4iG

BSE: 4IG

Market CapHUF89783.1m

Last Close HUF905

4iG is one of the leading IT services and systems integrators in Hungary, working with public sector clients, large corporates and SMEs. Management is focused on becoming the market leader in Hungary by FY22 as well as targeting expansion in Central and Eastern Europe (CEE).

Investment summary

Driven by a combination of organic growth and M&A, 4iG reported H121 net revenues of HUF32.1bn, 59% y-o-y growth. Gross profit rose by 65% y-o-y to HUF10.2bn with EBITDA rising 30% y-o-y to HUF1.8bn, as EBITDA margins fell to 5.5%. 4iG looks on track to meet our FY21e revenue estimate. 4iG also has a full M&A pipeline, with five deals still expected to complete in H221, DIGI Group, Spacecom, Antenna Hungária, Telenor Montenegro and TeleGroup, which will transform the group. We estimate that, collectively, these deals will deliver run-rate EBITDA in excess of c HUF88bn (c US$300m) but we are not yet able to update our estimates for these acquisitions.

Y/E Dec	Revenue (HUFm)	EBITDA (HUFm)	PBT (HUFm)	EPS (fd) (HUF)	P/E (x)	P/CF (x)
2019A	41129.0	4075.0	3314.0	30.77	29.4	11.5
2020A	57300.0	5047.0	4175.0	36.09	25.1	23.2
2021E	82710.0	8916.0	7254.0	55.88	16.2	14.2
2022E	93048.0	9903.0	8511.0	63.67	14.2	12.2

Industry outlook

4iG’s strategy is focused on three pillars: IT services; telecoms & infrastructure; and space & defence. The group is targeting market leadership in Hungary, but recent acquisitions point to an increasingly diversified regional footprint in FY21 and FY22, with organic growth supplemented by M&A.

Last updated on 02/12/2021