G5 Entertainment: No contribution from new game in Q4 - ABG

We expect stable performance in Q4 (due 8 Feb)
Do not expect any contribution from new game Twilight Land yet
Share trading at 7x-6x EV/EBIT on '24e-'25e with 9% yield


No contribution from new game in Q4

We expect a stable Q4, similar to Q3, with 1% q-o-q growth for SEK 328m in sales, albeit with a slightly lower adj. EBIT margin of 9.5% vs. 10% in Q3 for an adj. EBIT of SEK 31m. Breaking down the performance, we see slightly higher sales for Hidden City q-o-q while New Games (including Sherlock) remain flat. We think it is still too early to expect any contribution from the new game Twilight Land, but we note that app downloads suggest that the company has spent a few million SEK to acquire players (i.e. not a significant push). We therefore expect a tad higher user acquisition costs in the quarter. According to management, early indicators for the game look good, but the game will go through a few tweaks before a bigger push.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/g5-entertainment/Equity-research/2024/1/g5-entertainment---no-contribution-from-new-game-in-q4/