Business News Poland-week 15

Poland Eyes 212-billion-zloty Anti-coronavirus Crisis Package:

Poland plans to implement a 212 billion zloty (52-billion-dollar) package aimed at countering the adverse economic consequences of the coronavirus epidemic, Prime Minister Mateusz Morawiecki said on Wednesday.

The package will consist of wage subsidies, loan guarantees and liquidity supporting measures for firms, as well as new health care and investment spending. Poland wants to subsidies employee wages at distressed firms by up to 40 per cent of the average wage.

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Poland: Unclear Rules of Temporary Expiry of Lease Rights and Obligations at Retail Facilities of More Than 2,000 m2

The Polish draft law commonly referred to as the “Anti-Crisis Shield” (adopted by the Sejm last weekend) poses many questions in regard to lease relations between landlords and tenants at retail facilities of more than 2,000 m2. Firstly, due to its ambiguous wording, there are doubts whether it covers all retail facilities or only those offering retail space above 2,000 m2, and whether it covers all lease agreements in effect at such facilities or only those affected by the restrictions.

Also, the idea and the legal consequences of a “binding statement” to the effect that a tenant intends to extend their existing contract on the same terms and conditions are rather confusing. We may assume that the legislator’s intention was to give tenants a choice: decide whether they prefer (1) a “temporarily expiry” of lease rights and obligations during the trade ban for their simultaneous extension by a period of this ban, plus six additional months, or (2) if they want to pay the rent and the charges during the trade ban. If a given tenant choses option (1), it must submit the extension statement within three months from the date on which the trade ban has been lifted.

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Cowintech: COVID-19 to Accelerate Process Automation Investment

Cowintech’s process automation systems are essential for rechargeable battery production. We expect the Covid-19 outbreak to highlight the importance of investing in process automation. Despite earnings growth arising from increased investment by major domestic and overseas rechargeable battery makers this year, Cowintech is trading at a 2020E P/E of 6.1x, a level we view as being undervalued.

Cowintech produces process automation systems for rechargeable battery makers. By implementing Cowintech’s systems, battery makers are able to: 1) reduce their labor costs; and 2) improve their yields. Major domestic clients include LG Chem and Samsung SDI.

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