Ukrainian Real Estate

Publication Date	December 2007
Publisher	Concorde Capital
Product Type	Report
Pages	65
ISBN Number	not applicable
Product Code	CNC00028

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Summary

Solid real estate industry fundamentals in Ukraine have created a favorable environment for domestic developers who are increasingly tapping the international equity market. With the arrival of several new placements, the issue of increased guidance in the sector is coming to the forefront and with this in mind our report is focused on a quantitative comparison of the developers' project portfolios.

Ukrainian real estate investors tend to focus their attention on the size of project portfolios. With new stocks flooding into the sector, this approach is becoming less effective in stock selection. In this report, we introduce a set of metrics that will help investors make a more informed choice. The metrics take into account portfolio quality and consider its risk characteristics related to construction schedule feasibility, cash flow timing, concentration and sensitivity to underlying assumptions. We compare the project portfolios of Ukraine's public developers using the same uniform approach

Content

1. Investment thesis
- Investment summary
- Portfolio risk and feasibility gauged
- Core findings on stocks covered
- What investors want: Value appreciation vs. cash generation
- Stock performance, YTD
- Stock performance, USD
- Real estate indices, YTD
- Sector summary
2. Market overview
- Macro background
- Kyiv real estate market
- Retail market
- Office market
- Warehousing market
- Residential market
- Hotel market
- Regional real estate market
- Key domestic players
- Completed and projected development in Ukrainian real estate market by leading domestic players, ths m2
- Foreign entrants mounting
3. Stock market: Whats on the menu?
- New names emerging
- Placement statistics
- Funds raised through equity placements*, USD mln
- Growth in the pipeline
- Free float of Ukrainian real estate stocks, USD mln
- Free float breakdown, Dec 07
- XXI Century MCap and NAV
- TMM MCap and NAV
- P/NAV for XXI Century
- P/NAV for TMM
- Selection an issue
- Ukrainian real estate stock market
4. Portfolio analysis
- Portfolio feasibility and risk
- Findings
- Project management metrics
- Valuation risk metrics
- Cash flow and sensitivity analysis
- XXI Century
- TMM
- TKS
- Construction schedule comparison
- XXI Century
- TMM
- TKS
5. Valuation
- Valuation summary
- Target price derivation*, USD mln
- Note on XXI Centurys valuation
- DCF mechanics
- Major assumptions
- WACC assumptions
- XXI Century: Impact of financing availability on value
- XXI Century 12M targets sensitivity to funds attracted, USD mln
- Portfolio value evolution, USD bln
6. Reading financial statements
- Accounting differences
- Companies financials, USDmln
- XXI Century financials restatement, USD mln
7. Company profiles
- 7.1 TKS
- Investment case
- Market information
- Stock ownership
- Corporate governance
- Key financials, USD mln
- Portfolio NPV breakdown by segment
- Share price performance*
- Business overview
- TKS portfolio
- TKS Income statement summary, USDmln
- TKS Balance sheet summary, USDmln
- TKS Cash flow statement summary, USDmln
- UAH/USDExchange rates
- Investment case
- Market information
- Stock ownership
- Corporate governance
- Key financials, USD mln
- Portfolio NPV breakdown by segment
- Share price performance*
7.2 TMM
- Business overview
- TMM portfolio
- TMM Income Statement Summary, USD mln
- TMM Balance Sheet Summary, USD mln
- TMM Cash Flow Statement Summary, USDmln
- UAH/USD Exchange Rates
- Investment case
- Market information
- Stock ownership
- Corporate governance
- Key financials, USD mln
- Portfolio NPV breakdown by segment
- Share price performance*
7.3 XXI Century
- Business overview
- XXI Century portfolio
- XXI Century Income Statement Summary*, USDmln
- XXI Century Balance Sheet Summary*, USDmln
- XXI Century Cash Flow Statement Summary*, USDmln
8. Legal environment
- Ownership
- Mortgage financing
- Leasing
- Construction activities
- Taxation
9. Appendices
- Appendix A: TKS project DCF analysis, USD mln
- Appendix B: TMM project DCF analysis, USD mln
- Appendix C: XXI Century project DCF analysis, USD mln
10. Investment ratings