Wirtualna Polska - Major Rebound in Tourism, Large Hikes in Advertisement
Since the issue of our recommendation in December 2020, Wirtualna Polska’s share price increased by >58%, significantly outperforming the broad-based index (+35 p.p. vs WIG). Just like we assumed, during this time, the company took advantage of two distinct trends: (1) a significant rebound of the international tourism market, which had been hit hard by the Covid-19 restrictions, and (2) a strong demand for electronic media resulting from advertisers’ lower interest in traditional advertisement channels. In H1 2021, Wirtualna Polska improved its adjusted EBITDA by >73% y/y vs H1 2020 and by 45% vs H1 2019. After record-high results, we upgrade our financial forecasts for the company. In our opinion, Wirtualna Polska stands a chance of generating an adjusted EBITDA close to PLN 300 million. Thus, the company’s 2021 EV/adjusted EBITDA multiple equals 13.4x, which is approx. 9% lower than the peer group. The discount is not justified, as Wirtualna Polska’s 2020-2022 EBITDA CAGR stands at 28.9% vs peer group’s EBITDA CAGR of 17.7%. We increase our price target to PLN 150.00 and maintain a buy recommendation.
Wirtualna Polska Holding SA is a Poland-based holding company. The Company owns entities that are engaged in the Internet publishing and broadcasting content, including operating business, technology, sports and entertainment portals, as well as electronic mail (e-mail) and electronic commerce (e-commerce). It also offers a range of advertising products, including display ads. The Company operates through such Internet portals as Wirtualna Polska, o2.pl, Money.pl, WP SportoweFakty, Dobreprogramy.pl, WP Parenting, Domodi and Homebook, among others. The Company operates domestically.
Set up in 1986, mBank (originally BRE – Export Development Bank) is Poland’s 4th largest universal banking group in terms of total assets and 5th by net loans and deposits at the end of June 2019. mBank has one of the oldest brokerages in Poland – we have been providing brokerage services since 1991 - and the biggest, serving about 300 ths clients.
We provide all brokerage services available in the Polish capital market (i.e. Warsaw Stock Exchange, non-public markets and forex) in a way that meets the expectations of all groups of investors, both individual and institutional. Participating in the dynamic growth of the Polish capital market since its inception, we have acquired competences and experience needed to provide the highest quality of service and we have won the trust and satisfaction of our Clients.
Over the past decade, mBank's Equity Research Team has been consistently ranked among the top research teams in Parkiet's annual institutional investor surveys (Parkiet is Poland's leading daily business newspaper). mBank analysts provide coverage on an extensive list of companies, mainly in Poland but also elsewhere in the CEE region: Austria, Czechia, Portugal, Ukraine and Hungary.
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