Benefit Systems: Fitness makes you stronger (stays BUY)
After the SPO/ABB in 2Q18 (PLN 290m of new cash), Benefit Systems has enough cash to build up its presence in foreign markets, and strengthen its position in its domestic market, in our view. Despite being a leader in Poland, we believe it can still grow in its main market, and we expect 2017-22E revenue and EBITDA CAGRs of 9% and 12%, respectively. However, we see its foreign expansion as the main growth catalyst in the future (a 50% 2017-22E revenue CAGR in the sports cards segment). Benefit Systems is already present in the Czech Republic, Slovakia, Bulgaria and Croatia, and plans to expand into the Balkans region (Greece first). In the past three years, it has increased its foreign MultiSport members base from 33k to 178k, adding 82k new members in the LTM. We believe the market potential for sports cards in the foreign markets in the region is impressive, and we estimate it at roughly 2m cards, in the long term; we expect the MultiSport product to reach 30% of this figure by 2022E. We maintain our BUY rating on the stock, with a new price target (PT) of PLN 1,150.Benefit System SA is a Poland-based company engaged in providing work benefits in the area of sport, recreations, culture and entertainment for employers. Its products portfolio includes MultiSport Plus card, program that allows access to the sport and recreation clubs and multi-purpose facilities; MultiBet, providing access to more than 90 cinemas through Poland; and cafeteria programs, which allow employees to select items from such segments as sport, recreation, culture, entertainment, tourism and health and beauty. The Company is a parent entity of a capital group, which includes subsidiaries, such as MyBenefit Sp z o o, FitSport Polska Sp z o o, Vanity Style Sp z o o and Multisport Benefit sro, based in the Czech Republic.
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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