Original-Research: Media and Games Invest SE - von GBC AG

Einstufung von GBC AG zu Media and Games Invest SE

Unternehmen: Media and Games Invest SE
ISIN: SE0018538068

Anlass der Studie: Research study (Anno) Empfehlung: BUY
Kursziel: 5.30 EUR
Letzte Ratingänderung:
Analyst: Marcel Goldmann, Cosmin Filker

Financial year 2022 closed with a significant improvement in revenue and operating profit; A continuation of the profitable growth course is expected for 2023; The expansion of the ad tech platform business should lead to significant revenue and earnings growth in the future; Target price: € 5.30 (previously: € 5.40); Rating: BUY  
Based on the published business figures, Media and Games Invest SE (MGI) continued its dynamic growth course in the past financial year 2022 with a significant increase in turnover of 28.7% to € 324.44 million (PY: € 252.17 million) despite difficult general conditions and market situation. Their digital programmatic advertising software platform business again proved to be their main growth driver. In this high-growth area, the increase in their software customer base to 551 customers (end of 2021: 418) significantly increased their business volume. The strong business growth achieved is also reflected in MGI's leading market position. According to a market study (Pixalate's Mobile SSP Report), MGI's Verve Group is the market leader in mobile programmatic advertising for Android in North America with a 12% share. This exceeded the company's guidance at the upper end of the target range (revenue of € 315.0m to € 325.0m) and also our revenue estimate (GBCe: € 307.22m).
 
Parallel to the positive development of turnover, significant increases were achieved at the operating result level. Compared to the previous year, EBITDA grew significantly by 30.3% to € 84.75 million. Adjusted for one-off effects (e.g. special and restructuring costs from M&As), EBITDA (Adj. EBITDA) also grew rapidly with a dynamic increase of 31.1% to € 93.20 million. Accordingly, the company’s earnings guidance (Adj. EBITDA: € 83.0 million to € 93.0 million) and also our earnings estimate (Adj. EBITDA: € 91.72 million) were exceeded.
 
MGI's management is also positive about the current 2023 financial year and expects to continue on its growth path. Specifically, the technology company expects a renewed increase in sales revenues in a range of € 335.0 million to € 345.0 million. At the earnings level, an adjusted EBITDA of between € 95.0 million and € 105.0 million is to be achieved.  
As part of the publication of our research study on the preliminary annual results of MGI's 2022 financial year, we have slightly reduced our previous revenue and earnings forecasts for the current 2023 financial year for conservative reasons. For the following year, we have left our previous operating estimates unchanged. In view of the satisfactory Q1 performance, the positive corporate outlook and the reaffirmation of the medium-term guidance (revenue CAGR 25.0%-30.0%, EBITDA CAGR 25.0%-30.0%), we confirm our previous revenue and earnings forecasts for the current financial year and subsequent years. For 2022, we continue to expect revenues of € 340.12 million and EBITDA of € 89.44 million. For 2024 and 2025, we continue to expect revenues (EBITDA) of € 402.55 million (€ 115.80 million) and € 471.39 million (€ 136.14 million), respectively.  
Overall, the MGI Group, with its good market positioning and fully-integrated programmatic ad tech platform with its own games content, should succeed in continuing its dynamic growth course in the future. While the technology company has built up a strong position on the supply side in recent years, with a strong SDK base in the premium mobile app sector, the demand side in particular should be the focus of targeted growth in the future and be further expanded. The Contextual Mobile Demand Side Platform 'Dataseat', which was acquired in 2022, was an important building block of MGI's growth strategy and has additionally strengthened the Demand Side and also underlines their growth ambitions in this business area.  
In addition, with liquidity of around € 130.0 million at the end of the first quarter of 2023, MGI continues to be in a good financial position and can thus take advantage of investment opportunities as well as being able to comfortably cushion recessionary macroeconomic situations. The gearing ratio, which was at a good level of 3.0x at the end of the last quarter, should also improve further in the short and medium term due to their positive cash flow and their expected EBITDA growth.  
Based on our confirmed forecasts for the current financial year 2023 and the following years and the changed cost of capital (WACC), we have slightly lowered our previous price target to € 5.30 (previously: € 5.40). Our price target reduction is the result of higher capital costs (increase in the risk-free interest rate to 2.0% instead of the previous 1.5%). As a consequence of the unchanged high inflation, we have raised the terminal value growth rate to 2.5% (previously: 2.0%), which has had the effect of raising the target price. In view of the current share price level, we thus continue to assign a 'Buy' rating and see significant upside potential. The results of our peer group analysis (see p. 21) also support our assessment of the attractiveness and price potential of the MGI share.  

Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/27233.pdf

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Date (time) of completion: 20/06/2023 (8:43 am) Date (time) of first distribution: 20/06/2023 (10:30 am)

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