Tuesday Espresso Weekly Commodity Roundup Analysts: Kamil Kliszcz +48 22 438 24 02, Jakub Szkopek +48 22 438 24 03

Tuesday, May 26, 2020 | weekly publication Tuesday Espresso Weekly Commodity Roundup Analysts: Kamil Kliszcz +48 22 438 24 02, Jakub Szkopek +48 22 438 24 03

Utilities 1-Week & YTD Performance German power contracts inched up to EUR 38/MWh over the week, led mainly by a Company 1W YTD continued rise in EUA, now back above EUR 21/t. Quotes for coal and natural gas are OMV -4 .6 % -4 0 % trending downward, but this has not helped to lift the model clean-dark spread as of yet. Utilities in Poland so far are not seen to be passing the rising emission costs onto end users, MOL -3 .8 % -3 2 % and as a consequence their average CDS has narrowed by another 3-4 zlotys. The load P KN O rlen -2 .2 % -2 7 % factors of most major power stations remain below the levels recorded this time last year. At T upras -2 .1 % -3 7 % PGE's Bełchatów power station, where the amount of compensation paid for state-mandated E nea -1 .1 % -3 1 % production caps is not enough to fully offset lost margins, the capacity factor for May is as much as 8 percentage points lower than in May 2019, and the year-over-year decline for the KGHM -0 .8 % -1 6 % quarter to date is 6pp. The situation at the Turów facility is not as bad, with the energy Borys zew -0 .5 % -1 4 % availability factor seen to have increased. Utility indices in the US and Europe have not PGE -0 .2 % -4 7 % moved much over the past week. In Poland, the power sector is still in anticipation mode Lotos -0 .1 % -3 0 % ahead of the eagerly-awaited announcement of an updated national energy strategy. IMC 0 .4 % -5 % Gas & Oil E nerga 0 .9 % 11% Oil prices are on a firm upward trend, rising amid an upbeat market mood reflected in a ZE P A K 1 .1 % -3 % seven-week-straight increase in speculator bets. On the downside, refinery profits remain O rzeł Biały 1 .1 % -1 5 % under pressure, underpinned by persistently high inventories (in case of diesel the stockpile ZA P uławy 1 .3 % -1 0 % is still rising). The losses generated on a negative model refining margins (-$1/bbl) are exacerbated by a negative Urals/Brent spread (-$0.8/bbl). Under these circumstances, JSW 1 .6 % -3 6 % refiners are not likely to want to ramp production back up to pre-crisis levels as quickly as CEZ 1 .9 % -5 % originally thought, which means weak second-quarter earnings will probably be followed by a LW Bogdanka 2 .1 % -4 4 % difficult third quarter. In Petchem, margins on polymers are still shrinking while margins on A lumetal 2 .2 % -6 % olefins have rebounded from very low levels. In gas, spot prices are testing fresh lows (EUR 4/MWh) on a seasonal decline in demand amid a persistent oversupply, but contracts ZC h P olic e 2 .8 % 7% for 2021 deliveries are still holding firmly above our baseline price scenario for the year. Krus zwic a 2 .9 % 18% T auron 4 .0 % -2 8 % Metals P GN iG 4 .2 % -1 1 % Metal prices have been weighed down by rising tensions between the US and China. China is the leading global demand driver, with its copper inventory reduced by 15% over the past Kęty 4 .7 % 0% week. In the zinc market, global stocks are down 37% compared to a high recorded in March Kernel 5 .3 % -5 % (a positive signal for STP). T arc zyńs ki 6 .4 % -7 % P C C Rokita 8 .2 % 0% Coking Coal Met coal prices are headed south again after a short-lived rebound (a negative signal for C iec h 8 .3 % 3% JSW). A report by Argus Media last week revealed that China might be mulling further curbs A s tarta 1 1 .1 % 0% on Australian coking coal imports to mitigate oversupply risk. The past week did not bring Grupa A zoty 1 3 .0 % 5% major developments in the steel market, where continuing draws have still not brought WIG Indices 1W YTD China's record-high inventory down to levels that could trigger a global price shift; producers WIG 1 .2 % -2 0 % of sheet steel have been able to raise prices, but billet, rebar, and others, have not moved. Consequently, BOF steel producers like ArcelorMittal, VoestAlpine, and Salzgitter may see C hemic als 1 0 .1 % 4% their profits squeezed. E nergy 0 .7 % -3 0 % O il & Gas -0 .5 % -2 4 % Agricultural Commodities Food Industry 3 .7 % -3 % Fertilizer margins should be expanding as costs of natural gas fall lower and lower from week to week, however due to seasonal sale offers on prices of ammonium nitrate and its Basic Material -0 .7 % -1 8 % mixtures with calcium (CAN), and urea (UAN) sales margins in Europe have been squeezed U kraine 3 .4 % -3 % in recent weeks (a negative signal for Grupy Azoty, Yara). The downward-trending energy Sector Indices 1W YTD prices (gas, coking coal) can potentially boost the profits of Ciech. M ining 7 .5 % -1 2 %

Chart of the Week: Copper price (PLN/t) and speculative positioning (ths contracts) O il & Gas E&P 0 .6 % -3 9 % Refining EU 1 .5 % -3 0 % 27,000 80 Will speculators raise bearish bets Refining US 1 2 .2 % -3 3 % 26,000 60 around US-China feud? 25,000 40 Net speculative positions in copper are down A gri & Food -1 .1 % -2 % 24,000 20 to -13,000 after a period of position closing by Rubber 2 .5 % -3 0 % 23,000 0 short speculators, from -46,000 recorded in Fertilizers 5 .3 % -1 1 % 22,000 -20 mid-February. However as tensions between Chemicals EU 2 .4 % -1 2 % 21,000 -40 the US and China start back up speculative 20,000 -60 shorts can be expected to increase again, with Industrials EU 2 .7 % -1 9 %

implications for copper prices which in one of Petchem World 6 .8 % -2 4 %

Jun-18 Jun-19

Jun-17 the scenarios could fall to the 2019 third-

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-19 Sep-18 Sep-17 Utilities EU 1 .4 % -8 % Cu+Premium (lhs) Net Specs Pos. (rhs) quarter low of PLN 20,000 per tonne. Utilities US +3 .2 % -1 2 % Source: Bloomberg, mBank

Utilities

EU Prices of Electricity (EUR/MWh) & EUAs (EUR/t) ARA Coal Spot and Forward Prices (EUR/t)

65 35 90

60 30 75 55 25

50 20 60 45 15

40 10 45

35 5

30 0 30

Jul-19

Jan-19 Jan-20

Oct-19

Jun-19

Apr-20 Apr-19

Jul-19

Feb-19 Feb-20

Mar-19 Mar-20

Dec-18 Dec-19

Sep-19

Aug-19

Nov-18 Nov-19

May-20 May-19

Jan-20 Jan-19

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Mar-19 Mar-20

Dec-18 Dec-19

Sep-19

Aug-19

Nov-18 Nov-19

May-19 May-20 EUA (EUR/t, rhs) Electricity (EUR/MWh, lhs) ARA Coal Spot ARA Coal Forward

Clean-Dark Spread, Germany (EUR/MWh) Polish Electricity Prices (1Y) (PLN/MWh) 4 325 240

3 300 220

2 275 200

1 250 180

0 225 160

-1 200 140 -2 175 120

-3

Jul-19

Jan-19 Jan-20

Oct-19

Jun-19

Apr-19 Apr-20

Feb-20 Feb-19

Mar-19 Mar-20

Dec-18 Dec-19

Sep-19

Aug-19

Nov-18 Nov-19

May-19 May-20

Jul-19

Jan-19 Jan-20

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Mar-19 Mar-20

Dec-18 Dec-19

Sep-19

Aug-19

Nov-18 Nov-19 May-20 May-19 Price ex. EUA (0.9t/MWh) POLPX 1Y Contract CDS 2021 (CO2 intensity 0.9t/MWh, efficiency 37.6%)

Poland-Germany Power Price Spread (PLN/MWh) Polish Green Certificate Prices (PLN/MWh)

80 180

70 160

60 140

50 120

40 100

30 80

20 60

10 40

Jul-19

Jan-19 Jan-20

Jul-19

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Mar-19 Mar-20

Dec-18 Dec-19

Sep-19

Aug-19

Nov-18 Nov-19

Jan-19 Jan-20

Oct-19 May-19 May-20

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Mar-19 Mar-20

Dec-18 Dec-19

Sep-19

Aug-19

Nov-18 Nov-19

May-19 May-20 Poland-Germany Power Price Spread Green Certificate Prices

Weekly Returns of Utility Stocks

9.2%

5.8% 4.0% 4.3% 4.6% 1.9% 2.0% 1.1% 0.3% 0.6% 0.9%

-0.5% -0.2% -1.5% -1.1% -1.1%

-6.0% -5.7% -7.9%

Source: Bloomberg, mBank

Utilities

MSCI Utilities Europe vs. S&P Utilities S&P Utilities vs. S&P 500 P/E 145 22 25% 21 20%

130 20 15% 19 10% 18 5% 115 17 0% 16 -5% 100 15 -10% 14 -15%

85 13 -20%

Jun-17 Jun-19 Jun-17 Jun-18 Jun-19 Jun-18

Mar-18 Mar-19 Mar-18 Mar-19 Mar-20 Mar-20

Dec-17 Dec-19 Dec-17 Dec-18 Dec-19 Dec-18

Sep-17 Sep-18 Sep-19 Sep-17 Sep-18 Sep-19 EU Utilities US Utilities premium/discount S&P P/E S&P Utilities P/E

