analyses in IC Market Espresso are Đivo Pulitika, Margareta Maresić and Marcel Dimač. They areemployees of InterCapital Securities Ltd. registered in Zagreb, Masarykova 1. InterCapital Securities Ltd. is supervised by Croatian Financial ServicesSupervisory Agency (HANFA).

Fundamental rating values of an Issuer are given according to the following scale:

•Strong buy - equities with expected absolute revenue of more than 20% in the monitored time period•Buy - equities with expected absolute return of 10%-20% in the monitored time period•Hold - equities with expected absolute return of -10% to 10% in the monitored time period•Sell - equities with expected absolute return below -10% in the monitored time period•Under review - an issuer might be placed Under Review due to new information which is not included in the analysis.

Up to August 14, 2014 the Hold recommendation was used for equities with an expected return of 0% to 10%, while the Sell recommendation wasused for equities with an expected negative absolute return. Criteria for other recommendation remained unchanged.

InterCapital Securities Ltd. is in possession of the following equities:

Analysts engaged in creation of IC Market Espresso and/or related persons are not in possession of significant financial interests in one or morefinancial instruments which are subject to recommendation or significant conflicts of interest in relation to any of the issuers in accordance withArticle 475 of the Capital Market Act.

The company InterCapital Securities Ltd. acts as a market maker for ADPLRA ZA, PODRRA ZA, HTRA ZA, KOEIRA ZA, TPNGRA ZA, ATGRRA ZA andRIVPRA ZA.

Issuer recommendations stated in IC Daily - Market Espresso are not declared to the Issuer before they are published. In the last 12 months periodInterCapital Securities Ltd. served as a listing agent for the TPNGRA ZA shares on the Official market of the Zagreb Stock Exchange. Inc.

Any investments indicated in the report constitute risk, are not readily available in all jurisdictions, can be illiquid and may not be suitable for allinvestors. Value or income realized on any one investment mentioned in the report may vary. If a financial instrument is denominated in a currencyother than an investor's currency, a change in exchange rates may adversely affect the investment. Past performance is not necessarily indicative offuture results. Investors must make their own informed investment decisions without depending on this Recommendation. Only investors withsufficient knowledge and expertise in financial dealings who are able to evaluate risk and return may consider investing in any form of securities ormarkets indicated herein.

Protection of copyright and data base contained in this Recommendation is of great importance. The report may not be reproduced, distributed orpublished by any person for any purpose without prior consent given by InterCapital Securities Ltd. Please cite source when quoting. All rights arereserved.

Number Share

Companies which InterCapital

Securities Ltd. provided investment

banking service within last 12 months

Strong Buy 6 31.6% -

Buy 7 36.8% TPNG-R-A

Hold 2 10.5% -

Sell 2 10.5% -

Under Review 2 10.5% ADPL-R-A

3Q 2016 (1 July - 30 September 2016)

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