CCC: the boys are back in town (stays BUY)
We maintain our BUY rating on CCC, with our 12M price target (PT) up to PLN 81, from PLN 59. We believe CCC has not only averted the liquidity crisis, with the capital increase, but has also managed to turn the corner at the operational level. In 4Q23, CCC delivered superior profitability in offline, and cutting the fat-tails managed to bring the online inventory below the PLN 1bn target. We see CCC as among the key beneficiaries of the macro tailwinds in Poland, which should allow for a 2023-25E EBITDA CAGR of 37%, when coupled with its optimised cost structure, the new licence agreements, and the halted negative impact of Modivo on the other operations. Across this, we see CCC’s EV/EBITDAs of 7.1x for 2024E and 6.1x for 2025E as attractive. The long-awaited refinancing of its expensive debt should provide a major trigger for the stock, in our view. On a negative note, despite buying itself two years (Softbank bonds conversion extension), we see a risk of losing control over Modivo, if its results and market valuations do not improve materially.CCC is engaged in the wholesale and retail trade of clothing and footwear. Co. offers its products to wide range of consumers, from demanding clientele of trendy boutiques to value-oriented medium segment customers, to less wealthy customers seeking reasonably priced quality footwear. Co. pursues a strategy of brand diversification, which is reflected in its three autonomous distribution channels: a chain of official CCC stores, BOTI footwear shops and QUAZI boutiques. Co. offers more than 2,500 designs of footwear. Co. also owns more than 67 proprietary brand names e.g. Lasocki.
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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