MSCI Utilities EU vs. DPS & EBITDA Expectations MSCI Utilities EU vs. WIG-ENERGY 145 150 140 135 125 130 125 100 120 115 75 110 105 100 50 95

90 25

Jun-17 Jun-19 Jun-17 Jun-19 Jun-18 Jun-18

Mar-18 Mar-19 Mar-18 Mar-19 Mar-20 Mar-20

Dec-17 Dec-19 Dec-17 Dec-19 Dec-18 Dec-18

Sep-17 Sep-18 Sep-19 Sep-17 Sep-18 Sep-19 Utilities EU Utilities DPS EBITDA 12M Fwd MSCI EU Utilities WIG Energy

WIG-ENERGY vs. EBITDA Expectations WIG-ENERGY vs. WIG P/E 125 4000 14 -10%

120 3500 12 -20% 10 115 3000 -30% 8 110 2500 -40% 6 105 2000 -50% 4

100 1500 2 -60%

95 1000 0 -70%

Jun-18 Jun-19 Jun-17 Jun-18 Jun-19 Jun-17

Mar-18 Mar-19 Mar-20 Mar-18 Mar-19 Mar-20

Dec-17 Dec-19 Dec-17 Dec-18 Dec-19 Dec-18

Sep-17 Sep-18 Sep-17 Sep-18 Sep-19 Sep-19 WIG Energy (rhs) EBITDA 12M Fwd discount (rhs) WIG ENE P/E WIG P/E

PGE Performance vs. Power Prices ex. EUA CEZ Performance vs. EEX Power Prices (CZK/MWh) 200 15 1600 600

180 13 1400 550 160 11 1200 500 140 9 1000 450 120 7 800 400 100 5

80 3 600 350

60 1 400 300

Jun-17 Jun-18 Jun-19 Jun-17 Jun-18 Jun-19

Mar-19 Mar-20 Mar-19 Mar-20 Mar-18 Mar-18

Dec-17 Dec-18 Dec-19 Dec-17 Dec-18 Dec-19

Sep-18 Sep-19 Sep-17 Sep-18 Sep-19 Sep-17 Power Prices ex. EUA for lignite plant PGE (rhs) EEX 1Y Fwd (CZK/MWh) CEZ (rhs)

Source: Bloomberg, mBank

Utilities

Load Factor, Bełchatów Power Station Load Factor, Turów Power Station 100% 100%

80% 80%

60% 60%

40% 40%

20% 20%

0% 0%

1-Jul

1-Jan

1-Oct

1-Jun

1-Apr

1-Feb

1-Mar

1-Dec

1-Sep

1-Aug

1-Nov

1-Jan

1-Oct

1-Jun

1-Apr

1-May

1-Feb

1-Mar

1-Dec

1-Sep

1-Aug

1-Nov 1-May 2018 2019 2020 2018 2019 2020

Load Factor, Kozienice Power Station Load Factor, Jaworzno Power Station 100% 100%

80% 80%

60% 60%

40% 40%

20% 20%

0% 0%

1-Jul

1-Jan

1-Oct

1-Jun

1-Apr

1-Feb

1-Jan

1-Oct

1-Jun

1-Mar

1-Apr

1-Dec

1-Sep

1-Feb 1-Aug

1-Nov

1-Mar

1-Dec

1-May

1-Sep

1-Aug

1-Nov 1-May 2018 2019 2020 2018 2019 2020

Load Factor, Opole Power Station, Block B5 Load Factor, Opole Power Station, Block B6 100% 100%

80% 80%

60% 60%

40% 40%

20% 20%

0% 0%

1-Jul 1-Jul

1-Jan 1-Jan

1-Oct 1-Oct

1-Jun 1-Jun

1-Apr 1-Apr

1-Feb 1-Feb

1-Mar 1-Mar

1-Dec 1-Dec

1-Sep 1-Sep

1-Aug 1-Aug

1-Nov 1-Nov

1-May 1-May 2019 2020 2019 2020

Load Factor, Połaniec Power Station Load Factor, Rybnik Power Station 100% 100%

80% 80%

60% 60%

40% 40%

20% 20%

0% 0%

1-Jul

1-Jan

1-Oct

1-Jun

1-Apr

1-Feb

1-Jan

1-Oct

1-Jun

1-Mar

1-Apr

1-Dec

1-Sep

1-Aug 1-Feb

1-Nov

1-Mar

1-Dec

1-May

1-Sep

1-Aug

1-Nov 1-May 2018 2019 2020 2018 2019 2020

Source: PSE, mBank; Load factor = actual generation (7-day average) as a percentage of available capacity

Gas & Oil

Refining Margins (US$/bbl) Urals/Brent Pricing Differential (US$/bbl) 10 5.0

8 4.0 3.0 6 2.0 4 1.0 2 0.0 0 -1.0

-2 -2.0

Jul-19 Jul-19

Jan-19 Jan-20 Jan-19 Jan-20

Oct-19 Oct-19

Jun-19 Jun-19

Apr-19 Apr-20 Apr-19 Apr-20

Feb-19 Feb-20 Feb-19 Feb-20

Mar-19 Mar-20 Mar-19 Mar-20

Dec-18 Dec-19 Dec-18 Dec-19

Sep-19 Sep-19

Aug-19 Aug-19

Nov-18 Nov-19 Nov-18 Nov-19

May-19 May-20 May-19 May-20

Refining Margin Urals/Brent Pricing Differential (USD/Bbl)

Cracking Margins on Diesel & Gasoline (US$/bbl) Price of Urals Crude (PLN/bbl) 30 300

250 20

200 10 150 0 100

-10 50

Jul-19

Jan-19 Jan-20

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Jan-19 Jan-20

Oct-19

Jun-19

Mar-19 Mar-20

Apr-19 Apr-20

Dec-18 Dec-19

Sep-19

Feb-19 Feb-20

Aug-19

Nov-18 Nov-19

Mar-19 Mar-20

Dec-18 Dec-19

May-19 May-20

Sep-19

Aug-19

Nov-18 Nov-19

May-19 May-20

Diesel cracks Gasoline cracks Urals Crude (PLN/Bbl)

HSFO Cracks (US$/bbl) vs. Inverse of Brent Price CFTC Net Speculative Positions In Oil 0.05 0 450 400 0.04 -10 350 Tysiące 300

0.03 -20 250 200

0.02 -30 150 100 50 0.01 -40

Jul-19

Jan-19 Jan-20

Oct-19

Jun-19

Apr-20 Apr-19

Feb-20 Feb-19

Mar-20 Mar-19

Dec-18 Dec-19

Sep-19

Aug-19

Nov-18 Nov-19

May-20 May-19

Jul-19

Jan-19 Jan-20

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Mar-19 Mar-20

Dec-19 Dec-18

Sep-19

Aug-19

Nov-18 Nov-19 May-19 HSFO Cracks (rhs) Inverse of Brent Price CFTC Net Speculative Positions In Oil

Brent/WTI Spread vs. Cushing Oil Stockpile US Net Fuel Exports 18 65,000 4,500 16 60,000 4,000 14 55,000 3,500 12 50,000 3,000 10 45,000 2,500 8 40,000 2,000 6 35,000 1,500 4 30,000 1,000 2 25,000 500

0 20,000 0

Jul-19 Jul-19

Jan-19 Jan-20 Jan-20 Jan-19

Oct-19 Oct-19

Jun-19 Jun-19

Apr-19 Apr-20 Apr-19 Apr-20

Feb-19 Feb-19 Feb-20 Feb-20

Mar-20 Mar-19 Mar-20 Mar-19

Dec-18 Dec-19 Dec-18 Dec-19

Sep-19 Sep-19

Aug-19 Aug-19

Nov-19 Nov-19 Nov-18 Nov-18

May-19 May-19 Cushing Oil Stockpile (rhs) Brent/WTI Spread US Net Fuel Exports Source: Bloomberg, mBank

Gas & Oil

Diesel Inventories @ARA US Refinery Utilization Rates 4000 100%

95% 3500 90% 3000 85%

2500 80%

75% 2000 70%

1500 65%

Jul

Jan

Jul

Oct

Jun

Apr

Feb

Mar

Dec

Sep

Aug

Nov

Jan

Oct

May

Jun

Apr

Feb

Mar

Dec

Sep

Aug

Nov May 5-year range 2018 2019 2020 5-year range 2018 2019 2020

US Gasoline Demand US Gasoline Inventories

10000 275

9000 260

8000 245 7000 230 6000 215 5000

4000 200

Jul

Jan

Oct

Jun

Apr

Feb

Mar

Dec

Sep

Aug

Nov

Jan

Oct

Jun

Apr

May

Feb

Mar

Dec

Sep

Aug

Nov May 5-year range 2018 2019 2020 5-year range 2018 2019 2020

Global Refinery Outages (mbbl/d) US Crude Oil Production (mboe/d) vs. Active Rigs 12,000 1000 13,500

10,000 800 12,000 8,000

600 10,500 6,000

4,000 400 9,000

2,000 200 7,500

Jul

Jan

Oct

Jun

Apr

Feb

Mar

Dec

Sep

Aug

Nov

May

Jul-19

Jan-20 Jan-19

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Mar-19 Mar-20

Dec-19 Dec-18

Sep-19

Aug-19

Nov-18 Nov-19 5-year range 2018 2019 2020 May-19 US Crude Oil Production (rhs) Active Rigs (lhs)

