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Equity Research Swedbank Markets Page 1 of 5

Attention: Please note important background and customer information at the end of this report

EstoniaAS Ekspress Grupp made an announcement of increasing share capitalwith 8 896 800 new shares with the nominal value of EEK 10 per share. Asa result the new size of the share capital is EEK 297,456,410 or approx. 19m. Upon the increase of share capital, the right to subscribe about6,250,000 new shares to be given to existing shareholders of AS EkspressGrupp and to any other interested party. The subscription rights with respectof existing shareholders, the shareholders shall have pre-emptive right tosubscribe new shares in case they are fixed in the list of shareholders as at27.01.2010 at 23.59. About 2,646,800 new shares shall be offered directlyto ING Luxembourg S.A. and HHL Rhm O.

On Jan 5th Baltika reported its Q4 and 2009 sales. Total sales for Q4

amounted to 4.4m, 26% decrease yoy. Main driver was the Baltic marketwith CEE posting highest % declines as company left Czech Republicmarket in October. Sales in Russia and Ukraine were down 15% yoy. Salesfor the full year were 56.4m (-26% yoy). Number of stores for the end ofthe year was 133 over 26900 m. The company opened 23 stores andclosed 24. Overall this has been a very difficult year for the company but2010 is going to be a very tough test as well as company now needs toreturn to profitability and we see this as rather difficult task as consumerdemand in Baltics remains very weak. However it is likely that we havereached a bottom in terms of retail sales and further declines are not likelyto be big (Q1 10 will still be difficult). We keep a Hold recommendation onthe share as we see little upside at this point.

