Bittnet Systems: continuing M&A spree (stays HOLD)
We reiterate our HOLD rating on Bittnet Systems (BNET) and cut our 12M price target (PT) to RON 0.30/share, from RON 0.35/share, implying 2% upside potential. We have fine-tuned our forecasts in order to reflect the recent results and the progress of Bittnet’s M&A schedule, including the recently-announced Dataware acquisition. Due mainly to the delay in the TopTech and 2NET acquisition, ongoing difficulties in the hardware supply chain and inflationary pressure, we reduce our 2022-23E EBITDA forecasts by 45% and 12%, respectively, to RON 11m and RON 22.7m. On our forecasts, BNET trades at 2022-23E EV/EBITDAs of 9.5-6.4x, at 36-9% premiums vs. its peers. Due mainly to the uninspiring valuation multiples, but also the limited visibility on the planned inorganic growth (which is expected to lead to RON 500m in sales by 2024E, according to the company’s strategy), we remain HOLDers of Bittnet.
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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