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G5 Entertainment: Tough quarter but exciting prospects - SEB

G5 faced tough conditions in Q1/22, with the war in Ukraine causing EO costs of SEK 15m, resulting in reported EBIT falling 7% below consensus, to SEK 54m. Adjusted for that, the EBIT margin was the highest ever, at 20.6%. More importantly, management says the potential of Sherlock: Hidden Object Mystery could eclipse Hidden City and will increase UA spend to capitalise. The mid-point of our DCF-based fair value range rises to SEK 390 (375).

G5 faced tough conditions in Q1/22, with the war in Ukraine causing EO costs of SEK 15m, resulting in reported EBIT falling 7% below consensus, to SEK 54m. Adjusted for that, the EBIT margin was the highest ever, at 20.6%. More importantly, management says the potential of Sherlock: Hidden Object Mystery could eclipse Hidden City and will increase UA spend to capitalise. The mid-point of our DCF-based fair value range rises to SEK 390 (375).
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