Bulgarian investment company Elana Trading has launched coverage of local blue-chip drug marker Sopharma with a “market perform” recommendation, Elana said a statement released on December 11, as quoted by SeeNews wire agency. The one-year price target is 9.73 leva but in the light of the current market euphoria in Bulgaria it is more probable that investors will pursue a higher price of 30 to 35 times the net profit for H2 2007 and H1 2008. “This is the reason to expect prices at 10.21 leva, or possibly above 11 leva over the one-year horizon,” the statement said. The recommendation has been valid since September 30.
On December 11, shares in Sopharma rose 5.4 per cent to 8.75 leva, which brokers attributed to the company’s plans to list on the Warsaw Stock Exchange, announced a day earlier SeeNews said.
The Bulgarian stock market posted solid growth for the last twelve months due to abundant liquidity. “Although all reasons behind another 50-100 per cent growth next year are present, we expect the increase to slow down to a more reasonable pace. That’s why the expected 25-30 per cent gains of Sopharma should be consistent with the broad market performance. In addition, there are possible surprises which may give additional upside,” Elana said.
Sopharma is the second largest Bulgarian pharmaceuticals company in terms of sales and holds almost 10 per cent of the Bulgarian drug market. It has the largest capacity for antipyretic production, a modern ampoule production line and the only gamma-ray sterilization laboratory in Bulgaria. The company exports to Russia, Ukraine, Poland and other ex-Soviet markets. Exports account for over half of its sales. The biggest shareholders in Sopharma are Sofia AD with 25.36 per cent, Telso AD with 23.77 per cent and Telecomplect AD with 20.42 per cent. US based Gramercy Emerging Markets Fund has a 17.26 per cent stake in Sopharma.
Meanwhile Billboard AD sold 10.95 million leva worth of shares at the initial public offering (IPO) of its shares on the Bulgarian Stock Exchange (BSE) on December 11. As a result of the book-building, 1 500 000 shares were allotted at a price of 7.30 leva a share. The submitted orders totalled over 174 400 000 as over-subscription at the maximal price of 7.50 leva was 12.9 times and 13.9 times at the cut price of 7.30 leva. Over 1000 people took part in the subscription. The allotted shares have to be paid in by December 13 at the latest. Billboard AD will use the capital gained from the IPO to finance its investment programme and to partly service current debts.
On December 10 a further 31 minority shareholders in Bulgaria’s dominant fixed-line telecommunications operator BTC accepted a buyout offer made by the majority stakeholder, the company said. A total of 29 individuals holding 27 295 shares and two companies holding a total of 5954 shares accepted the offer of Nef Telecom Bulgaria, a unit of AIG Global Investment Group (AIGGIG) which controls 90.07 per cent of the company’s capital. The combined stake in BTC of the shareholders that accepted the offer is 0.01 per cent. In October, Nef Telecom Bulgaria offered to pay 11.3 leva for each of the 28.66 million shares in BTC it did not own at the time. BTC said later that 229 individuals holding a total of some 11.2 million shares, or about 3.9 per cent of its share capital, had accepted to sell their shares to AIGGIG. Earlier this year AIGGIG agreed to buy a 65 per cent stake in BTC for 1.08 billion euro from Novator, a company owned by Icelandic tycoon Thor Bjorgolfsson. The acquisition price per share was set at 11.25 leva, including the 2006 dividend of 0.55 leva per share. AIGGIG later increased its stake in BTC to 90 per cent, launched the buyout offer and said it planned to delist BTC from the BSE. On December 10 BTC shares closed flat at 11.3 leva on a volume of 510 shares.
On that day stocks fell as a series of initial public offerings kept pushing prices down. The blue-chip Sofix index, which includes the 16 most liquid stocks on the BSE fell 1.78 per cent to 1729.02 points and the broad BG40 index went down 2.16 per cent to 520.39 points.
