On the basis of our assumptions, we recommend to buy the shares of Kino Polska TV (KPL) with a target price of PLN 18.4 per share, which is about 33% higher than the current market price. The company is currently undervalued compared to its peers, trading at low market multiples.
Kino Polska TV is currently at a pivotal moment because of its acquisition by the Vivendi conglomerate, specifically the Canal+ Group. We expect to see stabilization of results in the crucial FilmBox segment in the upcoming quarters, which has been responsible for the growth momentum in recent years. Additionally, we anticipate a significant improvement in results at Stopklatka and Zoom TV.
Thus, we anticipate that KPL will exhibit an uptick in EBITDA adj. by 7.8% and 6.7% year-over-year in 2024 and 2025, respectively, at a consolidated level. We expect that in 2024, the management of the company will provide a more detailed focus on future initiatives aimed at improving its market position as part of the Canal+ Group.
One expected change is increased sharing of program libraries. Equally important to us would be forthcoming decisions related to the development of the streaming service, FilmBox+.
The model does not account for any new initiatives from KPL that would result in significant capital expenditures. We are currently uncertain about the company's authorities' and majority shareholder's stance on KPL's future dividend policy or potential investments within Canal+ Group
