OPAP | Growth, cash returns, tax-related “hidden value†– Buy
The tax conundrum: you asked, we reply – What is the tax-related “hidden value†and how might this materialize? We build on our previous note “Let’s talk about the tax†further elaborating on the tax issue, addressing the most common questions asked/raised by investors on the post-2020 gaming duty conundrum.We also provide granularity on several “Need-to-Know†matters, such as VLTs’ underlying (fully-ramped) performance, the scalable VLT gaming duty mechanism, OPAP’s right of first refusal on VLTs, the land-based monopoly risk post 2030, the estate attrition, agent commissions and the cost base. We also lay out our estimates of the overall Greek gaming market by segment, arguing that the crack-down on illegal activities will be the overriding factor for VLTs’ success.
We reiterate OPAP as one of our top picks, with our thesis underpinned by improving operating performance and a generous dividend policy.
OPAP is engaged in the operating and management of numerical lottery and sports betting games as well as lottery games. Co. holds concession to operate and manage new sports betting games in Greece as well as a right of first refusal to operate and manage any new lottery games permitted by the Hellenic Republic. Co. operates six numerical lottery games, including Joker, Lotto, Proto, Extra 5, Super 3, and Kino; and three sports betting games consisting of Stihima, Propo, and Propo-goal. Co. is also engaged in designing new lottery games, including Bingo and Super 4. Co. distributes its games through an extensive on-line network of agents.
Eurobank Equities is a Greek-based firm offering research, sales and trading services to institutional, corporate and private clients. The company is wholly owned by Eurobank, one of the 4 systemic banks in Greece.
Eurobank Equities S.A. offers a comprehensive suite of investment products—including equities, derivatives, bonds, and mutual funds—serving over 15,000 private, corporate, and institutional clients in Greece and internationally.
The firm maintains a dominant position in the Greek capital markets, consistently ranking among the top brokers in terms of market share and is repeatedly recognised in major institutional investor surveys as one of the leading brokers and top Equity Research Providers for Greece.
Its multi-awarded Research Division delivers timely insights and fundamental coverage on almost 40 listed companies—representing over 90% of the ATHEX’s market capitalisation and traded value.
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