Bittnet Systems: 1Q22 results confirm full-year outlook (stays HOLD)
We reiterate our HOLD rating on Bittnet Systems (BNET) and cut our 12M price target (PT) to RON 0.35/share, from RON 0.36/share, implying 7% upside potential. We have fine-tuned our forecasts, in order to reflect the recent results, the 2022E budget and the schedule of M&A activity. Due mainly to the delay in the TopTech acquisition and the ongoing difficulties in hardware supply, we have cut our 2022E sales and EBITDA forecasts by 13% and 8%, respectively, to RON 208m and RON 20.1m. Our current sales forecasts are in line with Bittnet’s budget, assuming organic top-line growth of 41% yoy, to RON 158.5m (vs. our organic 2022E sales of RON 155m). On our forecasts, BNET trades at 2022-23E EV/EBITDAs of 9.9-7.4x, at 32-13% premiums vs. its peers. Due mainly to the uninspiring valuation multiples, but also to the limited visibility on the planned inorganic growth (which is about to lead to RON 500m in sales by 2024E, according to the company’s strategy), we remain HOLDers of the stock.
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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