WOOD Flash – Mail.ru: mixed 2Q21 results; guidance implies a strong recovery in 2H
While we were disappointed by the materially weaker margin in the largest, Social & Communication (S&C), segment, we note that management was very firm during the call about its expectations of a higher group EBITDA margin in 2021E, relative to 2020. Based on our analysis, we believe that the S&C segment margin should bounce back to 45% and 47% in 3Q21E and 4Q21E, respectively; while the Games segment could deliver an EBITDA margin above 20%. We still have a few questions about the company’s ability to integrate various services on one platform, to achieve the best customer experience and business economics. However, given the share price and the likely recovery in profits in 2H21E, we continue to rate Mail.ru a BUY.Mail.Ru Group is an Internet company based in the Russian Federation. Co. operates the email service [email protected] and two IM networks in Russia - Mail.Ru Agent and ICQ. Co. operates two Russian-language online social networking sites: Moi [email protected] and Odnoklassniki.ru, and owns a strategic minority equity stake in the social network Vkontakte. Co. is also engaged in developing projects in E-commerce and operating more than 40 thematic vertical sites, targeting various user categories. Co. is also Russia's predominant online games company. Co. maintains a portfolio of online games which includes 34 MMO games and over 30 games for social networking sites.
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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