CentralNic Group (CNIC): A scaling player in online services

London, UK, 23 November 2021

CentralNic Group (CNIC): A scaling player in online services

CentralNic provides domain name services and online marketing, focused on consolidating a highly fragmented global market. It offers a broad range of internet services, including reseller services, to corporates and SMEs (Online Presence), as well as monetisation services (Online Marketing) to domain investors. The group strategy is to benefit from structural market growth, building its two segments and diversifying the group's revenues through cross-selling and upselling services. CentralNic has achieved a five-year revenue CAGR to FY20 of 78%. The company is valued on an FY21 EV/EBITDA multiple of 12.6x and a P/E of 17.4x, a material discount to its peer group, with our DCF underlining the discount to fair value. We would expect future M&A to bring CentralNic's multiples down further.

Based on Edison's estimated 59% sales growth in FY21 (estimates raised with the Q321 trading update), CentralNic offers some of the strongest growth among its peers, yet trades on an FY21 P/E multiple of 17.4x and 16.5x for FY22e. Whether we compare CentralNic to web services or online marketing, the shares continue to trade at a material discount to its global peers, with our NPV analysis underlining the significant discount to theoretical fair value. 

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