PKN Performance vs. Benchmark Margins Normalized Oil Stock Chart 140 50 140

120 40 120 30 100 100 20 80 80 10

60 0 60

40 -10 40

Jul-19

Jan-19 Jan-20

Oct-19

Jun-19

Apr-19 Apr-20

Jan-20

Feb-20 Oct-19 Feb-19

Jun-19

Apr-20

Mar-19 Mar-20

Feb-20

Dec-18 Dec-19

Sep-19

Aug-19

Nov-18 Nov-19

Mar-20

Dec-19

Sep-19

Aug-19

May-19 May-20

Nov-19 May-19 Margin (PLN/Bbl; rhs) PKN PW (lhs) PKN LTS MOL TUPRAS OMV

Source: Bloomberg, mBank

Petrochemicals & NatGas

Margins on Polyolefins Margins on Olefins 1100 500

1050 400 1000

950 300 900

850 200 800

750 100

Jul-19 Jul-19

Jan-19 Jan-20 Jan-19 Jan-20

Oct-19 Oct-19

Jun-19 Jun-19

Apr-19 Apr-19 Apr-20 Apr-20

Feb-19 Feb-20 Feb-19 Feb-20

Mar-19 Mar-20 Mar-19 Mar-20

Dec-18 Dec-19 Dec-19 Dec-18

Sep-19 Sep-19

Aug-19 Aug-19

Nov-18 Nov-18 Nov-19 Nov-19

May-19 May-19 Polyolefins (lhs) Olefins (rhs)

Margins on Butadiene, Benzene & PTA (US$/t) EU Gas Storage Levels (% Full) 800 400 100% 90% 600 300 80% 70% 400 200 60%

200 100 50% 40% 0 0 30% 20% -200 -100

10%

Jul

Jan

Oct

Jun

Apr

Feb

Mar

Dec

Sep

Aug

Nov

May

Jul-19

Jan-19 Jan-20

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Mar-20 Mar-19

Dec-18 Dec-19

Sep-19

Aug-19

Nov-18 Nov-19 May-19 5-year range 2018 2019 2020 Butadiene Benzene (rhs) PTA (rhs)

Estimated Costs of Imported Natural Gas (PLN/MWh) Prices of US LNG Exports to EU and Asia 150 30

125 25

100 20 15 75 10 50 5 25 0

Jul-19

Jan-19 Jan-20

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Mar-19 Mar-20

Dec-19 Dec-18

Sep-19

Aug-19

Nov-19

May-19 May-20

Jul-19

Jan-20

Oct-19

Jun-19

Apr-20

Feb-20

Mar-20

Dec-19

Sep-19

Aug-19 Nov-19 May-20 Henry Hub delivery to EU Henry Hub delivery to Asia NCG 1M Gazprom Qatargas NCG Europa 1M JKM LNG

NCG Prices, POLPX vs. Benchmarks (PLN/MWh ) LNG Spot Rates vs. Estimated Qatargas rates 140 14 140 120 12 120 100 10 100 80 8

60 6 80

40 4 60

20 2 40 0 0

Jul-19

Jan-20

Oct-19

Jun-19

Apr-20

Feb-20

Mar-20

Dec-19

Sep-19

Aug-19

Nov-19

May-19

Jul-19

Jan-20

Oct-19

Jun-19

Apr-20

Feb-20

Mar-20

Dec-19

Sep-19

Aug-19

Nov-19 May-20 Spread 1Y NCG 1M NCG 1Y POLPX 1Y LNG France LNG Belgium Qatargas

Source: Bloomberg, mBank

Weekly Performance Charts

Oil Refiners (L) & Petrochemical Producers (R) 7.1% 8.2% 7.6% 5.6% 3.2% 3.5% 3.3% 4.0% 2.1% 1.8% 0.2% 0.3% 0.9%

-0.2% -0.1% -2.2% -1.5% -2.2% -2.1% -1.6% -4.6% -3.8%

-11.1%

Natural Gas Companies

5.3% 5.7% 3.6% 4.2% 2.6% 1.8% 2.2% 1.0% 0.2% 0.4% 0.6%

-0.8% -2.0% -3.4% -3.2% -4.6%

-10.3%

4.7% 3.6%

1.5% 0.9% 0.3% 0.4% 0.5%

-0.3% -0.8% -2.8% -3.4% -4.2% -3.8% -4.8% -4.6% -6.2%

Coal Producers 5.0%

2.4% 2.9% 1.6% 1.0% 1.1% 0.0%

-0.7% -0.7% -0.6% -1.4% -1.2% -1.0% -1.9% -2.7% -3.9%

Steel Producers & Distributors

13.2%

8.1% 8.5% 8.8% 6.9% 4.5% 4.9% 1.8% 2.9% 4.3% 1.8% 1.9% 2.4% 0.3% 1.7% 1.8% 0.1%

-0.6% -0.5% -0.1% -2.4%-2.1% -3.4% -3.2%

Source: Bloomberg, mBank

Copper Charts CU Price incl. Supplier Premium (PLN 1,000/t; lhs) Cu Price (US$/t) vs. EM Currencies (pts.; rhs) vs. Net Speculative Positions (1,000, rhs) 7,500 1,750 28,000 80 27,000 60 7,000 1,700 26,000 40 6,500 1,650 25,000 20 24,000 6,000 1,600 0 23,000 -20 5,500 1,550 22,000 21,000 -40 5,000 1,500 20,000 -60

4,500 1,450 19,000 -80

Jun-17 Jun-19 Jun-18 Jun-19 Jun-18 Jun-17

Mar-18 Mar-20 Mar-18 Mar-20 Mar-19 Mar-19

Dec-17 Dec-18 Dec-19 Dec-17 Dec-19 Dec-18

Sep-18 Sep-17 Sep-18 Sep-17 Sep-19 Sep-19 Copper EM Ccy Index Cu+Premium (lhs) Net Specs Pos. (rhs)

Physical Copper Premiums (PLN/t) Copper Price Forecasts (median; US$/t) 500 7,500

450 7,000 400 6,500 350

300 6,000

250 5,500 200 5,000

150

Jun-18 Jun-19 Jun-17

Mar-19 Mar-20 Mar-18

Dec-17 Dec-18 Dec-19

Sep-18 Sep-19 Sep-17

Jun-17 Jun-19 Jun-18

Mar-18 Mar-19 Mar-20

Dec-18 Dec-19 Dec-17

Sep-17 Sep-19 Sep-18 2020 2021 2022 Physical Copper Premium

Silver prices (PLN/kg) Prices of gold (PLN/oz) 2,700 7,500 2,600 7,000 2,500 2,400 6,500 2,300 6,000 2,200 5,500 2,100 5,000 2,000 1,900 4,500 1,800

4,000

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19

Weekly Returns of Metal & Mining Stocks

8.3% 6.5% 6.6% 5.1% 4.2%

2.1% 2.2% 2.3% 1.6% 0.9% 0.9%

-0.6% -0.1% -1.3% -1.2% -0.8% -1.9% -2.6% -3.9% -4.8%

Source: Bloomberg, mBank

More Copper Charts

Prices of molybdenum (PLN/10 kg) Global Copper Inventories (1,000t) 1,100 900 800 1,000 700 900 600 500 800 400 300 700 200 600 100 0

500

Jun-17 Jun-18 Jun-19

Mar-18 Mar-20 Mar-19

Dec-17 Dec-18 Dec-19

Sep-18 Sep-19 Sep-17

Jun-17 Jun-18 Jun-19

Mar-19 Mar-20 Mar-18

Dec-18 Dec-19 Dec-17

Sep-18 Sep-19 Sep-17 Asia US Europe

New Bank Lending in China (CNY bn) Car Sales in China (thousands)

4,000 100% 3,000 3,500 75% 2,500 3,000 50% 2,500 25% 2,000 2,000 0% 1,500 1,500 -25% 1,000 -50% 1,000 500 -75% 500 0 -100%

Jun-18 Jun-19 Jun-17

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19

Jun-17 Jun-18 Jun-19

Mar-19 Mar-20

Lending volume (CNY bn) YoY change Mar-18

Dec-17 Dec-19 Dec-18

Sep-17 Sep-18 Sep-19

China PMI (points) % Change In Avg. New Home Prices In 70 CN Cities 55 14 1.75 12 1.50

50 10 1.25

8 1.00 45 6 0.75

4 0.50 40 2 0.25

35 0 0.00

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19 PMI PMI Caixin YoY (lhs) MoM (rhs)

Chine Copper Imports Metal Price Index (pts, rhs) vs. (concentrates, refined metal, scrap) Net Speculative Positions (million contracts, lhs) 1,400 40% 1.75 150 1,300 30% 1.50 140

1,200 20% Miliony 1.25 130

1,100 10% 1.00 120

1,000 0% 0.75 110

900 -10% 0.50 100 800 -20% 0.25 90 700 -30%

0.00 80

Jun-17 Jun-19 Jun-18

Mar-19 Mar-18 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-19 Sep-18

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-19 Dec-18

Sep-17 Sep-19 Sep-18 Imports (1,000t) YoY change (rhs) Total net spec metals bets (lhs) Metal Prices (rhs) Source: Bloomberg, mBank

