Report

Update on SARE S.A. after 9M/16 results

Despite model adjustments, our 12-months PT (80% DCF, 20% peer-group-based fair value) for SARE of PLN 28.10 and the BUY rating remain unchanged. As the 9M/16 results showed stronger top-line growth but higher shares of deprecation and personnel expenses than we had expected, we have increased our sales forecasts and lowered the margin estimates for 2016. This also affects our forecasts for the following years. In our view, SARE remains an interesting investment opportunity due to its cash-generating business model, which should allow it to pay out attractive dividends in the long run. As main risk factors, we see strong competition and foreign expansion. SARE’s German subsidiary has so far not generated any revenues and reported a net loss of PLN 71k for 9M/16. However, although the German market is challenging, we believe that it will likely sign first contracts with clients in H1/17E.​

Underlying
Digitree Group SA

Sare SA. Sare SA is a Poland-based holding company engaged in the digital marketing industry. The Sare Group provides software solutions, as well as e-marketing services and sales support in the domestic market and internationally. It organizes activities into five segments, based on the operations of the Group companies. SARE offers tools for implementing integrated and targeted communication via e-mail and mobile channels. INIS and mr Target specialize in e-mail marketing campaigns. Salelifter is engaged in database building and lead generation. Sales Intelligence provides marketing tools and software for the e-commerce market. VideoTarget provides solutions in the area of video advertising. In addition, the Company operates a call center and an online news agency.

Provider
East Value Research
East Value Research

​We are a leading, management-owned research boutique with a focus on companies from Emerging Europe. Our role is that of an intermediary between companies on the one hand and investors on the other. Our research products are directly distributed to more than 200 mutual and pension funds, family offices and independent asset managers from Central and Eastern Europe, the German-speaking region, Scandinavia, France and UK. In addition, we publish our reports on platforms such as Bloomberg, Thomson Reuters, Capital IQ and PAP, thus ensuring that they are available to institutions from around the world. By organising roadshows and conferences, we provide investors with direct access to corporate decision makers. Our team consists of professionals with long capital market experience in both Western Europe and the CEE region.

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