The analysts of brokerage house Prime Transaction estimate an intrinsic value of RON 46.3 for the shares of Romanian power grid operator Transelectrica (BVB: TEL), which is just below the July 9 mid-trading market price of RON 47.4, according to Bursa.ro.

The company's shares dropped marginally to RON 47.95 at the end of July 9, when the research report was published.

The company's market capitalisation is RON 3.5 billion (EUR 700 million) after the price of its shares rose by 91.8% year over year.

However, the company paid only a modest dividend of RON 0.28 per share out of last year's profit, resulting in a 0.58% dividend yield.

"Transelectrica is an essential player in the energy market in Romania, enjoying a natural monopoly on the electricity transmission segment. Thus, the company is the only one that can make the connection between the electricity producing companies and those whose activity is to supply it to final consumers," the report states.

According to the document, the transport tariffs that form the basis of the company's revenues are established by ANRE based on a "revenue cap" type model, which does not seek to maximize profit but to ensure the necessary conditions for the continuation of energy transport activities.

iulian@romania-insider.com

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