11 bit studios: largest releases may be delayed… (downgraded to HOLD)
We have downgraded 11 bit studios (11B) from Buy to HOLD, while increasing our 12M price target (PT) by 10% to PLN 628, which offers a limited 9% potential upside. We continue to like the story, but believe that the attractive portfolio has been mostly priced in by the market. We assume that the releases of Frostpunk 2 and Projekt 8 will be delayed vs. our previous assumptions by about a year, to 2024E and 2025E, respectively. As a result, 2023E should be supported by only two releases in publishing (The Invincible and Vitriol), with a limited boost for earnings. Our 2023E expectations are well below the Bloomberg consensus, as the market still seems to be assuming the Frostpunk 2 release this year. If the release moves to 2024E, as we assume, it could weigh on the short-term share price performance. On our forecasts, the multiples start looking attractive only from 2024E, with the still rather uninspiring 2023E ahead of us.11 BIT STUDIOS SA is a Poland-based company engaged in the game development industry. Its product portfolio includes four games: Anomaly Korea, Sleepwalker's Journey, Funky Smugglers and Anomaly Warzone Earth. The Company produces video games for different devices, such as video consoles, personal computers (PC), and Apple products (iPhone, iPad), among others.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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