Erste Bank senkt Kursziel auf 6,20 Euro
No revolution
– Last week’s AGMs of both ECO and conwert were rather turbulent, but ultimately no major decision against the current management and major owners was taken. A dividend proposal was rejected, but we expect the company to start paying dividends in 2011 for fiscal year 2010.
– The strategy presentations of ECO and conwert were somewhat disappointing for us. We would have hoped for an announcement of a search for a strategic partner, a takeover and integration, or something similar. Instead, ECO plans a stand-alone strategy to actively develop its properties. However, we still see a small chance for a buyout in the year 2011, when economic conditions will have improved further.
– The external management of ECO by conwert could be a certain drawback in the search for a strategic partner. conwert shows a EUR 37mn book value of ECO’s management company in its financial statements, which is based on expected fees and profits from the management of ECO.
– We believe that ECO will benefit from the moderate improvement of the overall property market and the stable low interest environment. The biggest risk would be a failure of the three major redevelopments in Austria (Euroshopping Center/Graz, Wiener Straße/Brunn am Gebirge [Cosmos] and the Traunpark in Wels).