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

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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: 6.92 EUR
Letzte Ratingänderung:
Analyst: Marcel Goldmann, Cosmin Filker

Record financial year 2020 concluded with strong profitable growth in
turnover; Another significant increase in turnover and earnings expected
for the current financial year 2021; The growth course we have embarked
upon should lead to a disproportionately high increase in earnings as a
result of economies of scale; Target price: EUR 6.92; Rating: BUY

Media and Games Invest SE closed the 2020 financial year with significant
increases in turnover and earnings compared to the previous year. With a
67.1% increase in revenue to EUR 140.22 million (PY: EUR 83.89 million),
the company continued its dynamic growth course. The high growth rate was
primarily due to a fast-growing fourth quarter (revenue Q4 2019: EUR 28.17
million vs. revenue Q4 2020: EUR 48.69 million), which was the strongest in
terms of revenue and earnings in the company's history to date, but was
again exceeded in Q1 2021.

The significant increase in group revenue was primarily driven by the games
business segment. In this segment, the company achieved a jump in turnover
of 74.5% to EUR 75.20 million (PY: EUR 43.10 million). In addition to
positive effects from the 'Corona stay-at-home policy', game updates and
expansions as well as M&A measures also contributed to this positive
development.

In addition, the Media segment also made a significant contribution to the
increase in Group turnover with a significant increase in turnover of 59.3%
to EUR 65.0 million (PY: EUR 40.80 million). In addition to revenue
increases stemming from organic growth, this business segment also
benefited from positive effects from completed M&A measures (e.g.
acquisition of the main assets of Verve Wireless). In our opinion, the
organic growth of this business unit was particularly boosted by the fact
that the customer focus was very much on customers from the high-growth
games and e-commerce sector.

On an EBITDA basis, an increase of around 71.0% to EUR 26.55 million (PY:
EUR 15.54 million) was achieved in the past financial year. EBITDA adjusted
for one-off effects (e.g. special and restructuring costs from M&A
transactions) increased by 60.8% to EUR 29.10 million (PY: EUR 18.10
million) compared to the previous year. A dynamic increase of more than
100.0% to EUR 2.71 million (PY: EUR 1.25 million) was also recorded at the
net level.

In our last research study, we already included the figures for the first
quarter of 2021 and adjusted our previous revenue and earnings forecasts
upwards accordingly. The background to our forecast increase was the good
performance at the start of the year (Q1 revenue 2021: EUR 51.93 million
vs. Q1 revenue 2020: EUR 26.55 million), the company's particularly
extensive growth pipeline and the expected strong recovery of the
advertising market.

For the current financial year 2021, we expect consolidated revenues of EUR
202.30 million and an EBITDA of EUR 52.81 million. The majority of these
revenues should be generated in the games segment (GBCe: EUR 109.72
million). In addition, the business development of this segment should be
significantly boosted by the acquisition of KingsIsle at the beginning of
the year.

With regard to the media segment, we are calculating turnover of EUR 92.58
million for the current business year. This segment has been significantly
expanded in the past and strengthened by several M&A transactions (most
recently with the acquisition of the essential assets of Beemray Oy). As a
result of the fact that this business segment has been brought into a good
market position through various strategic measures of the MGI Group, it
should also be possible to significantly increase the sales revenues in
this segment in the current financial year. In addition, the Media segment
should also be able to profit from the expected recovery of the advertising
market.

We also expect the company's successful growth strategy to continue in the
coming years and accordingly anticipate significant revenue and earnings
growth in both the Games and Media divisions. Accordingly, we expect
revenues of EUR 255.10 million and EBITDA of EUR 69.90 million for the
coming financial year 2022. In the following year 2023, revenue and EBITDA
should increase again to EUR 319.39 million and EUR 92.94 million,
respectively. On a net level, we also expect significant earnings growth in
the current and coming financial years. For the current financial period,
we expect a net result (after minorities) of EUR 12.27 million. In the
following years 2022 and 2023, this should increase further to EUR 23.65
million and EUR 39.99 million respectively.

Overall, we are convinced that the MGI Group will be able to continue its
dynamic growth course in the future due to its strong market position in
both high-growth business segments (games and digital media). Due to the
company's platform-based business model and the associated high scalability
of the business, group profitability should also increase
disproportionately in the coming years. The company's high cash position
(end of March 2021: EUR 51.70 million) opens up additional growth and
earnings potential through targeted M&A transactions. MGI has a very strong
track record in this area and can look back on very many successful
transactions.

Within the framework of our DCF valuation model, we have determined a
target price of EUR 6.92 per share on the basis of the estimates we
previously raised in our Q1 research report. As we have not made any
changes to our previous study (as of May 11, 2021), we hereby confirm our
previous price target and rating. In view of the current share price level,
we thus continue to assign a Buy rating and see significant share price
potential. The results of our peer group analysis (see p. 20) also support
our assessment of the attractiveness and price potential of the share.

Die vollständige Analyse können Sie hier downloaden:
http://www.more-ir.de/d/22585.pdf

Kontakt für Rückfragen
GBC AG
Halderstrasse 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR. Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,5b,7,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter:
http://www.gbc-ag.de/de/Offenlegung
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Date (time) of completion: 15/06/2021 (8:27 am)
Date (time) of first distribution: 15/06/2021 (10:00 am)

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Quelle: dpa-AFX