Huuuge Games: solid cash distribution potential (stays BUY)
We maintain our BUY on Huuuge Games (HUG), increasing our 12M price target (PT) by 30% to PLN 34.6, offering 33% potential upside. We revise our 2023-25E adj. EBITDAs upwards by 50-80% to reflect our expected profitability improvement, despite top-line pressure. Our new forecasts are 10-12% above consensus and result in a 2023E adj. EV/EBITDA of 3.1x, below the long-term average and implying a deeper discount to its peers than historically. While, we assume no medium-term earnings growth potential, we recognise HUG’s strong cash generation, which could allow for 17-27% DYs in the next two years.
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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