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Next Games: Balance sheet strengthened via share issuance - Nordea

Next Games has improved its liquidity position via a share issuance that took place on Thursday (18 March). The company stated that the proceeds of EUR 4m will be used to finance new and existing game development projects, including an aspiration to gain new IP partnership contracts. The improved liquidity will enable the company to continue with its game development projects in 2021-22 even if its upcoming game launches do not meet expectations financially, we believe.

Looking forward, reaching the guided revenue of at least EUR 40m in 2021 is highly dependent on the expected global launch of Stranger Things Puzzle Tales at the end of H1. If the title enjoys a successful reception, we note significant upside potential for revenue in 2022E-23E. As to its results, H1 is likely to be muted but new information about upcoming launches may be a trigger for the she share. We maintain our fair value estimate range of EUR 1.7-2.4 per share.
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