Baltic Indices

275

295

315

335

355

8-Oc t 22-Oc t 5-Nov 19-N ov 3-D ec 17-D ec 31-D ec

Baltic Benchmark OMX Tallinn*OMX Riga* OMX Vilnius*

Source: Reuters, Swedbank* Relative to Baltic Benchmark

Tra il. 4Q 0 9F La st Q 0 9F

Arco Vara 0.19 11.8% 575096 -0.2 9.0 0.6 0.4

Baltika 0.68 -6.8% 65516 -1.6 -1.8 1.0 1.1

Eesti Telekom 5.90 -0.7% 2647 10.1 16.6 4.0 4.8

Ekspress Grupp 1.01 -1.9% 26155 -4.4 -4.3 0.6 0.6

Harju Elekter 2.24 8.2% 37198 35.4 28.5 1.3 1.5

Jrvevana 0.37 5.7% 9600

Merko Ehitus 5.44 8.4% 17185 21.0 -77.9 0.7 0.8

N ordecon I nt erna ti onal 1 .70 7.6% 45033 91.4 -32.1 1.0 1.2

Norma 4.10 5.1% 7845 39.9 -40.3 0.9 0.9

Olympic Entertainment Grou 0.76 -1.3% 1429071 -2.3 -3.8 1.4 1.5

S il vano F ashi on Group 0 .86 10.3% 67357 -29.4 -22.7 1.1 0.9

Tallink 0.38 2.7% 1587536 -31.3 7.5 0.4 0.4

Tallinn a Kau ba maja 3.8 6 6.9% 81899 -26.9 -16.3 1.4 1.5

Tallinna Vesi 10.40 4.0% 4091 10.6 10.1 2.6 2.4

Viisnurk 0.81 12.5% 12760 241.6 5.1 0.8 0.7


Grindeks 3.90 2.6% 716 3.5 5.6 0.5 0.7

Latvian Gas 5.00 22.0% 839 9.8 0.7

Latvian Shipping Company 0.47 17.5% 43007 1.8 1.3 0.2 0.2

Latvijas Balzams 1.83 -3.7% 37 6.2 0.4

Liepajas Me talurgs 1.4 0 25.0% 3775 1.3 0.3

Olainfarm 1.04 10.6% 8421 105.7 9.7 0.9 0.9

SAF Tehnika 0.54 12.5% 24797 -1.8 0.8 0.2 0.1

V almiera Fib re G lass 0.4 8 11.6% 1147 0.9 0.4

Ventspils Nafta 0.98 4.3% 1981 2.8 0.3


Apranga 2.94 6.9% 118098 22.7 -4.4 1.2 1.1

City Service 6.26 -3.1% 92662 10.9 7.4 1.9 1.5

Grigiskes 0.95 2.2% 104486 -12.5 0.9

Invalda 2.12 15.2% 142816 -0.8 0.6

Klaipedos Nafta 0.96 2.1% 200893 12.2 0.8

Lietuvos Dujos 2.05 -2.4% 30833 24.1 15.3 0.5 0.5

Lietuvos Energija 2.35 -0.4% 16709 -44.9 0.6

Lietuvos Juru Laivininkyste 0.45 4.7% 12035 -2.2 0.4

Lifosa 31.70 14.1% 24993 4.2 0.8

Panevezio Statybos Trestas 3.92 3.4% 61570 2.2 0.6

Pieno Zvaigzdes 2.97 1.0% 3207 19.1 5.4 1.1 1.0

Rokishkio Suris 3.10 3.3% 3498 -13.7 0.8

RST 1.93 5.5% 270964 -10.9 0.4

Sanitas 9.80 2.8% 5798 -12.0 1.2

Siauliu Bankas 1.09 -2.7% 137117 4.4 0.7

Snaige 0.59 3.5% 275920 -0.5 0.3

Snoras 0.95 -5.0% 818514 1.3 0.4

TEO LT 1.91 4.4% 566558 9.0 8.9 1.5 1.4

Ukio Bankas 1.03 -2.8% 1185634 1.2 0.4

Source: Reuters, Swedbank

P/E P/BV

Estonia (in )

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Latvia (in LVL)

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Lithuania (in LTL)Last

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P/E P/BV

P/E P/BV

Equity Weekly

Index value Weekly Change,% Weekly Turnover

Estonia 422 4.32% 2,6m

First week of the year was calm. As usual the most traded shares were Tallink,Olympic and Tallinna Kaubamaja. In Tallink we still see selling pressure frominstitutions, Olympic has performed quite nicely and demand is decent. Fewblocks were crossed in Tallinna Kaubamaja.

Latvia 315.7 13.17% 97,5k

The New Year started with impressive double digit gains for most of shares whichled OMX Riga index by 13.17 % higher. There wasnt any significant news andmostly retail market participants were seen in the market as traded volumesremained very small.

Lithuania 266.2 1.67% 2m

Most actively traded shares on Vilnius Stock Exchange were TEO, gaining 5% to1.91 LTL level, and banks. Institutional demand was recorded in City Service,Klaipedos Nafta and Lifosa.

Equity Research - Monday, January 11, 2009


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Equity Weekly 11 January 2009


Latvia

No Corporate News.

Lithuania

Apranga continues to struggle for the retail turnover (sales including VAT). In Decemberthe retail turnover comprised LTL 35.2m (EUR 10.2m), down 21.4% yoy. The retail turnoverfor the whole year was LTL 392.6m (EUR 113.7m) or 22.9% less than in 2008.

In December 2009 Rokiskio suris delivered LTL 43.6m (EUR 12.6m) in sales or 17.5%less than for the same period a year ago. Throughout 2009 the companys sales were LTL561.2m (EUR 162.5m), down 17.7% yoy. The 2009 sales lagged from the estimated by 3.8%, mainly due to the temporary export ban to Russia, and the decreased sales on theinternal market due to the drop in demand.

