Asseco Poland: On the crest of a digitisation wave (BUY - initiation of coverage)
We initiate coverage of Asseco Poland (ACP) with a BUY rating, and set our price target (PT) at PLN 112.3/share, implying 30% upside potential. As one of the leading European IT groups, we believe Asseco should continue to benefit from the accelerated digitisation of the economy, driven partially by the COVID-19 pandemic. The strong outlook is supported by solid market expectations (global IT market to expand 9-5% in 2021-22E, based on Gartner’s estimates) and the 2021E backlog (up 16% yoy, to PLN 10.1bn). However, we believe it is not fully reflected in the market consensus yet for ACP’s results – our 2021-22E NI forecasts are 12-15% above the Bloomberg consensus. On our forecasts, ACP trades at 2021-22E P/Es of 14.6x and 13.9x for 2021-22E, implying 25% and 18% discounts vs. its peers, respectively.Asseco Poland is a provider of proprietary information technology ("IT") solutions which is based in Poland. Co. is engaged in provision of consulting on IT infrastructure, security solutions, human resources solutions, outsourcing services as well as fully comprehensive IT support. Co.'s profile includes software and computer hardware consultancy, production of software as well as supply of software and hardware. This category includes analysing, developing, and programming ready-to-use IT systems. In addition to IT services, Co. also sells goods including mainly computer hardware.
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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