correction after weak 1Q17 results offers opportunity to open a position in the stock
Wirtualna Polska’s (WPL) share has price dropped c.10% in the past two months, due mainly, in our view, to the market discounting the losses on its underperforming TV project, which affected its 1Q17 profitability (7% below our forecast at the EBITDA level, due mainly to the TV project), and uncertainties concerning its impact on WPL’s future results. Apart from the TV project, the company’s results were also weaker than we expected, due to the declining EBITDA margin of the core business, as the e-commerce segment typically generates lower EBITDA than the media segment. The e-commerce business gained in importance in 1Q17 however, as, according to WPL’s CEO, the media business results were broadly flat yoy, due mainly to the high base still including a higher level of ad spending from the finance sector. However, we believe that the abovementioned factors have already been discounted in the share price.Wirtualna Polska Holding SA is a Poland-based holding company. The Company owns entities that are engaged in the Internet publishing and broadcasting content, including operating business, technology, sports and entertainment portals, as well as electronic mail (e-mail) and electronic commerce (e-commerce). It also offers a range of advertising products, including display ads. The Company operates through such Internet portals as Wirtualna Polska, o2.pl, Money.pl, WP SportoweFakty, Dobreprogramy.pl, WP Parenting, Domodi and Homebook, among others. The Company operates domestically.
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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