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1. Company Snapshot

1.a. Company Description

PGE Polska Grupa Energetyczna S.A. engages in the production, transmission, and distribution of electricity in Poland.The company operates through seven segments: Conventional Generation, District Heating, Renewables, Supply, Distribution, Circular Economy, and Other Operations.It generates electricity from lignite, hard coal, natural gas, and biomass, as well as renewable energy sources, such as wind, photovoltaic, and hydro.


The company operates 5 conventional power plants; 16 CHP plants; 2 lignite mines; 17 wind farms; 5 photovoltaic power plants; 29 run-of-river hydro power plants; and 4 pumped-storage power plants, including 2 with natural flow.It produces, transmits, and distributes heat; sells and purchases electricity and gas on wholesale market; trades in emission certificates; and purchases and sells fuels, as well as sells electricity and provides services to end users.The company supplies power to approximately 5 million households, businesses, and institutions.


The company was founded in 1990 and is based in Warsaw, Poland.

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1.b. Last Insights on PGE

PGE Polska Grupa Energetyczna S.A. faces headwinds from rising costs and regulatory pressures. The recent acquisition of RWE's F.E.W. Baltic II offshore wind development project may pose integration challenges. Furthermore, the transaction's completion, forecasted for Q1 2026, may divert resources, potentially straining the company's financials. Elevated expenses and potential project delays could hinder profitability, exacerbating existing concerns about the company's operational efficiency.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Ørsted, PGE complete first phase of seabed preparation for Baltica 2

Feb -18

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Portland General Electric Company Q4 2025 Earnings Call Summary

Feb -18

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PGE in $1.9B deal to buy PacifiCorp’s Washington utility operations

Feb -18

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PacifiCorp to divest Washington assets to PGE for $1.9bn

Feb -17

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Portland General Electric announces acquisition of Washington state utility operations and select assets from PacifiCorp, 2025 financial results and initiates 2026 earnings guidance

Feb -17

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Avangrid Achieves Commercial Operation at Two Solar Projects in Oregon

Feb -03

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RWE to sell F.E.W. Baltic II wind project to PGE

Dec -19

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RWE to sell Polish offshore wind development project to PGE

Dec -19

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.96%)

6. Segments

Conventional Energy

Expected Growth: 4.83%

PGE Polska Grupa Energetyczna S.A.'s 4.83% growth in Conventional Energy is driven by increasing electricity demand, favorable regulatory environment, and investments in modernization of power plants. Additionally, the company's focus on cost optimization and efficiency improvements also contribute to the growth.

Supply

Expected Growth: 5.0%

PGE Polska Grupa Energetyczna S.A.'s 5.0% growth is driven by increasing electricity demand from industrial and residential sectors, supported by Poland's economic growth and urbanization. Additionally, investments in renewable energy sources, such as wind and solar power, contribute to the growth. Furthermore, PGE's efforts to improve operational efficiency and reduce costs also support the growth.

Distribution

Expected Growth: 4.83%

PGE Polska Grupa Energetyczna S.A.'s 4.83% growth is driven by increasing electricity demand, favorable regulatory environment, and strategic investments in renewable energy sources. Additionally, the company's focus on grid modernization and cost optimization efforts contribute to its growth momentum.

District Heating

Expected Growth: 4.83%

The 4.83% growth in District Heating from PGE Polska Grupa Energetyczna S.A. is driven by increasing demand for reliable and efficient heating solutions, government incentives for renewable energy, and investments in infrastructure upgrades, as well as growing urbanization and industrialization in Poland.

Railway Energy

Expected Growth: 4.83%

Railway Energy from PGE Polska Grupa Energetyczna S.A. growth of 4.83% driven by increasing electrification of railways, rising demand for energy-efficient transportation, and government initiatives promoting sustainable infrastructure development.

Renewables

Expected Growth: 8.23%

PGE Polska Grupa Energetyczna S.A.'s 8.23% growth in renewables is driven by increasing demand for clean energy, Polish government's support for renewable energy sources, and declining costs of wind and solar power generation. Additionally, PGE's strategic investments in onshore wind farms and solar parks, as well as its commitment to reducing carbon emissions, contribute to this growth.

Circular Economy

Expected Growth: 9.27%

PGE Polska Grupa Energetyczna S.A.'s 9.27% growth in Circular Economy is driven by increasing adoption of renewable energy sources, energy efficiency measures, and waste reduction initiatives. Additionally, government incentives and regulations promoting sustainable practices, as well as growing consumer demand for eco-friendly products and services, contribute to this growth.

Other

Expected Growth: 4.83%

PGE Polska Grupa Energetyczna S.A.'s 4.83% growth is driven by increasing electricity demand, favorable regulatory environment, and investments in renewable energy sources. Additionally, the company's efforts to improve operational efficiency, reduce costs, and expand its customer base also contribute to its growth.

Adjustments

Expected Growth: 4.83%

PGE Polska Grupa Energetyczna S.A.'s 4.83% growth is driven by increasing electricity demand, favorable regulatory environment, and strategic investments in renewable energy sources. Additionally, the company's focus on cost optimization and operational efficiency has contributed to its growth.

7. Detailed Products

Electricity Distribution

PGE Polska Grupa Energetyczna S.A. distributes electricity to households, businesses, and industries across Poland.

Heat and Cooling

PGE provides heat and cooling solutions to industrial and commercial customers, ensuring a stable and efficient energy supply.

Renewable Energy

PGE invests in renewable energy sources, such as wind farms and solar parks, to generate clean and sustainable energy.

Energy Trading

PGE engages in energy trading, buying and selling electricity, natural gas, and other energy commodities on the wholesale market.

Energy Efficiency Solutions

PGE offers energy-efficient solutions, including energy audits, energy management systems, and energy-saving technologies.

Electric Vehicle Charging Infrastructure

PGE develops and operates electric vehicle charging infrastructure, supporting the growth of e-mobility in Poland.

8. PGE Polska Grupa Energetyczna S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for PGE Polska Grupa Energetyczna S.A. is medium due to the presence of alternative energy sources such as renewable energy and energy-efficient technologies.

Bargaining Power Of Customers

The bargaining power of customers for PGE Polska Grupa Energetyczna S.A. is low due to the lack of alternative energy suppliers and the company's dominant market position.

Bargaining Power Of Suppliers

The bargaining power of suppliers for PGE Polska Grupa Energetyczna S.A. is medium due to the presence of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants for PGE Polska Grupa Energetyczna S.A. is low due to the high barriers to entry in the energy market, including regulatory hurdles and high capital requirements.

Intensity Of Rivalry

The intensity of rivalry for PGE Polska Grupa Energetyczna S.A. is high due to the presence of multiple competitors in the energy market, leading to intense competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 22.40%
Debt Cost 6.73%
Equity Weight 77.60%
Equity Cost 10.13%
WACC 9.37%
Leverage 28.86%

11. Quality Control: PGE Polska Grupa Energetyczna S.A. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 5.7/10

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A-Score: 5.4/10

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Yield: 8.1

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Yield: 3.1

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PGE Polska Grupa Energetyczna

A-Score: 4.6/10

Value: 9.8

Growth: 3.8

Quality: 2.3

Yield: 0.0

Momentum: 8.5

Volatility: 3.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

10.31$

Current Price

10.31$

Potential

-0.00%

Expected Cash-Flows