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Flexion Mobile: Enters a new phase after recent game signings - ABG

We see similarities to the successful period in 2019
Majority of ’22e revenues already live or signed
Can now put more focus on long-term strategy

September was successful for Flexion in terms of new game signings, with three new top-tier titles signed. In addition, the company also signed top-tier title Evony in August. These four titles offer combined monthly revenue of USD 39m, according to data from Sensor Tower. The latest game signing (generating monthly revenues of USD 17m) included distribution rights for Amazon, Samsung and Xiaomi, which dampens the overall potential slightly as Huawei is excluded. We see clear similarities to the successful period in the beginning of 2019 when the company signed three top-tier titles in a short period of time. For comparison, those three games generated USD 20m in monthly revenues when they were signed. It usually takes 1-2 years before newly signed games start to have a material impact on revenues, which is why we believe Flexion will benefit from the recent game signings in ’22e and ’23e.

We also raise our DCF valuation range somewhat to SEK 17-29 (17-28), as the estimate upgrade is offset by higher long-term opex assumptions. We think the revenue visibility has improved greatly after recent game signings and Flexion can now put more focus on its long-term strategy.
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