Steel Charts

China Coking Coal & Iron Ore Prices, Rotterdam Scrap Production Costs of BOF vs. EAF Steel Producers Steel Prices (US$/t) (US$/t) 400 450 50

350 400 25 300 350 0 250 300 -25 200 150 250 -50 100 200 -75 50 150 -100

0 100 -125

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19

Oct-17 Oct-18 Oct-19

Jun-17 Jun-18 Jun-19

Apr-18 Apr-19 Apr-20

Feb-18 Feb-19 Feb-20

Dec-17 Dec-18 Dec-19

Aug-17 Aug-18 Aug-19 Coking Coal Iron Ore Scrap Steel BOF-EAF spread (rhs) BOF (lhs) EAF (lhs)

Prices of Steel Rebar & Hot-Rolled Steel (US$/t) Rebar Production Margins of EAF Steelmakers (US$/t) 700 250

225 600 200

500 175

150 400 125

300 100

Oct-17 Oct-18 Oct-19

Jun-17 Jun-18 Jun-19

Apr-18 Apr-19 Apr-20

Jun-17 Jun-18 Jun-19

Feb-19 Feb-20 Feb-18

Dec-17 Dec-18 Dec-19

Aug-17 Aug-19 Aug-18

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19 Steel Rebar Hot-Rolled Steel Billet Rebar Production Margin (EAF)

Rolled Steel & Billet Margins of BOF Steelmakers Global Steel Plant Capacity Utilization Rates & Output (US$/t) (Mt) 400 82% 165 80% 160 300 78% 155 76% 150 200 74% 145 72% 140 100 70% 135 68% 130

0 66% 125

Jun-17 Jun-19 Jun-18

Oct-17 Oct-18 Oct-19

Jun-17 Jun-18 Jun-19

Apr-18 Apr-19 Apr-20

Feb-19 Feb-20 Feb-18

Mar-18 Mar-19 Mar-20

Dec-17 Dec-19 Dec-18

Sep-17 Sep-18 Sep-19

Dec-17 Dec-18 Dec-19

Aug-17 Aug-19 Aug-18 Rolled Steel (BOF) Billet (BOF) Utilization Rate (%) Steel Output

China Steel PMI (pts) China Steel PMI New Orders & Backlog Orders (pts) 58 70 56 65 54 60 52 55 50 48 50 46 45 44 40 42 40 35 38 30

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19 New Orders Backlog Orders

Source: Bloomberg, mBank

More Steel Charts

Australia Coking Coal Exports (mmt) China Coking Coal Imports (mmt) 20 16 18 14 16 12 10 14 8 12 6 10 4 8 2

6 0

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19 Australia Coking Coal Exports (mmt) China Coking Coal Imports (mmt)

China Coke Inventories (lhs; mmt) & Average Prices Australia Coking Coal Shipments To China (mmt) (rhs; US$/t) 6 5.5 500 5.0 450 5 4.5 400 4 4.0 350

3 3.5 300 3.0 250 2 2.5 200

1 2.0 150

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19 Australia Coking Coal Shipments To China (mmt) Inventory (lhs; mmt) Avg. Price (rhs; US$/t)

China Coking Coal Prices vs. Benchmark (US$/t) China Coke Prices (US$/t) 260 400 240 380 220 360 200 340 320 180 300 160 280 140 260 120 240 100 220

200

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19

Benchmark Dalian

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 SGX Futures FOB Australia Sep-19 FOB Australia Swap Australia (Platts) Shanghai Tianjin Taiyuan

Coking Coal-Coke Price Spread (US$/t) China Steel Inventory (mmt) 180 26 160 22 140 120 18

100 14 80 10 60 6 40

Jul-19

Jan-20 Jan-19

Oct-19

Jun-19

Apr-19 Apr-20

Feb-20 Feb-19

Mar-19 Mar-20

Dec-18 Dec-19

Sep-19

Aug-19

Nov-18 Nov-19 May-19

5Y range 5Y avg Current Inventory

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19

Source: Bloomberg, mBank

Zinc and Electrical Steel Charts

Exchange-Monitored Zinc Inventories (1,000t) Zinc Inventories in Three Chinese Regions (1,000t) 600 300

500 250

400 200

300 150

200 100

100 50

0 0

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-18 Sep-19 Sep-17

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-18 Sep-19 Sep-17

COMEX LME Tianjin Shanghai Guangdong

Zinc Prices vs. Stalprodukt Stock Performance (PLN) US Dollar Zinc Prices (US$/t)

12,500 600 4,250 11,500 500 3,750 10,500 400 3,250 9,500 300 2,750 8,500 200 2,250 7,500 100

6,500 0 1,750

Jun-18 Jun-19 Jun-17

Mar-18 Mar-20 Mar-19

Dec-17 Dec-19 Dec-18

Sep-17 Sep-18 Sep-19

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19

China spot price (lhs) STP performance (rhs) LME China spot price (lhs)

Polish Zloty Zinc Prices (PLN/t) China Electrical Steel Prices (US$/t) 2,400 12,000

2,200 11,000 2,000 10,000 1,800 9,000 1,600 8,000 1,400

7,000

Jul-19

Jan-19 Jan-20

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Mar-19 Mar-20

Dec-18 Dec-19

Sep-19

Aug-19

Nov-19 Nov-18

May-19

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-18 Sep-19 Sep-17 Quotation range Median Average

Prices of Steel Billet & Cold Rolled Coil (US$/t) Electrical Steel Production Margins (US$/t) 800 1,300 1,200 700 1,100 600 1,000 900 500 800 400 700 600

300

Jun-19 Jun-18

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19

Billet Cold rolled steel CRC spread Billet spread

Source: Bloomberg, mBank

Thermal Coal Charts

Hard Coal Production & Sales in Poland (1,000t) Poland Hard Coal Imports & Exports (1,000t) 6,000 2,200 1,000 5,750 2,000 900 5,500 1,800 800 5,250 1,600 700 5,000 1,400 600 4,750 1,200 500 4,500 1,000 400 4,250 800 300 4,000

600 200

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-19 Dec-18

Sep-17 Sep-18 Sep-19 Production Sales Imports (lhs) Exports (rhs)

Hard Coal Stockpiled By Polish Mines (1,000t) Inventory/ Production Ratio 8,000 160%

7,000 140%

6,000 120%

5,000 100%

4,000 80%

3,000 60%

2,000 40%

1,000 20%

Jun-17 Jun-18 Jun-19 Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-18 Mar-19 Mar-20 Mar-20

Dec-17 Dec-18 Dec-19 Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19 Sep-17 Sep-18 Sep-19

China Thermal Coal Inventories, Total & In Ports Thermal Coal Prices vs. Benchmarks (PLN/GJ) (mmt) 16 300 30

14 250 25

12 200 20

10 150 15

8 100 10

Jun-17 Jun-18 Jun-19 Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20 Mar-18 Mar-19 Mar-20

Dec-18 Dec-19 Dec-17 Dec-18 Dec-19 Dec-17

Sep-17 Sep-18 Sep-19 Sep-17 Sep-18 Sep-19 ARA 1Y LWB JSW USCB* Total (lhs) Ports (rhs)

Thermal Coal Exports By Top Producers (mmt) Thermal Coal Imports by Top Importers (mmt) 20 14 18 12 16 14 10 12 8 10 6 8 6 4 4 2 2

0 0

Jun-17 Jun-18 Jun-19

Mar-20 Mar-18 Mar-19

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19

Jun-17 Jun-18 Jun-19

Mar-18 Mar-19 Mar-20

Dec-17 Dec-18 Dec-19

Sep-17 Sep-18 Sep-19 Canada South Africa Colombia UK Germany Taiwan S. Korea USA Indonesia Russia India Japan China Source: Bloomberg, ARP, Eurostat, mBank *Upper Silesian Coal Basin

Fertilizer Charts

German NatGas Prices (US$/MWh) World Ammonia Prices (US$/t) 400 30

25 350

20 300

15 250

10 200

5 150

0 100

Oct-19

Jun-19

Apr-20 Apr-19

Feb-20 Feb-19

Dec-18 Dec-19

Aug-19

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Dec-19 Dec-18 Aug-19 Y+1 Contracts M+1 Contracts Black Sea Western Europe Middle East

Urea-Ammonia Price Difference World Urea Prices (US$/t)

400 350

350 300 300

250 250

200 200 150

100 150

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Dec-18 Dec-19

Aug-19

Oct-19

Jun-19

Apr-20 Apr-19

Feb-19 Feb-20

Dec-18 Dec-19 Aug-19 Black Sea Western Europe Middle East China Black Sea WesternEurope

World Ammonium Nitrate Prices (US$/t) CAN & UAN prices (US$/t)

230 300 220 275 210 250 200 225 200 190 175 180 150 170 125

160 100

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Dec-18 Dec-19

Oct-19

Jun-19

Aug-19

Apr-20 Apr-19

Feb-19 Feb-20

Dec-18 Dec-19 Aug-19 Baltic Sea Black Sea UAN Black Sea UAN France CAN Europe

World Ammonium Sulfate Prices (US$/t) Production Margins On Nitrogen Fertilizers (US$/t)

300 225 290 200 280 175 150 270 125 260 100 250 75 240 50 230 25

220

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Dec-18 Dec-19

Aug-19

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Dec-18 Dec-19 Aug-19 Urea (W Europe) AN (Baltic Sea) Europe US Canada CAN (EU) UAN (France) Source: Bloomberg, mBank

