How much is PST Group really worth?

What is the true value of PST Group? This question was commented on for Verslo žinios by Vitalij Šostak, co-founder of PLY Analytics.

“Since the majority of PST Group’s assets consist of investment property – real estate, inventories in the form of property development projects, and receivables – the company’s liquidation value could indeed be very close to its book value.”

According to V. Šostak, the company has recently been operating at a loss, which contrasts against the backdrop of a construction sector demonstrating strong overall results. Therefore, the most appropriate valuation metric for comparison in this case is P/BV. He also notes that it would be more accurate to compare the company not with Merko Ehitus or Scandinavian companies, but with Nordecon, taking into account the Lithuanian company’s “qualitative aspects – profitability indicators, business model, and transparency.” “Assuming a 20% discount compared to Nordecon’s P/BV valuation, the ‘fair’ price for PST Group would be around EUR 1.10 per share,” says V. Šostak.

Another reference point for assessing the ‘fair’ price is the premium applied in recent tender offers, which in the case of Enefit Green reached 27% above the average market price. “The size of the premium was justified based on the ‘average of comparable transactions.’ Based on this principle, the offer price would amount to around EUR 0.70,” said V. Šostak.

Read more in Verslo žinios: Kiek iš tiesų verta „PST Group“?