"We confirm our Buy rating and increase our price target to EUR 6.4. This increase relates solely to the organic improvement and does not yet include the Smaato acquisition. Yesterday’s media event underscored the positive outlook and the highly attractive valuation compared to larger US peers (e.g. APP Loving trading at EV/EBTIDA 22 of 33, nearly three times MGI’s multiple)."
"Media and Games hosted a seminar yesterday (23.06.21) to provide greater insight into its Media business. Most of the media revenues are Software as a Service fees (SaaS); the remainder, agency fees and ad commission. MGI’s Supply Side Platform is particularly strong (67% of sales) while the Demand Side Platform and the Performance Platform account for 14% and 13% of sales respectively. The excellent outlook for the business is confirmed by a 92% retention rate among its big accounts and 37% growth of its SaaS accounts in Q1 2021. The two big closed ecosystems, Google and Facebook, control 28% and 22% respectively of global digital ad spending. The open internet, however, is highly fragmented and highly attractive in light of estimated growth rates in the low to mid-teens for global digital ad spending.
On Monday, (21.06) MGI disclosed that it is in exclusive negotiations with Smaato, a Digital Advertisement Platform to monetize websites and apps via ad placements. Smaato reaches around 1.3bn monthly users, which would nearly double MGI’s reach of 1.4bn monthly users and should generate substantial synergies. Smaato should add EUR 30 to EUR 40m revenues p.a. with an EBITDA margin of around 30%." |
Thread abonnieren
