Bittnet Systems: Through M&A to RON 500m of sales (stays HOLD)
We reiterate our HOLD rating on Bittnet Systems (BNET) and cut our 12M price target (PT) to RON 0.36/share, from RON 0.79/share, implying 14% upside potential. We upgrade our sales forecasts for BNET by 30% in 2022-23E to reflect the transactions performed by the company. The company has further ambitious M&A plans in the mid-term, as it aims to increase the group’s revenue generating potential from RON 250m in 2022E to RON 500m in 2024E, but the details of the four-to-five additional deals planned by BNET have not been revealed yet. Due mainly to the uninspiring valuation multiples, but also to the limited visibility on the planned inorganic growth, we remain HOLDers of the stock. On our forecasts, BNET trades at 2022-23E EV/EBITDAs of 8.8-7.2x, at 16-5% premiums vs. its peers.
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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