TheChek News Flow

--> Interesting Report, I stronlgly Believe this stock is a strong Buy, have a look to this report attached. Big exposure to the Africa...Infrastructure...

the stock is not very well covered with only Credit Suisse Covering, i will send you the report in the new few minutes.

have a look

Laurent

Mota Engil - Ready for the new Emerging Markets

* We reinitiate coverage of Mota-Engil with a Buy rating.

Mota is among the few Engineering and Construction (E&C) players with a deep know-how and successful track record in the next emerging market: Sub-Saharan Africa (67% of 2013 EBITDA). This should translate into several growth opportunities given the region’s infrastructure deficit: construction spending is expected to post a 9% 2008-20E CAGR and Mota should grow by a 7.5% 2013-18E CAGR. Mota holds a 80% stake in its listed African subsidiary –Mota-Engil Africa (MEAFR).

* But Mota is not only Africa, it is also LatAm (9% of EBITDA) and Europe (mainly Portugal and Poland). 

With recent awards LatAm (mostly Mexico) has gained significant weight in the backlog (46% of the total). Mota’s backlog reached an historical peak in 9M14 of €4.4bn and the company repeated a maximum orderbook measured in months (22). Mota’s backlog increased by 19% YoY in 9M14, indicating solid growth for 2015E.

* Despite backlog growth, we expect 2015E to be a tough year:+6% and +1% sales and EBITDA growth respectively. Our

cautious stance is based on a deceleration in MEAFR due to weaker activity in Angola. Angola is MEAFR’s main sales contributor (c16% of the backlog) and should face a sharp slowdown as the fall in crude oil prices reduces infrastructure investment (oil rents account for 41%-43% of GDP).

* Mota’s share price has collapsed (-60%) since it reached its 5-year peak of €6.0/sh in July 2014. This performance was mostly explained by: (1) the cancellation of the MEAFR IPO (it is now listed but with only a 6% free-float) due to the bankruptcy of BES, leading to foreign investors fleeing from Portuguese stocks; (2) poor cash-flow generation in 9M14 due to strong investment in Working Capital; and (3) the recent plunge in oil prices.

* We believe that the current share price already partly discounts a recession in Angola and see the stock as deeply

undervalued when considering our YE15 TP of €4.60/sh and the implicit reference price for Mota, ie, €3.58/sh, when using the MEAFR’s current stock price.