Although we still perceive ATM Grupa as a good long-term premium content exposure, there are limited positive triggers within the core business in the short term. We expect the company’s core media business to adapt to the curbed pipeline of premium TV series content and lower comparable demand for usual TV content anticipated in 2023E. Moreover, after the payment of a PLN 0.08ps advance dividend in December, our forecast of a total 2023E DPS of PLN 0.31ps (DY of 8.8%) looks neutral vs. the total paid 2022 DPS of PLN 0.28ps (combined with the advance payment). On the other hand, we are negative about the company’s decision to expand its real estate operations with the purchase of a SPV in Sweden for SEK 25.7m. The company now owns a land plot that will allow the construction of a project roughly five times the size of the one that recently ended, to be realized in three to five stages. The company is also contributing PLN 16.5m to the ATM Baltic SPV (ATM Grupa holds a 50% stake) for the Sianozety project on the Baltic Sea coast. In our view focusing on the core business might be more beneficial over the long term and would be welcomed by investors. Overall, we forecast revenues at PLN 238m/271m (-10%/+14% y/y) in 2023E/2024E (excluding estimated PLN 46m from the Swedish project in 2022E we forecast 2023E adj. top line dynamic at +9% y/y) and net profit at PLN 37m/44m (-5%/+21% y/y), down from PLN 43m/51m assumed earlier. We maintain our BUY recommendation and increase our FV to PLN 4.50 per share (implying 27% upside) from PLN 4.40ps. On our forecasts, ATM Grupa trades at a P/E of 8.1x/6.7x for 2023E/2024E.
Dark clouds gather on the premium pipeline. We remain optimistic about the demand for premium content over the long term, as we believe OTT platforms in general will gradually increase in the mix of local market content. However, the outlook for 2023E seems uninspiring. With the completion of “Lovzone” in 2022 (ordered by Netflix) and the uncertain timing of the “Black Dog” TV series for Viaplay (delayed from 2022) the company’s short-term pipeline of TV series looks relatively thin on the ground in terms of anchor projects. Within movies, ATM Grupa has one movie scheduled for release in 1Q23, but the subsequent pipeline is limited according to management comments made after the 2Q22 results. Overall we have reduced the number of premium TV series to be produced from 1.6x/2.8x to 1.3x/2.0x in 2023E/2024E respectively, but we maintain our longterm assumption of 5x premium TV series annually.
Potential disposal of Boombit remains uncertain. In our base scenario we do not include the potential disposal of ATM Grupa’s stake in Boombit (4.0m shares, 29.63% of Boombit’s equity; the strategic review process started in November 2021). The likelihood of the disposal taking place declines with each passing month, in our view, and the company does not have to push for the transaction if the conditions are not ideal, as ATM Grupa has a healthy balance sheet and a relatively low need for cash to finance core content operations.
Analyst: Marcin Nowak marcin.nowak@ipopema.pl + 48 22 236 92 44 Michał Wojciechowski michal.wojciechowski@ipopema.pl + 48 22 236 92 69
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