Do, 26. November 2020, 8:05 Uhr

Media and Games Invest

WKN: A1JGT0 / ISIN: MT0000580101

Original-Research: Media and Games Invest plc (von GBC AG):

29.10.20 11:02


Original-Research: Media and Games Invest plc - von GBC AG

Einstufung von GBC AG zu Media and Games Invest plc

Unternehmen: Media and Games Invest plc

ISIN: MT0000580101

Anlass der Studie: Management Interview

Letzte Ratingänderung:

Analyst: Marcel Goldmann, Cosmin Filker

Media and Games Invest (MGI) is a fast and profitable growing company in

the digital media and games sector.

The company combines organic growth

with value-added acquisitions. In the past six years, the MGI Group has

successfully acquired more than 30 companies and assets.

A few weeks ago, MGI announced the successful completion of an extensive

private placement (gross volume: approx. EUR 29.0 million) within the

framework of a dual listing on the Stockholm Stock Exchange Nasdaq Nordic

(special segment Nasdaq First North Premier Growth Market). Against this

background, we took the opportunity to interview CFO Paul Echt about this

strategic move.

GBC AG: Mr. Echt, what were the reasons for a dual listing on the Stockholm

Stock Exchange Nasdaq Nordic and what effects do you expect in terms of

trading (liquidity) and visibility of your share? Can the first positive

effects already be seen now?

Mr Echt: The answer is a resounding yes. If we fade out the first trading

week after the listing, due to exceptionally high, transaction-related

volumes of up to 5 million euros per day, and only look at the turnover

since the beginning of the second trading week, we see that the volume

averages around 1.0 million euros per day, while the trading volume for the

whole of September (before the dual listing) was still around 163,000 euros

on average. This is due to the fact that a strong gaming cluster has

developed on Nasdaq Stockholm in recent years. This includes successful

companies such as Embracer, Stillfront and Paradox, whose share prices have

risen between 230% and 1,117% in the past three years. Gaming is one of the

hottest topics on the capital market there and many investors are very

familiar with the business models and strong growth forecasts of the

market. This is true for institutional investors as well as private

investors, and our capital increase was accordingly oversubscribed almost

three times. But also internationally, such as in the UK or the USA, the

perception of MGI is increasing significantly due to the listing on Nasdaq

Nordic. This is because many investors have recognised Nasdaq Nordic as an

international marketplace for successful gaming companies.

GBC AG: The private placement raised approximately EUR 29 million in

investor funds. According to media reports, for the first time very well-

known investors from the gaming sector also participated in the capital

measure. Are further equity-based capital measures possible in the future

to further increase the company's high 'growth rate'?

Mr. Echt: Due to the dual listing on the Nasdaq, which was implemented in

parallel, we were able to attract a number of tier-one and long only

investors, as the topic of gaming is, as already mentioned, very well known

and popular on the Swedish as well as the international capital market.

Among the subscribers are also investors who have been on board since the

capital increase of 2019, but who have now significantly expanded their

holdings, which we regard as a very strong sign of confidence. No further

equity measures are currently planned. In general, however, we will not

rule out this option for the future if it makes sense and, on balance, adds

value for shareholders.

GBC AG: Your group generally follows a growth-oriented corporate strategy.

Please briefly explain your current strategic focus and what role the most

recent capital measure plays in your growth strategy?

Mr. Echt: We are a growth company and are investing accordingly to become

as large as possible as quickly as possible - without losing sight of

profitability - and are therefore focusing on growth through M&A in

addition to organic growth. In the first years between 2014 and 2017 we

have almost exclusively focused on inorganic growth. Especially in the very

dynamic and competitive gaming market, it is important to reach a critical

mass in order to benefit from economies of scale. Multiplayer games, as the

name suggests, thrive on the fact that they are played by tens of thousands

of players simultaneously. This increases the fun of the game, attracts

more players and also extends the life span of each player. In addition,

you can also publish new games more successfully if you do this on a

platform where over five million players are active every month. As already

mentioned, it is important to us that profitability is not lost and that we

also show a positive result at the end of the day. We have managed this

balancing act very well in recent years by acquiring companies and assets

that have functioning games and player communities and, after successful

integration into our platform, can continue to operate much more profitably

through synergy effects. In the same way, we will also use a large portion

of the proceeds from the current capital increase, thus creating further

substantial value for shareholders.

