Asbis – 3Q19 results’ forecast
Asbis is an active player on the CEE IT market. The Company’s strategy is focused on both: the pure distribution of IT hardware and development of own brand products portfolio – Prestigio, Canyon, Perenio with a joint high single-digit share in the Company’s sales mix. The adoption of such a strategy allowed the Company to generate a much higher gross profit margin on sales than pure reselling. In 2018 the Company’s results improvement stemmed from the robust sale of Apple products in the former USSR countries. After an impressive 73% yoy EPS growth in 2018 – a highly demanding base – we forecast a 15% yoy decline in 2019 translating into net profit of US$ 10.1 million– i.e. in line with the higher band of the Company’s management FY19 guidance. With a strong double-digit upside towards our 12M EFV we keep our LT Buy fundamental recommendation for Asbis’s equities unchanged. We would like to stress that Asbis has been trading at undemanding low 2019E P/E and EV/EBITDA multiples of c. 3.2x and c. 3.1x, respectively – i.e. at c. 60%/55% discount towards the peer group. Eyeing the execution of the recently approved buyback program and expecting more than satisfactory quarterly posting we reiterate our ST Overweight market relative stance for Asbis’s equities.
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