Invalda plans to issue a non-public LTL 25m convertible bonds issue. Total convertiblebonds issue size is 250 000 units, the nominal value of one convertible bond is LTL 100with an annual interest of 9.9% (considering there are 365 days per year). The bond ofnominal value LTL 100 can be converted to ordinary registered shares at ratio 5.5 (onebond would be converted into 18.18 shares approximately, final result is to be rounded by

arithmetical rules). The investor, who acquired the whole bonds issue and chooses toconvert to shares all owned bonds, can exercise this right at any time until April 2, 2012, bydelivering written application to Invalda AB.The company plans another non-public LTL 7.44m convertible bonds issue under the sameterms but cancelling the pre-emptive right of existing shareholders to acquire the bonds.The right to acquire all convertible bonds of this issue is granted to DIM Investment UAB,code 301145749, registered address Konstitucijos ave. 23, Vilnius, Lithuania. The reasonfor withdrawal of the pre-emptive right is to secure funds to rearrange the liabilities ofInvalda AB.

Vilkysiu pienine managed to increase December sales by 14.2% yoy to LTL 14.03m (EUR4.06m). Throughout the year the companys sales amounted to LTL 159.5m (EUR 46.2m),up by 4.9% yoy.

Pursuing the resolution of the 31st August 2009 general meeting of shareholders of

Rokiskio suris - to acquire up to 3.844.480 units of ordinary registered shares (10% of theauthorized capital). The price for purchase of own shares is set at LTL 2.50 per ordinaryshare. The duration of the offer is set at 14 days. The shares will be purchased as from13th January 2010 until 26th January 2010, via the official tender submarket of SecuritiesExchange NASDAQ OMX Vilnius. In case the quantity of shares offered for purchase isgreater than it is intended to buy, the amount of offered for purchase shares will beproportionally decreased.


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Investor Calendar:

Date Description

Estonia

No Corporate News

Latvia

No Corporate News

Lithuania

No Corporate News

Source: NASDAQ OMX


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Swedbank Markets Baltic Equity research & Institutional sales:Energy, Materials & Utilities Industrials Equity Sales

Pavel [email protected]

Estonia+372 6 131 535

Risto [email protected]

Estonia+372 6 136 796

Kristiina [email protected]

Baltic Institutional Sales+372 6 131 663

Donatas [email protected]

Lithuania+370 5 268 4395

Marko [email protected]

Estonia+372 6 131 246

Andres [email protected]

Head of Sales (Estonia)+372 6 131 657

Telecom Services FinancialsSvetlana [email protected]

Head of Sales (Latvia)+371 6744 4154


Estonia+372 6 131 246

Risto [email protected]

Estonia+372 6 136 796

Simona [email protected]

Head of Sales (Lithuania)+370 5268 4513


Estonia+372 6 131 246 Equity Trading

Consumers HealthcareSimmo [email protected]

Head of Baltic Trading+372 6131 605

Pavel [email protected]

Estonia+372 6 131 535


Latvia+372 6 131 246 Equity Capital Markets

Donatas [email protected]

Lithuania+370 5 268 4395

Mihkel [email protected]

Baltic Equity Capital Markets+372 6 131 564

Swedbank Group Homepage: www.swedbank.com. For Research products on Bloomberg please type: HBME .

Background Information:

Recommendation structureSwedbank Markets recommendation structure consists of six recommendations: Buy, Accumulate, Hold, Reduce, Sell and Avoid. Therecommendations are based on an absolute return for the security 12 months forward. The absolute return includes share price appreciation

and dividend yield combined.

The recommendations for the securities mentioned in this report are based on risk and return considerations. The higher the risk category ofthe investment, the higher the required return. For equity investments, returns are defined as capital appreciation and dividends received overthe investment horizon of 12 months forward. The expected capital appreciation is the ratio of a stocks target price over the current price. Acompany risk rating depends on its stock price volatility, liquidity and business outlook. The target price depends on a companysfundamentals as well as the market valuation of peer stocks, and can be changed at any time if the relevant changes occur within acompany/market perception of the peer group. Buy, accumulate, hold, reduce, sell and avoid recommendations may be used in thisreport. The table below presents the relationship between recommendations and target prices compared to risk level of the stock. These areindicative ranges and actual recommendations may deviate from the indications if other relevant issues are considered. For more detailedinformation about the recommendation system please visit http://www.swedbank.ee/disclaimers/recommendation2007.pdf