Fertilizer Charts

Prices of P & K Fertilizers (US$/t) Production Margins on P & K Fertilizers (US$/t) 500 350

450 300 400 250 350

300 200

250

150

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Dec-18 Dec-19

Aug-19

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Dec-18 Dec-19 DAP (Baltic Sea) DAP (Benelux) Aug-19 DAP (Baltic Sea) DAP (Benelux) DAP (Morocco) MAP (Baltic Sea)

Prices of Sulfur, Potash & Phosphorites (US$/t) Fertilizer-to-Crop Price Ratios 2.00 300

250 1.75

200 1.50

150 1.25 100 1.00 50

0.75

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Dec-18 Dec-19

Aug-19

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Dec-18 Dec-19 Aug-19 Sulfur (Europe) Potash (Baltic Sea) Urea/Wheat Urea/Corn AN/Wheat AN/Corn Phosphorites (Morocco)

CBOT Open Positions In Corn and Wheat CBT CBOT Corn and Wheat Prices (US$/t) 300 200

200 190

100 180 0 170 -100 160 -200

-300 150

Oct-19

Jun-19

Apr-19 Apr-20

Feb-19 Feb-20

Oct-19

Dec-18 Dec-19 Jun-19

Apr-19 Apr-20

Aug-19

Feb-19 Feb-20

Dec-18 Dec-19 Aug-19 Corn Contracts Wheat Contracts CBOT Corn CBOT Wheat

Weekly Returns of Fertilizer Stocks 13.0%

6.1% 5.5% 4.5% 4.5%

2.8% 2.0% 2.3% 1.0% 1.3% 0.0% 0.3%

Source: Bloomberg, mBank

Agricultural Commodities

Sugar Prices (US$/Mt) UAH Exchange Rates & Ukraine 10Y Treasury Yields 600 40 12.5

35 11.5 500

30 10.5 400

25 9.5 300 20 8.5

200

Jul-17 Jul-18 Jul-19

Jan-18 Jan-19 Jan-20

Oct-17 Oct-18 Oct-19

Apr-18 Apr-19 Apr-20

Jul-17 Jul-19 Jul-18

Jan-18 Jan-19 Jan-20

Oct-18 Oct-19 Oct-17

Apr-19 Apr-20 Apr-18 UAH/USD UAH/EUR Ukraine Brazil LIFFE UKR 10Y Treasury Yields (rhs, UAH) Wheat Prices (US$/Mt) Corn Prices (US$/Mt) 275 250

225 250 200 225 175 200 150

175 125

150 100

Jul-17 Jul-18 Jul-19

Jan-18 Jan-19 Jan-20

Oct-17 Oct-18 Oct-19

Apr-18 Apr-19 Apr-20

Jan-19 Jan-20 Jan-18

Oct-17 Oct-18 Oct-19

Apr-18 Apr-19 Apr-20 Ukraine US Europe Ukraine US Europe

Model Margins on Soy Oil (US$/Mt) Model Margins on Sunflower Oil (US$/Mt) 125 150

100 125

75 100 50

75 25

0 50

Jul-17 Jul-19 Jul-18

Jul-17 Jul-18 Jul-19

Jan-18 Jan-19 Jan-20

Oct-17 Oct-18 Oct-19

Jan-19 Jan-20 Jan-18

Apr-19 Apr-20 Oct-17 Oct-19 Apr-18 Oct-18

Apr-18 Apr-20 Apr-19

Soy Oil Margin Quarterly Average Sunflower Oil Margin Quarterly Average

Weekly Returns of Agricultural Stocks 11.1%

5.3% 4.3% 3.4% 3.5% 2.6%

0.0% 0.3% 0.4%

-0.1% -1.4% -1.0% -2.5%

Source: Bloomberg, mBank

Comparison of Utility Company Valuations EV/EBITDA EV/S P/E EBITDA Margin DY Price 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 UTILITIES CEZ 484.0 7.0 6.7 7.4 2.1 1.9 2.0 18.1 12.0 16.8 29% 29% 27% 4.9% 7.0% 7.5% Enea 5.5 2.8 2.8 2.5 0.6 0.5 0.5 2.3 2.2 1.7 20% 18% 21% 0.0% 0.0% 4.5% Energa 7.9 3.8 4.3 4.6 0.7 0.7 0.8 6.1 5.9 5.3 19% 17% 17% 0.0% 0.0% 0.0% PGE 4.2 2.8 3.1 2.3 0.5 0.5 0.5 - 5.7 2.8 19% 15% 21% 0.0% 0.0% 4.4% Tauron 1.2 4.5 4.8 4.2 0.8 0.8 0.8 - 3.1 1.7 18% 17% 19% 0.0% 0.0% 0.0% ZE PAK* 7.5 - 0.5 0.4 0.0 0.0 0.0 - 10.1 3.7 - 8% 11% - - 3.3% EDF 7.6 4.8 4.7 4.3 1.0 1.0 1.0 5.1 17.8 13.2 21% 22% 23% 4.3% 2.6% 3.6% EDP 4.3 9.4 9.5 9.3 2.4 2.2 2.2 30.6 19.1 18.1 25% 23% 23% 4.4% 4.4% 4.6% Endesa 20.5 7.2 7.1 7.0 1.4 1.4 1.4 100+ 13.1 12.9 20% 20% 20% 7.0% 7.6% 6.3% Enel 6.5 7.9 7.2 6.9 1.6 1.6 1.6 31.0 13.0 12.1 21% 22% 23% 5.0% 5.5% 5.9% EON 9.8 17.2 8.2 7.9 1.4 0.9 0.9 14.4 15.3 13.7 8% 11% 12% 4.7% 4.8% 5.0% Fortum 15.6 13.9 9.7 9.1 4.2 1.0 0.8 9.1 10.2 11.2 30% 11% 9% 7.1% 7.0% 6.8% Iberdola 9.1 10.3 10.1 9.5 2.9 2.8 2.7 16.9 16.5 15.5 29% 28% 29% 4.0% 4.5% 4.8% National Grid 8.8 13.1 11.1 10.6 3.9 3.8 3.7 19.7 14.9 14.5 30% 34% 35% 5.3% 5.5% 5.7% Red Electrica 15.8 10.0 10.2 10.1 8.0 7.9 7.9 11.9 13.0 13.0 80% 77% 78% 6.2% 6.5% 6.5% RWE 30.0 12.2 7.4 6.6 1.6 1.4 1.4 2.2 18.2 15.1 13% 19% 21% 2.7% 2.8% 3.0% SSE 11.8 10.1 11.8 11.2 0.9 2.9 2.9 8.6 14.3 13.1 9% 24% 26% 8.2% 6.6% 6.7% Verbund 38.5 12.6 12.5 12.6 4.0 4.2 4.1 24.1 24.4 24.7 32% 33% 33% 1.8% 2.0% 2.0% Median 9.4 7.3 7.2 1.5 1.4 1.4 13.2 13.0 13.1 21% 21% 22% 4.4% 4.5% 4.7%

Comparison of Gas & Oil Company Valuations EV/EBITDA EV/S P/E EBITDA Margin DY Price 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 OIL REFINERS Lotos 58.88 4.8 25.9 4.7 0.5 0.8 0.7 9.4 - 8.3 10% 3% 15% 5.1% 3.4% 5.1% MOL 2000.00 3.5 8.5 5.5 0.4 1.0 0.9 6.7 - 12.5 13% 12% 17% 7.1% 0.0% 3.5% PKN Orlen 63.06 3.8 8.3 4.5 0.3 0.6 0.5 6.3 - 9.2 8% 7% 12% 5.6% 4.8% 4.8% Hellenic Petroleum 6.10 7.0 8.4 6.3 0.5 0.7 0.6 11.5 12.5 6.3 7% 8% 9% 8.2% 5.7% 6.8% HollyFrontier 30.46 3.9 11.2 6.4 0.4 0.7 0.5 6.6 100+ 13.6 11% 6% 8% 4.4% 4.6% 4.7% Marathon Petroleum 35.57 6.4 11.7 7.3 0.5 0.7 0.6 8.9 - 14.6 8% 6% 8% 6.0% 6.5% 7.0% Motor Oil 14.19 4.1 6.1 4.2 0.2 0.3 0.3 7.0 14.5 7.5 5% 5% 7% 8.1% 6.5% 7.9% Neste Oil 34.86 9.6 14.7 12.4 1.7 2.5 2.1 15.0 22.6 19.7 18% 17% 17% 2.6% 2.6% 2.9% OMV 30.02 3.9 5.6 4.1 0.9 1.2 1.0 5.8 17.6 7.9 22% 21% 24% 6.7% 6.5% 6.8% Phillips 66 76.46 11.1 13.8 7.5 0.4 0.6 0.5 11.2 30.5 11.6 4% 5% 7% 4.6% 4.8% 5.0% Saras 0.70 3.9 4.1 3.1 0.1 0.2 0.1 25.3 44.0 9.5 3% 4% 4% 11.4% 6.1% 5.4% Tupras 80.15 8.4 9.2 5.3 0.4 0.5 0.4 38.2 52.1 7.1 4% 6% 7% - 10.2% 13.1% Valero Energy 65.68 6.0 18.8 7.4 0.4 0.7 0.5 11.2 - 15.8 6% 4% 7% 5.5% 6.0% 6.1% Median 4.8 9.2 5.5 0.4 0.7 0.5 9.4 22.6 9.5 8% 6% 8% 5.8% 5.7% 5.4%

