Good value for low price

– EUR 6.4 target price and Buy rating confirmed: Based on our revised estimates we confirm our target price, which is based on a 65/35 weighting of DCF and expected NAV. The share of the DCF result was increased from 60% to 65% to account for the substantial property sales already implemented.

– EPS estimates increased for 2009 and 2010: We increase our EPS estimates for 2009 from EUR -0.50 to EUR -0.06 and for 2010 from EUR 0.62 to EUR 0.72. For 2011, we lower our estimate to EUR 0.72 (from EUR 0.76). All changes mainly result from the revaluation result.

– FFO (cash profit after interest and taxes): We expect the company to achieve an FFO of EUR 13-15mn p.a. (EUR 0.40 - 0.44 per share) in 2010/11. The negative FFO in 2009 is based on property sales below historical acquisition costs (est. EUR 23mn loss).

– Peer group: A comparison with the other Austrian listed real estate stocks clearly shows the attractiveness of ECO. We see clear discounts based on nearly all relevant multiples.

– Strategic direction: ECO’s 24.9% shareholder conwert is still investigating strategic options for ECO Business-Immo. A full property sell-off has become less likely, a strategic partnering more likely.

– Financing situation: The refinancing requirement until year-end amounts to EUR 14mn, whereby there are already final commitments for the main part of this. Cash amounted to EUR 18.5mn as of Sep. 30, 2009.