Benefit Systems: regaining power post-pandemic (stays BUY)
We maintain our BUY recommendation on Benefit Systems (BFT). Our new 12M price target (PT) of PLN 730 (cut by 29%) offers sound 28% potential upside. The stock has underperformed the broader market (WIG index) by 27ppts over the past year, while its business seems to be well on track to regain its power post-pandemic, reflected in the strong cards base recovery in both Poland and abroad. While inflationary pressure and the post-pandemic increased activity of card users keep putting pressure on the results in Poland (not fully covered by upward price revisions), we see a better performance from the foreign operations as an offsetting factor. All-in-all, we forecast the 2022E EBITDA to be 2% above the pre-pandemic 2019 ESOP-adjusted level and we expect a further, sound 13% yoy growth in 2023E. We see BFT’s current valuation, at a double-digit discount vs. its peers and well below its historical multiples, as an attractive entry point.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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