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: MT0000580101

Anlass der Studie: Research study (Anno)
Empfehlung: BUY
Kursziel: 5.75 EUR
Letzte Ratingänderung: 
Analyst: Marcel Goldmann, Cosmin Filker

2021 financial year with significant revenue and earnings increases
completed; Significant increase in revenue and earnings also expected for
the current financial year 2022; The successful growth strategy and the
very scalable business model should lead to a disproportionately earnings
development; Target price: EUR 5.75 (previously: EUR 9.40); Rating: BUY
According to published business figures, Media and Games Invest SE (MGI)
achieved a new record in the past financial year 2021 with growth of around
80.0% to EUR 252.17 million (PY: EUR 140.22 million). The strong growth in
the fourth quarter in particular contributed to their high revenue growth
(Q4 2021: EUR 80.2 million vs. revenue Q4 2020: EUR 48.70 million), which
was also the strongest quarter in terms of revenue and earnings in the
company's history to date. The main growth driver has been the advertising
software platform business on the supply side which, in recent years, has
built up a strong SDK base with direct integration in over 20,000 apps,
many of which come from the premium sector and have a large reach, enabling
MGI to reach more than two billion mobile end users, according to its own
figures. Accordingly, MGI is now one of the top five providers in the
mobile advertising market when it comes to reach and is also the leading
provider when it comes to traffic quality, according to Pixalate's Mobile
Seller Trust Index. This exceeded the company's guidance (revenue of EUR
234.0 million to EUR 254.0 million) and also our revenue estimate (GBCe:
EUR 234.15 million).
Even stronger growth was achieved at the earnings level. Compared to the
previous year, EBITDA grew very dynamically by around 145.0% to EUR 65.04
million (previous year: EUR 26.55 million). EBITDA, adjusted for one-off
effects (e.g. special and restructuring costs from M&As), increased by
144.3% to EUR 71.10 million (previous year: EUR 29.55 million). This means
that the company's earnings guidance (adjusted EBITDA: EUR 65.0 million to
EUR 70.0 million) and also our earnings estimate (adjusted EBITDA: EUR
65.71 million) were also exceeded.
MGI also expects to continue its dynamic growth course in the current
financial year 2022. Thus, despite the macroeconomic trends, management
expects to significantly increase revenue in a range of EUR 295.0 million
to EUR 315.0 million. At the earnings level, adjusted EBITDA (Adj. EBITDA)
of between EUR 83.0 million and EUR 93.0 million should be achieved.
In our last research report on the MGI Q1 figures, we confirmed our
previously raised revenue and earnings forecasts due to the strong first
quarter, the promising growth strategy and the unchanged outlook. For the
current financial year 2022, we continue to expect revenues of EUR 307.22
million and EBITDA of EUR 87.52 million. For the following financial years
2023 and 2024, we are conservatively adjusting our previous estimates
downwards due to the current recessionary trends and the latest news from
the advertising market. We now expect revenues of EUR 345.11 million
(previously: EUR 377.76 million) and EUR 402.55 million (previously: EUR
473.08 million). With regard to EBITDA, we expect EUR 96.05 million
(previously: EUR 116.94 million) and EUR 115.80 million (previously: EUR
147.33 million).
Overall, MGI's good market position should enable it to continue to grow
very dynamically and highly profitably as an ad tech platform with its own
games content. While the 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 is to be significantly strengthened in the
future. With the recently acquired Contextual Mobile Demand Side Platform
'Dataseat', the company has acquired an important building block for this.
As a result of the acquisition, the management would like to concentrate on
organic growth for the time being, but does not completely rule out further
acquisitions if the right opportunities arise. Due to the high scalability
of the business model and the expected efficiency gains tob e achieved
through the close interlinking of the business areas, the group's
profitability should remain at a high level in the future.
In addition, MGI is very well positioned with a liquidity estimated by us
at the end of H1 2022 of around EUR 130 million (including credit lines)
after the last earn-out payments for KingsIsle and can thus both seize
investment opportunities and comfortably cushion a possible recession. The
leverage ratio, which we estimate to be around 3.5x due to the cash-out in
Q2 2022, should also fall to below 3.0 in the medium term due to the
positive cash flow and expected EBITDA growth. In our view, the market
should have already priced in the debt, so we see a potential catalyst in a
possible reduction in the leverage ratio in the coming 12 months.
Within the framework of our DCF valuation model, we have lowered our target
price to EUR 5.75 (previously: EUR 9.40) per share due to our reduced
forecasts for the 2023 and 2024 financial years and the associated lower
starting point for the subsequent estimation periods. Higher capital costs
(increase in the risk-free interest rate to 1.25% instead of 0.40%) have
also had the effect of reducing the price target. The so-called 'roll-over
effect' (price target related to the following financial year 2023 instead
of 2022) counteracted an even stronger price target reduction. In view of
the current share price level, we continue to issue a 'buy' rating and see
significant upside potential. The results of our peer group analysis (see
p. 18) also support our assessment of the attractiveness and price
potential of the MGI share.

Die vollständige Analyse können Sie hier downloaden:

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Date (time) of completion: 01/08/2022 (12:42)
Date (time) of first distribution: 02/08/2022 (10:30)

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