Edison Investment Research - 4iG (4IG) 4iG - Executing at pace on its five-year plan

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Edison Investment Research

Richard Williamson

4iG - Executing at pace on its five-year plan

In FY20 and into H121, 4iG has continued to execute at pace, with a series of acquisitions that will transform the group once the acquisition of DIGI Group, a leading telecoms services provider, closes in Q321. 4iG’s strategy is focused on three pillars: IT services; telecoms & infrastructure; and space & defence. The group continues to scale in Hungary, with a target to become the market leader, but we also expect 4iG to develop a more diversified regional footprint in FY21 and FY22. On top of 39% revenue growth in FY20, we estimate 44% revenue growth in FY21, even before considering the contribution from DIGI Group (FY20 revenues HUF70bn, EBITDA HUF19bn). 4iG is fast growing, with a likely step-up in margins post DIGI Group, and offers an attractive dividend yield, yet trades on an FY21e P/E of 10.5x, a 40%+ discount to its peer group.

14/06/2021 17 EN

Underlying

4iG

4iG Nyrt, formerly Freesoft Szoftverfejleszto es Szamitatechnikai Szolgaltato Nyrt is a Hungary-based company engaged in providing software products and consultancy. The Company's activities include development and implementation of specific, custom-made software systems, document management, knowledge management, portal and collaboration applications, complex services for business needs in the areas of implementation, support and consultation, intranet- and Internet-based development, services, graphical and creative design, and consultation, design, development and implementation of mobile business applications, as well as operation, support, outsourcing, application service provision (ASP), application portfolio management (APM), hosting and other services. The Company has three subsidiaries: Axis Consuling 2000 Kft, BankSoft Kft and HUMANsoft Kft.

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HU0000071030 Hungary

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Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Richard Williamson

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4iG - Executing at pace on its five-year plan

4IG: 2 directors

The Rear-View Mirror – EME markets: Polish WIG20 and Hungarian BUX add 11.4% in May, on higher volumes

Games Workshop Group - A notable acceleration in Q225

Altron - Further margin expansion in H125

Sayona Mining - Catching up with majors

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