HUF65330m market cap

HUF695 last close

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.

Investment summary

4iG has announced its Q120 results. These show continuing momentum from the step change achieved in FY19, where revenues almost tripled to HUF41bn. Q120 revenues were HUF8.6bn, representing 78% organic growth y-o-y (Q119: HUF4.9bn), with EBITDA rising to HUF578m, up 20% y-o-y (Q119: HUF483m), an EBITDA margin of 6.7% (FY19: 9.9%, FY20e: 8.5%). Weaker margins were expected as 4iG is carrying additional personnel costs (HUF0.79m) to allow the business to scale (headcount increased to 620) as well as high software development investment. Q120 will also include weakness due to the COVID-19 lockdown, although management indicated that the impact on the business has been minimal, with previous financial guidance maintained. 4iG has HUF23bn of contracted revenue for FY20, close to 50% of our FY20e revenue forecast of HUF49.1bn. We maintain our estimates.

Y/E Dec
Revenue (HUFm)
P/E (x)
P/CF (x)
2018A 14007.0 842.0 219.0 1.11 626.1 N/A
2019A 41129.0 4075.0 3344.0 31.87 21.8 9.3
2020E 49083.0 4152.0 3358.0 31.84 21.8 19.0
2021E 58881.0 5631.0 4794.0 44.93 15.5 14.1
Share price graph
Balance sheet
Forecast net cash (HUFm) 4445
Forecast gearing ratio (%) N/A
Price performance
Actual 36.0 26.6 (18.6)
Relative* 26.5 40.1 (9.4)
52-week high/low HUF1148.0/HUF296.0
*% relative to local index
Key management
Peter Fekete Advisor to the Chairman