CHER B

Cherry

Research update

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Cherry: 3 for the price of 1

Cherry showed significant organic progress during Q2 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 an increased marketing investment rate within Online Gaming and higher growth investments in both Yggdrasil and Game Lounge than we projected.

We see a substantial potential from today’s level supported both by our SOTP and DCF valuation. The management is working hard on creating a more flexible financing solution; we find this as a likely value creating catalyst for the share that could materialize in the near-term. Following the report, we have only made some minor forecast adjustments, so we reiterate our Base-case. We find that today’s market valuation creates an opportunity for investors to buy ComeOn and get both Game Lounge and Yggdrasil practically for free.

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