Wirtualna Polska: Top exposure to strong Polish ad market (stays BUY)
We maintain our BUY rating on Wirtualna Polska (WPL) and raise our 12-month price target (PT) from PLN 58.5 to PLN 66.5. We see WPL as the top exposure to the strong Polish ad market in 2019E: we forecast 7% total ad market growth and a 12% online segment increase (vs. 8% and 12% growth yoy in 2018E). Considering the solid expected organic growth, driven by positive market trends, the full consolidation of the companies acquired in 2018 and the expected halving of WP TV’s operating loss, we have raised our adjusted 2018-19E EBITDA forecasts by 9-18% to PLN 176-213m (we expect a 2017-20E adjusted EBITDA CAGR of 19%). We also highlight that WPL seems cheap on multiples: it is trading at 2018-19E EV/EBITDAs of 11.7-9.2x, on our forecasts, implying 13-15% discounts vs. its peers, and a 16% discount vs. its 12M average 1YF Bloomberg EV/EBITDA of 10.7x.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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