Ekspress Grupp: Faster growth and higher profitability (upgraded to BUY)
We have upgraded our rating on Ekspress Grupp from Hold to BUY, and increased our 12M price target (PT) from EUR 0.98/share to EUR 1.79/share (23% upside potential). We believe that the disposal of the printing business improves not only the company’s profitability outlook (a 2018-20 average EBITDA margin of 9% vs. a 2021-23E average EBITDA margin of 13%, on our estimates), but also its growth profile (a 2020-23E adjusted EBITDA CAGR of 21%, on our numbers). On top of this, we note that the company has been quite successful in boosting digital subscriptions in its business (+75% yoy in 9M21 in total in the Baltics), which bodes well for the sustainability of its profit, going forward. Moreover, we stress that its ticketing business is still suffering from the COVID-19 related restrictions in Latvia; should they be lifted, we would see upside potential for our forecast for the group’s online ticketing business’ profit.Ekspress Grupp AS is an Estonia-based company that is principally engaged in the printing and publishing sector. The Company operates through three segments: Online media, Periodicals and Printing services. The Online media segment provides the administration of online classified portals and intermediation of Internet advertising services. The Periodicals segment is engaged in the publishing of newspaper, magazines, custom publications and books in Estonia and Lithuania. The Printing services segment provides printing and related services. It is active through its subsidiaries, joint ventures and associated companies, including UAB Ekspress Leidyba, UAB Adnet media, AS Express Post, AS Linnaleht and OU Hea Lugu, among others. The Company is active in Estonia, Latvia, Lithuania, the Russian Federation and Finland, among others.
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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