swb46equityweekly16.11

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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

Estonia

Nordecon International posted Q3 results last week which were above ourexpectations. Total sales of the company amounted to 47m in Q3 2009,down by 29.4% Y-o-Y. The cumulative revenue for the 9M 2009 reached

126m, down by 32.7% Y-o-Y. The net profit dropped by almost 43% Y-o-Yto 2.6m in Q3 2009.

Latvia

No Corporate News.

Lithuania

Vilkyskiu pienine October sales amounted to LTL 16.2m (EUR 4.7m) or8.5% more than for the same period last year. The sales of the company forperiod January October 2009 comprised LTL 131m (EUR 37.9m) down1% yoy.

From November 13, 2009, a mandatory tender offer to buy Dvarcioniukeramika (ISIN code LT0000122319) is launched. The closing date forexecution of the tender offer is November 26, 2009. The price per share isLTL 2.01.

Zemaitijos Pienas for the nine months delivered sales of LTL 277.1m (EUR80.3m), in comparison with the nine moths of 2008 the sales decreased by23.3%. The unaudited consolidated net profit for the nine months of 2009 isequal to LTL 5.9m (EUR 1.7m), whereas in the nine months of 2008 the

company experienced a loss of LTL 8.3m (EUR 2.4m).

Baltic Indices

240

270

300

330

360

390

13-Aug 27-Aug 10-S ep 24-S ep 8-Oc t 22-Oc t 5-Nov

Baltic Benchmark OMX Tallinn*

OMX Riga* OMX Vilnius*Source: Reuters, Swedbank* Relativ e to Baltic Benchmark

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

Arco Vara 0.20 5.3% 458382 -0.3 9.5 0.4 0.4

Baltika 0.74 2.8% 85409 -1.7 -2.0 1.1 1.2

Eesti Telekom 5.94 0.0% 45499 10.1 16.7 4.0 4.9

Ekspress Grupp 1.03 -1.9% 53414 -4.5 -4.3 0.6 0.6

Harju Elekter 2.38 0.0% 7258 37.6 30.3 1.4 1.6

Jrvevana 0.45 18.4% 35308

Merko Ehitus 5.19 0.4% 26476 18.1 -74.3 0.7 0.7

N ord ec on Interna ti on al 1 .5 6 1.3% 222520 83.8 -29.4 0.9 1.1

Norma 3.95 2.1% 6414 38.4 -38.8 0.9 0.9

Olympic Entertainment Grou 0.71 6.0% 412277 -1.9 -4.9 1.2 1.2

Silvano Fashion Group 0.68 0.0% 16669 -2.4 -17.9 0.9 0.7

Tallink 0.37 -5.1% 2904513 -30.5 7.3 0.4 0.4

Tallinn a Kau ba maja 3.7 5 0.3% 39529 -44.8 -13.2 1.3 1.5

Tallinna Vesi 10.20 -1.9% 74046 10.4 9.9 2.5 2.3

Viisnurk 0.85 4.9% 4550 253.5 5.3 0.8 0.8


Grindeks 3.25 -25.3% 11557 2.9 4.7 0.4 0.6

Latvian Gas 4.45 -12.4% 2308 8.7 0.6

Latvian Shipping Company 0.43 -2.3% 90787 1.6 1.2 0.2 0.2

Latvijas Balzams 1.79 -0.6% 432 6.0 0.4

Liepajas Metalurgs 1.21 0.8% 474 1.1 0.3

Olainfarm 0.97 3.2% 19019 98.6 9.0 0.9 0.8

SAF Tehnika 0.73 25.9% 38083 -2.5 1.1 0.3 0.2

Valmiera Fibre Glass 0.47 0.0% 6984 0.9 0.4

Ventspils Nafta 1.35 0.0% 36646 3.9 0.4


Apranga 2.36 6.8% 200012 18.2 -3.5 1.0 0.9

City Service 7.37 4.1% 10167 12.8 8.8 2.2 1.8

Grigiskes 1.02 7.4% 61060 -13.4 0.9

Invalda 2.00 1.0% 182460 -0.7 0.6

Klaipedos Nafta 0.96 1.1% 26813 12.2 0.8

Lietuvos Dujos 2.32 -2.5% 13235 27.3 17.4 0.6 0.5

Lietuvos Energija 2.80 -1.8% 6556 -53.5 0.7

Lietuvos Juru Laivininkyste 0.47 -6.0% 61417 -2.3 0.4

Lifosa 26.75 2.5% 7522 3.5 0.7

