Cherry: First comment Q2, significant organic development

Research Note

2018-08-16

16:57

Today Cherry released their report for the second quarter of 2018. The Group showed significant organic progress with net sales growing by 40% and EBIT by over 100%, no small feat to pull off! Compared to our projections the sales level was higher while the EBIT came in lower. The main reason for the profit deviance was a higher marketing investment rate within Online Gaming and higher growth investments in both Yggdrasil and Game Lounge than we projected. In our view, that’s all good for a growth company like Cherry and its subsidiaries. Overall we will likely only make some minor adjustments to our projections following the report, and we continue to view the valuation as attractive. Our Base-case stands at 99 SEK per share.

KL

Kristoffer Lindström

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