ANY Security Printing Company: Positive fundamentals priced in now (downgraded to HOLD)
Following our BUY recommendation and the stock price exceeding our price target (PT) in early-July 2021, we have decided to downgrade the stock to HOLD, despite increasing our 12M PT to HUF 1,562/share. In our view, the investment thesis remains unchanged and we continue to appreciate the dividend payment outlook, as we believe that ANY is likely to return to 100% payouts as of next year, with the dividend yielding as much as 8% in 2022E. We expect record-high revenues this year, due mostly to the business that ANY lost during the lockdown in 2020, which has now returned, supported by the printing of immunity certificates. Growth could continue, even after 2021E, in our view, and we expect ANY to record a revenue CAGR of 5.8% between 2020 and 2028E. Recently, management decided to sell its Bulgarian subsidiary, which operates mostly in the form production segment. This gives ANY an opportunity to reallocate its resources to more innovative and profitable solutions. While our views on ANY remain positive, the current multiples, a premium of c.29% on its 2021E EV/EBITDA vs. its peers, are too high for us to keep the stock as a Buy with high enough conviction; thus, we have downgraded it to HOLD.Any Security Printing is a securities products group based in Hungary. Co. produces security products and solutions (tax stamps. stickers with security elements), plastic and paper cards (document cards, bank and telephone cards, commercial cards), personalized business and administration forms, and conventional printing products. Co.'s product offering its organized along three segments: Security Products, Solutions (paper-based documents, excise and tax stamps, security printers and security inks, additives); Card Production, Personalization (document cards, bank cards and loyalty cards); and Form Production, Personalization (transactional mailing, business, lottery and election forms).
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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