Grupa Pracuj: dangerous liaisons with the macro (SELL – initiation of coverage)
We initiate coverage of Grupa Pracuj (GPP) with a SELL rating and a price target (PT) of PLN 48.4/share, implying 6% potential downside. Grupa Pracuj is a leading HR technology platform, operating in Poland, Ukraine and Germany. The business is heavily exposed to macro trends, especially in the labour market. Considering the expected slowdown in the Polish economy and the crisis in Ukraine, we expect GPP to face a major operating results deceleration, which we believe is not yet fully reflected in the consensus. Our forecasts, assuming a 10% 2021-24E EBITDA CAGR, are 17-9% below the consensus on 2022-23E EBITDA and 22-18% below the consensus on net profit. On our estimates, the company is trading at 2023-24E EV/EBITDAs of 12.8-11.2x, at a 3% discount and a 16% premium vs. its peers. We believe that some discount to its peers is justified, considering GPP’s lower growth outlook.
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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