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20%, we confirm our Buy recommendation on the stock. Due to
the lack of an immediate stock price trigger, investors have to wait for improved results and the start of
dividend payments next year.
– 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).