Comparison of Petrochemical Company Valuations EV/EBITDA EV/S P/E EBITDA Margin DY Price 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 PETROCHEMICALS PKN Orlen 63.06 3.8 8.3 4.5 0.3 0.6 0.5 6.3 - 9.2 8% 7% 12% 5.6% 4.8% 4.8% Axiall 44.01 6.3 8.3 7.4 1.2 1.3 1.2 13.5 31.3 19.9 18% 16% 17% 2.3% 2.4% 2.5% Braskem 26.39 14.9 6.8 5.9 1.0 1.0 0.9 - - 24.2 7% 15% 16% 9.5% 0.1% 0.6% Eastman Chemical 65.46 8.2 8.6 7.8 1.6 1.8 1.7 11.9 11.1 9.5 19% 21% 22% 3.8% 4.0% 4.3% Huntsman Corp 17.39 6.3 10.4 6.7 0.7 0.9 0.8 7.1 48.0 12.6 12% 8% 11% 3.7% 3.8% 3.9% Lotte Chemicals 184,000 3.9 5.2 3.8 0.5 0.6 0.5 8.8 14.8 8.2 12% 11% 14% 3.6% 3.0% 3.7% LyondellBasell 60.42 5.8 8.6 6.8 1.0 1.3 1.2 6.3 12.4 8.0 17% 15% 17% 6.9% 7.0% 7.2% Mitsubishi Chemical 604.50 6.7 7.5 8.0 0.8 0.9 0.9 5.1 11.8 13.3 12% 12% 12% 6.6% 6.2% 5.6% Mitsui Chemicals 2033.00 6.3 7.1 8.4 0.6 0.7 0.7 5.3 8.7 12.5 10% 9% 9% 4.9% 4.9% 4.5% Westlake Chemical 44.01 6.3 8.3 7.4 1.2 1.3 1.2 13.5 31.3 19.9 18% 16% 17% 2.3% 2.4% 2.5% Median 6.3 8.3 7.1 0.9 0.9 0.9 7.1 13.6 12.6 12% 13% 15% 4.4% 3.9% 4.1% Source: mBank for Polish companies, Bloomberg for foreign firms and companies marked with an asterisk

Comparison of NatGas Company Valuations EV/EBITDA EV/S P/E EBITDA Margin DY Price 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 GAS COMPANIES PGNiG 3.85 4.7 4.5 3.7 0.6 0.7 0.7 16.2 12.4 8.6 13% 16% 20% 2.9% 2.5% 3.2% A2A 1.22 6.3 6.5 6.3 1.0 1.1 1.1 9.7 13.1 12.8 16% 17% 17% 6.4% 6.6% 6.7% BG Group 12.93 4.0 6.0 4.6 0.6 0.8 0.7 8.4 32.4 12.1 15% 14% 15% 11.4% 4.6% 5.2% BP 3.10 5.7 6.5 5.1 0.5 0.7 0.6 19.9 100+ 10.0 9% 11% 12% 10.4% 10.4% 10.2% Centrica 0.35 4.4 3.7 3.7 0.2 0.3 0.3 - 8.2 5.6 5% 7% 7% 14.2% 5.4% 6.8% Enagas 20.85 11.2 9.4 9.7 7.7 7.9 8.4 11.8 12.5 12.2 69% 84% 87% 7.5% 8.1% 8.1% Endesa 20.52 7.2 7.1 7.0 1.4 1.4 1.4 100+ 13.1 12.9 20% 20% 20% 7.0% 7.6% 6.3% Engie 9.96 7.1 5.8 5.3 0.9 0.9 0.9 29.3 11.8 9.2 13% 16% 17% 8.0% 6.8% 7.9% Eni 8.26 3.4 5.2 3.8 0.7 0.9 0.8 100+ - 18.4 21% 18% 21% 10.4% 9.4% 9.4% Equinor 149.80 3.8 4.8 3.3 1.1 1.4 1.2 30.9 100+ 17.7 29% 29% 35% 1.6% 4.5% 5.5% Gas Natural SDG 15.91 7.4 7.9 7.5 1.5 1.5 1.4 11.1 12.8 11.3 20% 19% 19% 8.4% 9.1% 9.5% Gazprom 197.55 4.2 5.5 4.7 1.0 1.2 1.1 3.7 9.8 5.4 23% 22% 23% 7.7% 4.7% 8.3% Hera 3.33 8.8 7.7 7.4 1.2 1.2 1.1 12.7 16.5 15.7 13% 15% 15% 3.0% 3.2% 3.3% NovaTek 150.20 3.3 14.4 11.5 3.4 4.4 3.8 3.2 15.9 7.5 105% 30% 33% 3.2% 3.1% 5.6% ROMGAZ 31.60 5.9 4.3 4.7 2.1 2.1 2.1 11.2 8.4 10.0 35% 49% 45% 5.1% 10.7% 9.0% Shell 15.00 3.9 6.0 4.6 0.6 0.8 0.7 8.5 33.5 12.6 15% 14% 15% 11.2% 4.4% 5.0% Snam 4.12 12.1 12.0 11.7 9.8 9.7 9.5 12.5 12.7 12.1 82% 81% 81% 5.8% 6.1% 6.3% Total 33.27 4.3 6.9 5.0 0.8 1.0 0.8 8.6 26.4 13.2 19% 14% 17% 8.1% 8.2% 8.3% Median 5.2 6.3 5.1 1.0 1.1 1.1 11.2 12.8 12.1 19% 17% 19% 7.6% 6.4% 6.8%

Comparison of E&P Company Valuations EV/EBITDA EV/S P/E EBITDA Margin DY Price 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 E&P COMPANIES MOL 2000.00 4.2 4.8 3.9 0.5 0.6 0.5 6.3 19.9 7.0 12% 13% 13% - 5.3% 5.8% Bashneft 1804.00 2.5 1.8 1.5 0.5 0.4 0.4 3.6 2.5 1.9 20% 24% 25% - 14.3% 15.4% BP 3.10 5.7 6.5 5.1 0.5 0.7 0.6 19.9 100+ 10.0 9% 11% 12% 10.4% 10.4% 10.2% Dana Gas 0.66 3.5 4.5 5.2 2.6 2.3 2.6 8.1 10.6 12.9 73% 52% 49% 30.7% 8.7% 8.4% Eni 8.26 3.4 5.2 3.8 0.7 0.9 0.8 100+ - 18.4 21% 18% 21% 10.4% 9.4% 9.4% Equinor 149.80 3.8 4.8 3.3 1.1 1.4 1.2 30.9 100+ 17.7 29% 29% 35% 1.6% 4.5% 5.5% Gazprom Neft 332.85 3.7 6.7 4.5 0.9 1.2 1.0 3.9 7.3 5.6 25% 19% 23% 5.4% 100%+ 8.9% Gulf Keystone 0.73 0.9 3.6 1.1 0.5 1.1 0.6 4.8 - 14.0 59% 31% 56% - - - Lukoil 5412.50 3.0 4.8 3.9 0.5 0.7 0.6 5.6 13.4 9.1 16% 15% 15% 6.4% 6.5% 8.3% Occidental Petroleum 14.13 8.9 11.0 9.0 3.0 3.4 3.4 - - - 33% 31% 37% 22.2% 11.3% 7.8% Repsol 8.40 - 6.1 4.4 0.5 0.8 0.7 - 18.1 7.9 - 14% 15% 11.1% 11.5% 11.5% Rosneft Oil 373.95 4.3 6.6 4.8 0.9 1.5 1.2 5.6 24.1 7.0 22% 22% 24% 7.6% 3.0% 7.1% Shell 15.00 3.9 6.0 4.6 0.6 0.8 0.7 8.5 33.5 12.6 15% 14% 15% 11.2% 4.4% 5.0% Surgutneftegas 36.70 ------12.4 3.3 6.6 - - - 1.9% 10.2% 3.5% Total 33.27 4.3 6.9 5.0 0.8 1.0 0.8 8.6 26.4 13.2 19% 14% 17% 8.1% 8.2% 8.3% Tullow Oil 0.24 - 5.0 5.4 2.6 3.4 3.6 - - - - 67% 66% 7.6% - - Median 3.8 5.2 4.5 0.7 1.0 0.8 7.2 15.7 9.6 21% 19% 23% 8.1% 8.7% 8.3%