Recommendation structure

Buy > +20% to target price

Accumulate +10% < target price < +20%

Hold 0% < target price < +10%Reduce -10% < target price < 0%

Sell < -10% to target price

Avoid used when securi ty does not match the standards presented in SWBs investment guidel ines

The recommendation by Swedbank Markets Equity Research department is based on a variety of standard valuation models. However, thebase for the calculation of the target price is our DCF model (DCF = discounted cash flow) with the exception of financial and investmentcompanies. The DCF model discounts future cash flow at present value.

In preparation of this report different valuation methods have been used, including, but not limited to, discounted free cash-flow andcomparative analysis. The selection of methods depends on the industry, the company, the nature of the stock and other circumstances.

The target price (previous fair value) takes into account the DCF value, the relative valuation of the share versus others peers (national orinternational) and news that can have a positive or negative effect on the share price. Relative and absolute multiples that we consider are:

EV/EBITDA, EV/EBIT, PE, PEG and Net Asset models for companies with liquid markets for their assets and other industry specific ratioswhen available. Break-up valuation models are also sometimes considered.

Recommendations by the 11 jaan 2010

No of shares Part of total

Buy 9 41%

Accumulate 2 9%

Hold 3 14%

Reduce 1 5%

Sell 1 5%

Under Review 6 27%


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Information to the customer:

General

Equity weekly is a compilation of news, corporate events,companies results and other similar information published in stockexchange notifications last week, an overview of Baltic stockexchanges of the same period and a weekly timeline of upcomingcorporate events of listed companies. No research is made here,

any resemblances to research are purely coincidental and shouldbe considered unintentional. Weekly may contain references toeffective price targets and investment recommendations ofcompanies mentioned in previously published research reportsand may update such price targets and recommendations on thebasis of important new information. Previous research reports areavailable athttps://www.swedbank.ee/private/investor/portfolio/analysis/equityInformation on how the price targets and investmentrecommendations are constructed in research reports is availableat http://www.swedbank.ee/disclaimers/recommendation2007.pdf.

Issuer and recipients

This report by Swedbank Markets Equity Research is issued bySwedbank Markets business area within Swedbank AB (publ)(Swedbank). Swedbank Markets is a registered secondary name

to Swedbank and is under the supervision of the SwedishFinancial Inspection Authority (Finansinspektionen) and otherfinancial supervisory bodies where Swedbank or SwedbankMarkets have offices. Swedbank is a public limited liabilitycompany and a member of the stock exchanges in Stockholm,Helsinki, Oslo and Reykjavik as well as being a member ofEUREX. Swedbank AS disseminates this report in Estonia.Swedbank AS is under the supervision of the Estonian FinancialSupervisory Authority (Finantsinspektsioon). Swedbank ABdisseminates the report in Lithuania. Swedbank AB is under thesupervision of the Lithuanian Financial Supervisory Authority(Lietuvos Respublikos vertybini popieri komisija) in Lithuania.Swedbank AS disseminates this report in Latvia. Swedbank AS isunder the supervision of the Latvian Financial SupervisoryAuthority (Finanu un kapitla tirgus komisija). In no instances isthe report altered before dissemination.

This research report is produced for the private information ofrecipients and Swedbank is not advisory nor soliciting any actionbased upon it. If you are not a client of ours, you are not entitled tothis research report. The Equity Research report is not, and shouldnot be construed as, an offer to sell or solicitation of an offer to buyany securities.Analysts certification

The analyst(s) responsible for the content of this weekly herebyconfirm that notwithstanding the existence of any potential conflictsof interest referred to herein, the views expressed in this weeklyaccurately reflect our personal views about the companies andsecurities covered. The analyst(s) further confirm not to havebeen, nor are or will be, receiving direct or indirect compensationin exchange for expressing any of the views or the specificrecommendation contained in the weekly.

