Swedish daily SvD had a whole page dedicated to our top pick G5 Entertainment today in its business section. While there were no news in the article, we find it extremely positive that the word starts to spread, slowly but steadily.
The newspaper sat down with CEO Vlad Suglobov in connection with its visit to Stockholm one week ago and is shedding some light on G5’s history and the recent developments in the article. CEO Suglobov once again highlights the superior earnings potential of the Freemium concept saying “it is significantly better way of monetizing a large audience” and that it is “an area were both we and many others can grow significantly”. “Most of the people do not pay anything at all but there are examples of players spend several hundred USD on one game”. The CEO also reiterates that G5’s Android business is developing ahead of expectations but “there is still a gap to iOS levels”. He is also positive to a potential new player entering the smartphone market, saying that “if Microsoft and Nokia succeed with their launch and manage to sell a couple of million units”, G5 will be ale to quickly port its game for this platform.
The positive news flow continues and the G5 share is up some 34% year-to-date. Nevertheless, at Nordic Investor we do by no means think that the share is fairly priced today. As we have pointed out previously, G5 was valued at 14 times forward-looking earnings exactly one year ago. Applying a similar multiple to the company’s 2012 target shows that there is plenty of room left, short-term. We still argue that a multiple of 14 times seems far too conservative for a company with G5’s credentials, but that’s another story.
See you at SEK 45!