Mighty Kingdom is thelargest independent game developer in Australia. They have worked with some ofthe most prestigious international companies, including Disney, LEGO,Australian Red Cross, Funcom, Rogue, and Snapchat. Their portfolio of games areall crafted in our Adelaide studio by a team deeply invested in delightingplayers.
They just brought ex-ABC managing director Michelle Guthrie as its chairman,games and is ramping up marketing for a listing that should see it hit the ASXboards with a $42.4 million market capitalization. A raising of that sizeimplied a $27.4 million enterprise value for the games developers, which hasreleased more than 50 games since it was founded in 2010.
Mighty Kingdom will seek to raise up to $15 million for its listing at 30¢ ashare, according to a presentation that was put together this month and seen bythis column. Mighty Kingdom posted ~$3 million revenue in the 2020 fiscal year,which is forecast to rise to between $7.5 million and $10 million in the 2021financial year, according to AFR.
My Analysis (*Not Financial advise*)· Broker: CCZStatton Equities
Target Listing: March (Date to be confirmed)· Positive:
- Valuation is good with 4.3 to 5.7 market cap to projected revenue (m)
- Market Cap to enterprise value of 1.57 is very good valuation
- Money raised in the IPO would primarily be used by Mighty Kingdom to develop its own games, which is more lucrative than being a developer for hire for large entertainment groups.
· Comparison
- PLAYSIDE STUDIOS LIMITED (PLY) is the closest comparison
- PLY was listed in Dec at 20c and currently trading at 42c.
- PLY has market cap of 44m
· MyConclusion
- Mighty Kingdom will be high in demand and will do well
- I am expecting this to open with 50% or higher gain
- It will use money for developing its own games and founders are not selling down. Hence, I am expecting its value and market cap to organically grow as games will be launched.
· Buy or Not:
Below are some useful links for people are interested to analyze. I am interested to know your perspectives.
- Yes, for me. I will be investing.
- Please Do Your Own Research (DYOR) before investing.
https://www.copyright link/street-talk/mighty-kingdom-meets-funds-ahead-of-march-ipo-20210211-p571nh
https://www.mightykingdom.com/