GBC AG: In August MGI announced convincing half-year figures for the first

six months of the 2020 financial year and at the same time raised its

previous corporate guidance. In the course of their business development so

far, the company even benefited from the Corona crisis, especially thanks

to its strong traditional business (online games). With its strong focus on

gaming and its complementary media business, will the Group also be among

the long-term beneficiaries of the corona problem?

Mr Echt: Again, a resounding yes. The containment measures in spring have

led to a significant increase in new players of up to 75% within our games.

There were many who asked us whether this was a one-off effect that did not

have a long-term impact. However, initial figures indicate a long-term

effect, as a large proportion of these players are still active today. This

is because the core of our game portfolio consists of multiplayer games.

These games are mostly free and, as already mentioned, are played by many

thousands of players at the same time. In the game the players then join

together and form guilds or clans and take part in competitions, through

which they improve their character's skills, and can also individualise

their character by purchasing so-called in-game items. The games are

therefore also a social platform in a certain way and have a very high

customer loyalty. Some of our games are over 10 years old and generate more

than 50% of their sales with players who have been in the game for more

than 5 years. So if a user decides to play one of our games, the

probability is correspondingly high that they will do so over a very long

period of time.

GBC AG: What can investors and investors expect from the MGI Group in the

current business year (outlook)?

Mr. Echt: The third quarter went well, despite the hot summer months, and

we have also made a good start in the fourth quarter. We are relaxed about

possible tightening of containment measures from an economic perspective,

as the gaming industry in general is very crisis-resistant, both in the

case of Corona and in the event of economic downturns. In the media

segment, we have learned from the experience of the spring. Here it became

clear that customers from the offline sector have reduced their budgets

considerably as a result of Corona, while customers from the online sector

have increased their budgets. Thanks to our customer base, which is

strongly focused on the online sector, we were able to come through the

crisis very well in the spring compared to many of our competitors and

continue to grow. We have taken advantage of this aspect in recent months

to focus our customer base even more strongly on the online sector and have

been able to win over some major customers and partners, such as Zynga from

the gaming industry.

GBC AG: GBC: Where do you see the MGI Group in the next three to five

years, especially in terms of business volume, major business areas and

business regions?

Mr. Echt: We want to continue to grow at an annual rate of 25%-30% in sales

over this period and achieve an EBITDA margin of 25-30%. In order to

achieve this, we will focus more on increasing the share of our organic

growth in the future. In concrete terms, this means that we will launch

more games per year, increasingly sublicense our own game IPs to partners

outside our core markets, such as Asia, and further expand our mobile

gaming business. This last point in particular holds great potential, as we

have a clear competitive advantage in user acquisition through the

development of the Media segment. However, it is clear that, in addition to

our focus on organic growth, we also want to continue to grow via M&A.

GBC: Mr Echt, thank you very much for the interview.

CONCLUSION GBC: Overall, we believe that MGI is well positioned to continue

its dynamic growth course in both growth areas gaming and media

successfully in the future. The newly acquired prominent investors from the

gaming sector also support our positive assessment of the company and the

business prospects. The financial resources raised by the company within

the scope of the dual listing form a good foundation for further growth and

also open up the opportunity to significantly increase the pace of growth

once again through targeted M&As.

Die vollständige Analyse können Sie hier downloaden:

Kontakt für Rückfragen

Jörg Grunwald



Halderstrasse 27

86150 Augsburg

0821 / 241133 0


Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR. Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter:


Date (time) of completion of german version: 29/10/2020 (10:09 am)

Date (time) of first distribution of german version: 29/10/2020 (11:00 am)

Date (time) of completion of English version: 29/10/2020 (10:11 am)

Date (time) of first distribution of English version: 29/10/2020 (11:00 am)

-------------------übermittelt durch die EQS Group AG.-------------------

Für den Inhalt der Mitteilung bzw. Research ist alleine der Herausgeber bzw.

Ersteller der Studie verantwortlich. Diese Meldung ist keine Anlageberatung

oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.


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