Wirtualna Polska - Record Results Ahead
Shares in Wirtualna Polska have rallied more than 34% over the last six months, but we still see more upside ahead, driven by expectations of record 2021 profits. We believe Wirtualna will achieve EBITDA of PLN 283m for the year, an increase of an estimated 34% from 2020, fueled by two core trends: (1) rising expenses on digital advertising, and (2) a big improvement in the e-Commerce business, where EBITDA is likely to grow the most this year off of a very low year-ago base, when vacation bookings via the Wakacje.pl Website were cut short by the outbreak of Covid-19. Note that our updated EBITDA estimate exceeds the current Bloomberg consensus by 11%. On our new estimates, WPL is currently trading at 11.0x 2021E EV/EBITDA and 21.2x P/E – attractive multiples that show respective discounts of 19% and 17% to the peer group. We believe WPL offers upside of 27% to our new target price of PLN 126.00, with the next catalyst possibly provided by what is likely to be a strong 2021 first-quarter earnings announcement on May 18th.
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.
Clients get access to a comprehensive selection of research products including daily market insights, monthly roundups, macroeconomic views, industry- and company- specific analyses, investing strategies, earnings comments, etc.
We give our institutional clients numerous opportunities to connect with industry professionals, top executives, and leading analysts:
- Get direct access to senior management teams at listed companies (over 30 meetings in 2018),
- Engage in our many industry events, featuring listed Polish and global firms (in 2018, we hosted sector-themed conferences around industrials, chemical companies, telecoms, retail, and financials, and co-hosted a Best of Poland investors' with Commerzbank and the Warsaw Stock Exchange),
- Stay informed through an array of enlightening discussion panels, workshops, and briefing sessions with regulatory officials.
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