Panevezio Statybos Trestas 3.41 -5.3% 296359 1.9 0.5

Pieno Zvaigzdes 3.00 1.7% 2889 19.3 5.4 1.1 1.0

Rokishkio Suris 3.00 1.7% 21167 -13.3 0.7

RST 1.91 -7.3% 134732 -10.8 0.4

Sanitas 9.49 -1.1% 20839 -11.6 1.2

Siauliu Bankas 1.04 -3.7% 189424 4.2 0.6

Snaige 0.70 2.9% 132866 -0.6 0.4

Snoras 1.07 -1.8% 204193 1.5 0.5

TEO LT 1.82 -2.2% 2647088 8.6 8.5 1.4 1.4

Ukio Bankas 1.15 -0.9% 553191 1.3 0.5

Source: Reuters, Swedbank

P/E P/BV

P/E P/BV

Lithuania (in LTL)Last

CloseWeeklyChange

WeeklyVolume

P/E P/BV

Estonia (in )

Last

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Weekly

Change

Weekly

Volume

Latvia (in LVL)

Last

Close

Weekly

Change

Weekly

Volume

Equity Weekly

Index value Weekly Change,% Weekly Turnover

Estonia 408.6 -0.64% 3,3m

The activity in Tallinn Stock Exchange was quiet. The turnover reached 3.3mand the index ended the week at 408.6 points. Small institutional activity wasseen in Tallinna Vesi AS. Also, a slight selling pressure by institutions wasrecorded in Nordecon International.

Latvia 288 -5.05% 0,3m

Market activity was a bit higher than usual however there was not seen clearmarket direction in Riga. Grindeks was in the market participants spot light dueto disappointing third quarter results which led share price 25% lower. MeanwhileSAF Tehnika increased by more than 25% after news that shareholders meetingapproved dividend payout of LVL 0.23 per share which is 39.7% dividend yield atpre-announcement price and 31.5% yield at Fridays close price.

Lithuania 271.1 -2.03% 2,7m

The Lithuanian market remained quiet as well. The weekly turnover reached 2.7m and the index closed at 271.1 points last week. A selling interest byinstitutions was recorded in Apranga and Invalda.

Equity Research - Monday, November 16, 2009


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Equity Weekly November 16, 2009

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

Investor Calendar:

Date Description

Estonia

No Corporate News

Latvia

16.11.2009 OLK1R - 9M 2009 non-audited financial report16.-20.11.2009 ELG - 9M non-audited financial report

19.11.2009 VNF1R - Extraordinary General Meeting

20.11.2009 NKA1R - 9M non-audited financial report

20.11.2009 VNF1R - Extraordinary General Meeting

23.11.2009 LME1R - 9M non-audited financial report

Lithuania

16.11.2009 LFO1L - Sales revenue in October 2009

16.11.2009 VBL1L - Consolidated financial statements for 9M 2009

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

Lauri [email protected]

Head of Baltic Equity Capital Markets+372 6 131 355

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. The

recommendations are based on an absolute return for the security 12 months forward. The absolute return includes share price appreciationand 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 16 nov 2009

No of shares Part of total

Buy 10 45%

Accumulate 2 9%

Hold 2 9%

Reduce 2 9%

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

swb46equityweekly16.11

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