Limitation of liabilityAll information, including statements of fact, contained in thisequity weekly have been obtained and compiled in good faith fromsources believed to be reliable. However, no representation orwarranty, express or implied, is made by Swedbank with respect tothe completeness or accuracy of its contents, and it is not to berelied upon as authoritative and should not be taken in substitutionfor the exercise of reasoned, independent judgment by you.Swedbank would like to point out that recipients of the weeklyshould note that investments in capital markets e.g. such as in thisdocument carry economic risks and statements regarding future

assessments are compounded with uncertainty. The recipientsand clients of Swedbank are responsible for such risks and theyare recommended to supplement their decision-makinginformation with that material which is assessed to be necessary,including but not limited to knowledge on the financial instrumentsin question and on the prevailing requirements as regards tradingin financial instruments. Opinions contained in the weeklyrepresent the analyst's present opinion only and may be subject tochange.To the extent permitted by applicable law, no liability whatsoever isaccepted by Swedbank for any direct, indirect or consequentialloss arising from the use of this weekly.

Conflicts of interestAll equity weeklies are produced by Swedbank Markets Researchdepartment, which is separated from the rest of its activities by aChinese wall; as such, equity weeklies are independent and basedsolely on publicly available information. The analysts at SwedbankMarkets may not own securities covered by the weekly, thatrepresent more than 5% of the total share capital or voting rights ofany company mentioned in this weekly.Internal guidelines are implemented in order to ensure the integrityand independence of research analysts. The guidelines includerules regarding, but not limited to, the identification, managementand avoidance of conflicts of interest.The remuneration of staff within the Research department mayinclude discretionary awards based on Swedbanks total earnings,including investment banking income; staff, however, shall notreceive remuneration based upon specific investment bankingtransactions.Swedbank shall not receive compensation from any companymentioned in the weekly for making an investmentrecommendation or enter into an agreement with the saidcompany to make an investment recommendation.

Company specific disclosures and potential conflicts ofinterestIn view of Swedbanks position in its markets, recipients of thisweekly should assume that it may currently (or may in the comingthree months and beyond) be providing or seeking to provideconfidential investment banking services to the companies referredto in this weekly and that an agreement regarding such services

may have been in effect over the previous 12 months, under whichSwedbank may have received payments.Recipients of this weekly should also note that it may happen thatSwedbank, its directors, its employees or its subsidiary companiesat various times have had, or have sought, positions, advisoryassignments in connection with corporate finance transactions,investment or merchant banking assignments and/or lending asregards companies and/or financial instruments covered by thisweekly. It may also occur that Swedbank may act as a liquidityprovider in trading with financial instruments covered by thisweekly.Swedbank has not been lead manager or co-lead manager overthe previous 12 months of any publicly disclosed offer of financialinstruments of any company mentioned in this weekly.

Reproduction and dissemination

This material may not be reproduced without permission fromSwedbank Markets. The weekly may not be disseminated tophysical or legal person who are citizens of, or have domicile in acountry in which dissemination is not permitted according toapplicable legislation or other decisions.Information contained in this weekly is confidential and is intendedto be used solely by the clients of Swedbank to whom this weeklywas addressed. By accepting this weekly you have accepted thedeclared restrictions.

Swedbank Group, 2009, All rights reserved.

The Swedbank does not have shareholdings exceeding 5 % in companies referred to in this report, but it may hold securities mentioned in thisreport on behalf of its clients, acting in custodial capacity. Companies mentioned in this report do not have shareholdings exceeding 5% inSwedbank. For information regarding the Bank and its internal organizational and administrative arrangements for the prevention and avoidanceof conflicts of interest, refer to the following websites:

Swedbank AS in Estonia: http://www.swedbank.eeSwedbank AS in Latvia: http://www.swedbank.lvSwedbank AB in Lithuania: http://www.swedbank.lt

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