Report
Pawel Wieprzowski, PhD ...
  • Piotr Raciborski, CFA

Ten Square Games: Big fish in a large (and growing) pond (BUY - transfer of coverage)

Due to a change in analyst responsibilities, we transfer coverage of Ten Square Games, keeping our BUY rating, with a new price target (PT) of PLN 704/share (from PLN 310/share). We have increased our 2020-21E EBITDA forecasts by 54-78%, to reflect the impressive growth in Fishing Clash bookings (up 266% in 2Q20 and 252% in July 2020), supported by the pandemic, which encouraged a new wave of mobile gamers to try Ten Square’s flagship game (MAU up 382% yoy to a record-high 6.9m in 2Q20). We expect Fishing Clash sales to remain at the high, newly-reached level in the coming quarters, while its launch in China (the biggest mobile gaming market globally) should add PLN 37-79m in 2021-22E sales, on our estimates (4-7% of total sales). We expect this, along with the monetisation of its current customer base, to result in a compelling 63% NI CAGR in 2020-22E. On our estimates, Ten Square trades at 22.0-14.9x 2020-21E P/Es, at 26-41% discounts vs. its gaming peers.
Underlying
Ten Square Games

Ten Square Games SA is a Poland-based mobile games development company. The Company is focused on 3D simulation hobby games for people who seek outdoor experiences on their mobile devices, like fishing or hunting games. Its games are available on social platforms, a network of partner sites, as well as on Google Play, App Store and Microsoft Store.

Provider
Wood and Company
Wood and Company

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.

Analysts
Pawel Wieprzowski, PhD

Piotr Raciborski, CFA

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