ENAV (1K) | Hold | Becoming more constructive on dividends

研报英文原文证据摘录

ENAV (1K) | Hold | Becoming more constructive on dividends

ENAV Hold | Target Price: EUR5.30

Company description Management

ENAV is the monopoly in charge of providing air traffic control services throughout the Sandro Pappalardo, Chairman

entire Italian airspace. Among the company's regulated activities (c. 95% of its Igor De Biaso, CEO Luca Colman, CFO

revenues) we distinguish en route services, through which it handles air traffic

crossing the country's airspace from four Area Control Centres, and terminal services, Key shareholders

to provide assistance during the approach, take-off and landing phases from 45 Free float 46.65% Republic of Italy (Ministry of Economy and 53.30%

control towers located in different Italian airports. Finance

Investment case Valuation methodology

n ENAV is the monopoly in charge of controlling the airspace of n We value ENAV through a dividend discount model.

the fifth most visited country in the world, Italy. The company n The assets are fully owned by the company and there is no

also benefits from travel routes that fly to/from neighbouring expiry date on the contract, therefore we add a residual value

countries and other continents through its airspace (over 40% to our assumptions.

of en route traffic represented by overflight). n We use a cost of equity of 9.3%, implying a beta of 0.7.

n Over 95% of the revenues are regulated and its regulatory

frameworks provide material stability and visibility during Risks to our rating

each five-year period. n Relevant changes in the bond yield environment (+/-).

n ENAV offers high visibility on the dividend side, which imply n Potential inorganic growth in non-regulated activities.

mid-single-digit yields during the rest of the decade. n Dividend payments beyond RP4.

Catalysts