Comparison of Mining Company Valuations EV/EBITDA EV/S P/E EBITDA Margin DY Price 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 MINING COMPANIES JSW 13.62 0.4 4.0 2.5 0.1 0.3 0.3 2.5 - - 22% 8% 11% 12.6% 0.0% 0.0% KGHM 80.44 5.1 7.2 7.2 1.0 1.1 1.1 11.3 26.8 33.2 20% 16% 16% 0.0% 1.2% 0.9% LW Bogdanka* 19.40 0.6 0.7 0.9 0.2 0.2 0.2 2.1 3.8 6.4 36% 30% 25% - 7.2% 3.0% Anglo American 15.70 4.0 4.5 3.8 1.2 1.4 1.2 7.1 10.9 8.1 30% 31% 32% 5.4% 3.9% 5.1% Antofagasta 8.22 5.6 7.9 5.4 2.6 3.1 2.6 20.6 64.2 21.8 46% 39% 49% 3.3% 0.9% 2.5% BHP Group 15.50 5.8 5.5 6.2 2.9 2.9 3.1 12.5 10.5 12.6 50% 52% 49% 6.6% 5.9% 5.0% Freeport-McMoRan 8.74 11.4 14.6 5.6 2.0 2.4 1.8 - - 9.5 18% 17% 32% 2.3% 0.6% 1.7% Glencore 1.48 5.6 6.2 5.0 0.3 0.3 0.3 - 35.3 12.3 5% 5% 5% 10.6% 5.1% 7.6% Grupo Mexico 49.39 5.6 6.3 5.4 2.8 2.7 2.4 9.0 20.4 11.6 51% 42% 44% 6.4% 5.1% 8.9% Kazakhmys 4.46 4.6 5.7 5.1 2.4 2.8 2.6 4.7 8.2 6.9 52% 49% 50% 2.1% 1.3% 1.2% Rio Tinto 42.63 6.2 5.4 5.8 2.3 2.5 2.6 11.1 10.7 11.8 37% 46% 44% 7.0% 6.0% 5.5% Southern CC 35.18 9.1 13.5 10.1 4.5 5.3 4.6 18.3 33.0 20.0 50% 39% 45% 4.5% 3.5% 4.2% Median 5.6 6.0 5.4 2.2 2.5 2.1 10.0 15.6 11.8 36% 35% 38% 5.4% 3.7% 3.6% ALUMINUM PRODUCERS Grupa Kęty 347.50 7.7 8.6 8.3 1.3 1.3 1.3 11.2 12.8 12.2 16% 16% 15% 6.9% 4.4% 6.2% Alcoa 8.21 6.6 4.8 3.5 0.4 0.5 0.4 - - - 6% 10% 13% - - - Constellium 7.81 6.0 7.0 6.0 0.5 0.6 0.6 16.2 - 11.4 9% 9% 10% - - - Kaiser Aluminum 66.36 6.8 10.3 6.9 0.8 1.0 1.0 17.1 26.8 16.9 12% 10% 14% 3.6% 3.9% 4.3% Norsk Hydro 23.68 6.9 5.4 4.4 0.4 0.5 0.4 - 26.3 13.1 7% 9% 10% 5.3% 5.0% 5.1% Rusal 2.81 17.9 17.1 13.4 1.2 1.4 1.3 5.7 4.0 3.7 7% 8% 10% - 2.5% 5.9% Median 6.8 7.8 6.4 0.7 0.8 0.8 13.7 19.6 12.2 8% 9% 11% 5.3% 4.1% 5.5% Source: mBank for Polish companies, Bloomberg for foreign firms and companies marked with an asterisk

Comparison of Fertilizer Company Valuations EV/EBITDA EV/S P/E EBITDA Margin DY Price 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 FERTILIZER PRODUCERS Grupa Azoty 30.85 4.6 6.1 9.0 0.6 0.8 0.8 8.2 14.5 - 13% 13% 9% 0.0% 0.0% 0.0% ZA Police* 11.20 9.6 16.5 9.2 0.7 0.8 0.7 17.0 - - 7% 5% 8% - - - Acron 6194.00 10.5 9.5 8.2 3.2 3.0 2.7 10.0 15.5 9.6 31% 32% 33% 6.3% 5.8% 5.7% CF Industries 27.59 6.4 8.9 8.8 2.7 3.0 2.9 12.3 18.4 15.9 43% 34% 33% 4.3% 4.4% 4.4% Israel Chemicals 12.20 5.8 7.6 6.6 1.3 1.4 1.3 9.3 14.8 11.5 23% 18% 20% 5.5% 2.6% 4.3% K+S 5.53 6.6 8.6 6.6 1.1 1.1 1.0 12.0 - 17.8 16% 13% 16% 2.7% 1.5% 2.6% Phosagro 2796.00 6.8 6.7 5.9 2.1 2.1 1.9 7.3 14.3 7.6 30% 31% 32% 8.0% 4.2% 6.2% The Mosaic Company 11.56 - 8.0 5.8 1.0 1.1 1.0 - 72.3 13.9 - 14% 18% 1.7% 1.7% 1.7% Yara International 331.40 7.7 5.8 5.4 1.1 1.0 0.9 17.1 10.3 8.6 15% 18% 18% 3.4% 5.1% 6.5% Median 6.7 8.0 6.6 1.1 1.1 1.0 11.0 14.8 11.5 20% 18% 18% 3.9% 3.4% 4.4%

Comparison of Agricultural Company Valuations EV/EBITDA EV/S P/E EBITDA Margin DY Price 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 AGRI PRODUCERS Astarta* 16.00 4.4 4.1 2.8 0.8 0.8 0.7 53.2 - 2.6 17% 19% 25% - - 5.9% Kernel 42.00 4.5 6.0 5.3 0.4 0.5 0.4 5.1 7.0 6.3 9% 8% 8% 2.1% 2.3% 2.2% Agrana Beteiligungs 17.36 10.7 8.4 - 0.7 0.6 - 42.3 21.4 - 6% 8% - 5.8% 6.0% - Bunge Limited 35.38 - 9.3 7.9 0.3 0.3 0.3 - 13.0 8.9 - 3% 4% 5.7% 5.5% 5.8% Cosan 63.75 10.8 5.9 5.0 2.4 0.5 0.4 10.4 18.0 12.0 23% 8% 9% 1.6% 2.0% 3.0% MHP 5.90 4.7 4.2 - 1.0 1.0 - 2.9 - - 21% 24% - 12.7% 4.7% - Nisshin Oillio 3380.00 7.9 7.8 7.4 0.5 0.5 0.5 12.8 12.9 12.2 6% 6% 6% 2.4% 2.4% 2.4% Suedzucker 13.57 - 11.3 7.4 0.8 0.8 0.7 - - 16.0 - 7% 10% 1.5% 1.6% 2.1% Wilmar Int. 3.78 11.8 11.7 10.8 0.8 0.7 0.6 13.6 13.9 12.5 7% 6% 6% 3.2% 3.1% 3.5% Median 7.9 7.8 7.4 0.8 0.6 0.5 12.8 13.5 12.0 9% 8% 8% 2.8% 2.7% 3.0% Source: mBank for Polish companies, Bloomberg for foreign firms and companies marked with an asterisk

List of abbreviations and ratios contained in the report: EV – net debt + market value (EV – economic value) EBIT – Earnings Before Interest and Taxes EBITDA – EBIT + Depreciation and Amortisation PBA – Profit on Banking Activity P/CE – price to earnings with amortisation MC/S – market capitalisation to sales EBIT/EV – operating profit to economic value P/E – (Price/Earnings) – price divided by annual net profit per share ROE – (Return on Equity) – annual net profit divided by average equity P/BV – (Price/Book Value) – price divided by book value per share Net debt – credits + debt papers + interest bearing loans – cash and cash equivalents EBITDA margin – EBITDA/Sales

OVERWEIGHT (OW) – a rating which indicates that we expect a stock to outperform the broad market NEUTRAL (N) – a rating which indicates that we expect the stock to perform in line with the broad market UNDERWEIGHT (UW) – a rating which indicates that we expect the stock to underperform the broad market

Recommendations of Biuro maklerskie mBanku: A recommendation is valid for a period of 9 months, unless a subsequent recommendation is issued within this period. Expected returns from individual recommendations are as follows: BUY – we expect that the rate of return from an investment will be at least 15% ACCUMULATE – we expect that the rate of return from an investment will range from 5% to 15% HOLD – we expect that the rate of return from an investment will range from -5% to +5% REDUCE – we expect that the rate of return from an investment will range from -5% to -15% SELL – we expect that an investment will bear a loss greater than 15% Recommendations are updated at least once every nine months. mBank S.A. with its registered office in Warsaw at Senatorska 18 renders brokerage services in the form of derived organisational unit – Brokerage Office which uses name Biuro maklerskie mBanku. mBank S.A. as part of the Exchange's Analytical Coverage Support Programme (“Programme”, https://www.gpw.pl/eacsp) prepares analytical reports for the following companies: Cognor Holding, Comarch, VRG. These documents are prepared at the request of Giełda Papierów Wartościowych w Warszawie S.A. (‘WSE’), which is entitled to copyrights to these materials. mBank S.A. receives remuneration from the WSE for the preparation of the reports. All documents prepared for the Programme are available at: https://www.mdm.pl/ui-pub/site/market_and_analysis/analysis_and_recommendations/analytical_coverage_support_programme

This document has been created and published by Biuro maklerskie mBanku. The present report expresses the knowledge as well as opinions of the authors on day the report was prepared. The opinions and estimates contained herein constitute our best judgment at this date and time, and are subject to change without notice. The present report was prepared with due care and attention, observing principles of methodological correctness and objectivity, on the basis of sources available to the public, which Biuro maklerskie mBanku considers reliable, including information published by issuers, shares of which are subject to recommendations. However, Biuro maklerskie mBanku, in no case, guarantees the accuracy and completeness of the report, in particular should sources on the basis of which the report was prepared prove to be inaccurate, incomplete or not fully consistent with the facts. mBank S.A. bears no responsibility for investment decisions taken on the basis of the present report or for any damages incurred as a result of investment decisions taken on the basis of the present report.

