Warsaw Stock Exchange: Pointpack - Strong parcels volumes look promising
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The strength of Pointpack’s core underlying parcel volumes (51% y/y in 1Q23) is unlikely to go unnoticed by the market. The result should relate to a significant improvement in the effectiveness of PUDO (Pick Up/Drop Off) points. We believe there is room for further operational improvements that may allow the firm to post decent growth in core volumes of 32%/26% in both 2023E/2024E (vs. 23%/24% we previously assumed) and to largely offset the increased cost pressures in the core business. Within the P2A unit, on the other hand, we push half of hardware deliveries from 2023E to 2024E, due to the probable delay in the realization of the Polish Post contract. This mainly affects our projections for 2023E/2024E consolidated results and affects the multiple angle in 2023E/2024E to 5.3.x/2.6x EV/EBITDA, but does not greatly alter our view on the P2A unit based on projected weak NPV for the project. Overall, we lower our consolidated 2023E EBITDA forecast from PLN 22.8m to PLN 14.5m, while we raise our forecast from PLN 15.4m to PLN 22.6m for 2024E. We maintain our base-case scenario of no extension of the P2A contract with Polish Post, hence we still expect to see the first dividend in 2024E, with a dividend payment of PLN 5.51ps (DY 13.7%). With our continued positive outlook on the core business, we maintain a BUY rating and set our FV at PLN 70.00ps (versus PLN 65.00ps previously), which implies 75% upside. On our forecasts, Pointpack trades at a P/E of 7.3x/3.7x for 2023E/2024E.
E-commerce
Pointpack
BUY
FV PLN 70.0 from PLN 65.0
75% upside
Price as of 16 May 2023 PLN 40.10
Maintained
Share data
Number of shares (m) 1.1
Market cap (EUR m) 10.0
12M avg daily volume (k) 0.7
12M avg daily turnover (EUR m) 0.01
12M high/low (PLN) 49.70/25.00
WIG weight (%) na
Reuters PNTP.WA
Bloomberg PNT PW
Total performance
1M -4.1%
3M -13.6%
12M -1.0%
Shareholders
Mr Marek Piosik 19.7%
Mr Krzysztof Konwisarz 13.0%
Santander TFI 8.0%
Quercus TFI 8.0%
Insignis TFI 5.0%
Others 46.3%
P2A delay does not materially change our outlook on the contract. We do not view the (hopefully) short delay with realization of the deal with Polish Post as overly negative, as it does not change our approach to the project to any great extent (we estimate its NPV excluding working capital changes at PLN -0.8m versus PLN 0.5m previously, assuming no extension of the contract with Polish Post). The delay will result primarily in lower recognized EBITDA from the contract in 2023E (we cut our estimate to PLN 7.0m from PLN 14.4m), effectively increasing the 2024E contribution (we forecast PLN 8.9m versus PLN 3.1m previously).
Booming parcel volumes. The volume of parcels handled by PUDO points within Pointpack’s network grew by 51% y/y in 1Q23 after estimated growth of around 45% y/y in 4Q22 and reported 37%/29%/11% y/y growth in 3Q22/2Q22/1Q22 respectively; although 1Q22 was not fully comparable as it was negatively affected by the Russian invasion of Ukraine.) We view positively the acceleration in underlying volumes driven by improved utilization of PUDO points (with the addition of new couriers per point on average), despite a small decrease in the total size of the network (which declined 6% y/y as of end-2022). We expect Pointpack to achieve volume growth of 32%/26% y/y in 2023E and 2024E, which should enable the core business to deliver decent results after accommodating a higher cost base in 2022/2023E. We forecast core business EBITDA at PLN 7.5m/PLN 13.8m in 2023E/2024E (versus PLN 6.8m in 2022).
Figure 1. Pointpack – Financial summary (PLN m)
Analyst
Marcin Nowak
+ 48 22 236 92 44
