AB - Financial forecast; the price war finally over?
Not only is AB among the leading IT hardware distributors in Poland, it is the largest IT hardware distributor in the Czech Republic as well as the significant player on the Slovakian market (following the acquisition of AT Computers Holding). After a 5% yoy net profit decline in 2018/19E deriving from the price war on the market led by Also determined to increase its market share in Poland we expect a recovery of the Company’s profits momentum in 2019/20E stemming from: (i) the low base of 2018/19 earnings, (ii) the end of the price war after the successfully completed tender on ABC Data conducted by Also, (iii) slight operating leverage positive effect deriving from a further growth of revenues (PLN 9 billion expected next year).
After an upward revision of our forecasts for AB resulting in the maintenance of a high double-digit upside towards our 12M EFV for AB and awaited earnings momentum improvement in the next quarters we keep our LT Buy fundamental recommendation for the Company’s equities intact. AB is currently trading at undemanding 2019E multiples of P/E and EV/EBITDA at c. 4.5x and c. 5.6x, respectively with c. 46% and 16% discount to the peer group, respectively. Expecting flattish yoy EPS in 4Q18/19E on the one hand, and continued PLN 15 million share buyback on the other, we maintain our ST Neutral market-relative stance towards AB’s shares.
AB Spolika Akcyjna is adistributor of IT and consumer electronics in the region of Central and Eastern Europe. Co. operating mainly in Poland, the Czech Republic and Slovakia is a strategic distribution partner for most of the world's manufacturers of new technologies, selling their products to more than 16 thousand business partners. Co.'s regular offer includes above 70 thousand products of more than seven hundred brands from all over the world. The business of Co. is split into: wholesale trade in computer, telecommunications, multimedia and electronic equipment; retail trade in computer hardware; and personal computer manufacturing.
BOS Brokerage, with over 20-year experience, offers brokerage services on the Polish capital market to satisfy numerous needs of institutional and retail investors.
Our comprehensive offer includes brokerage services on both the stock exchange and the forex market as well as brokerage services on the energy market, debt and equity issues, distribution of investment funds and assets management.
BOS Brokerage analytical team belongs to the most appreciated and acclaimed on the market. According to Parkiet daily’s poll (as of January 7, 2019), DM BOŚ equity research team was selected by institutional investors as the third best in Poland. Moreover, the team members won several individual best analysts awards, including Sobiesław Pająk – IT (best analyst), media/telco (ranked 2.), strategy (ranked 4.), Tomasz Rodak – video games (best analyst), overall ranked 5., Łukasz Prokopiuk – chemicals (ranked 2.), mining (ranked 3.), Maciej Wewiórski – real estate (ranked 3.).
In August 2017 Parkiet daily indicated DM BOŚ recommendations as the most accurate over 12 months and according to the Puls Biznesu daily (as of April 11, 2017) DM BOŚ research team was the most prolific on the Polish market and issued the biggest number of recommendations (247) in the years 2014-2016.
The analysts handle over 80 companies listed on the Warsaw Stock Exchange.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.