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THQ Nordic

Research update

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THQ Nordic: Exciting times ahead

During Q3 THQ Nordic showed strong figures. The revenue from new releases widely exceeded our projections. Sine Mora Ex’s sales on Nintendo Switch seem to have been the primary contributor. Q4 will be massive with a large number of releases; so far the sales figure seems to have meet management’s expectations. We have trimmed our top-line for Q4 slightly due to release schedule shifts.

After the period ended THQ Nordic presented yet another acquisition. This time it’s the studio, Experiment101, behind the publishing title Biomutant. We find the deal as favorable and have adjusted our projections upwards as the company now is the full IP owner. Despite the massive amount of new titles coming during Q4, what gets us truly exited is the pipeline for 2018 and beyond.

We have adjusted our 2018 and 2019 estimates upwards following the acquisition of Experiment101, release schedule shifts and because the management seems increasingly confident about the coming years. Our new Estimated Fair value, in Base-case, amounts to 96 (82) SEK per share.

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