This document does not constitute an offer or invitation to subscribe for or purchase any financial instruments and neither this document nor anything contained herein shall form the basis of any contract or commitment whatsoever. It is being furnished to you solely for your information and may not be reproduced or redistributed to any other person This document does not constitute investment, legal, accounting or other advice, and mBank is not liable for damages resulting from or related to the use of data provided in the documents. This document may not be copied, duplicated and/or be directly or indirectly distributed in the United States, Canada, Australia or Japan, nor transferred to citizens or residents of a state where its distribution may be legally restricted, which does not limit the possibility of publishing materials prepared for the Programme on Cognor Holding, Comarch, VRG, mBank or WSE websites. Persons who disseminate this document should be aware of the need to comply with such restrictions.

Recommendations are based on essential data from the entire history of a company being the subject of a recommendation, with particular emphasis on the period since the previous recommendation. Investing in shares is connected with a number of risks including, but not limited to, the macroeconomic situation of the country, changes in legal regulations as well as changes on commodity markets. Full elimination of these risks is virtually impossible.

Recommendations are based on essential data from the entire history of a company being the subject of a recommendation, with particular emphasis on the period since the previous recommendation.

Investing in shares is connected with a number of risks including, but not limited to, the macroeconomic situation of the country, changes in legal regulations as well as changes on commodity markets. Full elimination of these risks is virtually impossible. mBank S.A. bears no responsibility for investment decisions taken on the basis of the present report or for any damages incurred as a result of investment decisions taken on the basis of the present report.

It is possible that mBank S.A. in its brokerage activity renders, will render or in the past has rendered services for companies and other entities mentioned in the present report. mBank S.A. does not rule out offering brokerage services to an issuer of securities being the subject of a recommendation. Information about any conflicts of interest that may arise in connection with the issuance of recommendations (should such a conflict exist) is provided below, and it is valid as of the date of the most recent Monthly Report published by Biuro maklerskie mBanku or as of the date of the most recent recommendation issued for an Issuer, as applicable.

This document was not transferred to the issuers prior to its publication. mBank S.A. may have received compensation from the following companies in the last 12 months: Alchemia, Alior Bank, Ambra, Amica, Bank Handlowy, Bank Millennium, Bank Pekao, BGŻ BNP Paribas, Boryszew, Capital Park, CD Projekt, Centrum Nowoczesnych Technologii, Ceramika Nowa Gala, CI Games, Echo Investment, Elemental Holding, Elzab, Enea, Energoaparatura, Erbud, Ergis, Erste Bank, Ferrum, GetBack, Getin Holding, Getin Noble Bank, Globalworth Poland, GPW, Groclin, Helio SA, i2 Development, INDATA, ING BSK, Kruk, LW Bogdanka, MCI Capital, Mennica Polska, Mostostal Warszawa, Netia, Neuca, NWAI Dom Maklerski, Oponeo.pl, OTP Bank, PA Nova, PBKM, Pfleiderer Group, PGNiG, PKO BP, Polimex-Mostostal, Polnord, Polwax, Poznańska Korporacja Budowlana PEKABEX, Primetech, Prochem, Projprzem, PZU, Raiffeisen Bank International, Rawlplug, Rubicon Partners NFI, Santander Bank Polska, Seco/Warwick, Skarbiec Holding, Solar Company, Sygnity, Tarczyński, Ten Square Games, TIM, Trakcja, Unibep, Vistal Gdynia, Wittchen, Work Service, YOLO, Zastal, ZUE.

In the last 12 months mBank S.A. has acted as dealer-manager for tender or exchange offers for the shares of: Centrum Nowoczesnych Technologii, Ceramika Nowa Gala, CI Games, Ergis, Globalworth Poland, Helio SA, MCI Capital, Mostostal Warszawa, NWAI Dom Maklerski, Pfleiderer Group, Primetech.

Asseco Poland provides IT services to mBank S.A. mBank S.A. has a cash service agreement in place with Pekao and a phone subscription agreement in place with Orange Polska S.A. mBank S.A., its shareholders and employees may hold long or short positions in the issuers’ shares or other financial instruments related to the issuers’ shares. mBank, its affiliates and/or clients may conduct or may have conducted transactions for their own account or for account of another with respect to the financial instruments mentioned in this report or related investments before the recipient has received this report.

Copying or publishing the present report, in full or in part, or disseminating in any way information contained in the present report requires the prior written agreement of mBank S.A. Recommendations are addressed to all Clients of Biuro maklerskie mBanku.

Recommendations are addressed to all Clients of Biuro maklerskie mBanku.

All investment recommendations and strategies issued by mBank S.A. over the last 12 months are available at: http://www.mdm.pl/ui-pub/site/market_and_analysis/analysis_and_recommendations/fundamental_analysis/recommendations?recent_filter_active=true&lang=en

The activity of mBank S.A. is subject to the supervision of the Polish Financial Supervision Commission.

Individuals who did not participate in the preparation of recommendations, but had or could have had access to recommendations prior to their publication, are employees of Biuro maklerskie mBanku authorised to access the premises in which recommendations are prepared and/or individuals having to access to recommendations based on their corporate roles, other than the analysts mentioned as the authors of the present recommendations.

This publication constitutes investment research within the meaning of Art. 36.1 of Commission Delegated Regulation (EU) 2017/565.

The compensation of the research analysts responsible for preparing investment research is determined independently of and without regard to the compensation of or revenue generated by any other employee of the Bank, including but not limited to any employee whose business interests may reasonably be considered to conflict with the interests of the persons to whom the investment research prepared by the Research Department of Biuro maklerskie mBanku is disseminated. With that being said, since one of the factors taken into consideration when determining the compensation of research analysts is the degree of fulfillment of annual financial targets by customer service functions, there is a risk that the adequacy of compensation offered to persons preparing investment research will be questioned by a competent oversight body.

For U.S. persons only: This research report is a product of mBank SA which is the employer of the research analyst(s) who has prepared the research report. The research analyst(s) preparing the research report is/are resident outside the United States (U.S.) and are not associated persons of any U.S. regulated broker-dealer and therefore the analyst(s) is/are not subject to supervision by a U.S. broker-dealer, and is/are not required to satisfy the regulatory licensing requirements of FINRA or required to otherwise comply with U.S. rules or regulations regarding, among other things, communications with a subject company, public appearances and trading securities held by a research analyst account. This report is intended for distribution by mBank SA only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the U.S. Securities and Exchange Act, 1934 (the Exchange Act) and interpretations thereof by U.S. Securities and Exchange Commission (SEC) in reliance on Rule 15a 6(a)(2). If the recipient of this report is not a Major Institutional Investor as specified above, then it should not act upon this report and return the same to the sender. Further, this report may not be copied, duplicated and/or transmitted onward to any U.S. person, which is not the Major Institutional Investor. In reliance on the exemption from registration provided by Rule 15a-6 of the Exchange Act and interpretations thereof by the SEC in order to conduct certain business with Major Institutional Investors, mBank SA has entered into an agreement with a U.S. registered broker-dealer, Cabrera Capital Markets. ("Cabrera"). Transactions in securities discussed in this research report should be effected through Cabrera or another U.S. registered broker dealer.

Strong and weak points of valuation methods used in recommendations: DCF – acknowledged as the most methodologically correct method of valuation; it consists in discounting financial flows generated by a company; its weak point is the significant susceptibility to a change of forecast assumptions in the model. Relative – based on a comparison of valuation multipliers of companies from a given sector; simple in construction, reflects the current state of the market better than DCF; weak points include substantial variability (fluctuations together with market indices) as well as difficulty in the selection of the group of comparable companies. Economic profits – discounting of future economic profits; the weak point is high sensitivity to changes in the assumptions made in the valuation model. Discounted Dividends (DDM) – discounting of future dividends; the weak point is high sensitivity to changes in the assumptions as to future dividends made in the valuation model. NAV - valuation based on equity value, one of the most frequently used method in case of developing companies; the weak point of the method is that it does not factor in future changes in revenue/profits of a company.

mBank S.A. Senatorska 18 00-950 Warszawa http://www.mbank.pl/

Research Department

Kamil Kliszcz Michał Marczak Michał Konarski director +48 22 438 24 01 +48 22 438 24 05 +48 22 438 24 02 [email protected] [email protected] [email protected] strategy banks, financials energy, power generation

Jakub Szkopek Paweł Szpigiel Piotr Bogusz +48 22 438 24 03 +48 22 438 24 06 +48 22 438 24 08 [email protected] [email protected] [email protected] industrials, chemicals, metals media, IT, telco retail, gaming

Aleksandra Szklarczyk Piotr Poniatowski Mikołaj Lemańczyk +48 22 438 24 04 +48 22 438 24 09 +48 22 438 24 07 [email protected] [email protected] [email protected] construction, real-estate development industrials financials

Sales and Trading

Traders

Piotr Gawron Krzysztof Bodek Tomasz Jakubiec director +48 22 697 48 89 +48 22 697 47 31 +48 22 697 48 95 [email protected] [email protected] [email protected]

Adam Prokop Magdalena Bernacik Andrzej Sychowski +48 22 697 47 90 +48 22 697 47 35 +48 22 697 48 46 [email protected] [email protected] [email protected]

Sales, Foreign Markets

Bartosz Orzechowski Jędrzej Łukomski +48 22 697 48 47 +48 22 697 49 85 [email protected] [email protected]

Private Client Sales

Kamil Szymański Jarosław Banasiak director deputy director +48 22 697 47 06 +48 22 697 48 70 [email protected] [email protected]