Fundamental analysis of Atende and CD Projekt. Lots of bad information already in the game manufacturer’s course



Fundamental analysis of Atende and CD Projekt.  Lots of bad information already in the game manufacturer's courseThe period of strong sell-off in the stock markets is approaching. The first half of the year was terrible, not only on the Polish stock exchange, but also on the global stock markets. In the latest episode of the “Fundamental Analysis of WSE Companies” program, Konrad Książak took a closer look at two companies that have been heavily discounted. I’m talking about Atende and CD Projekt. Is most of the bad news in the course of these companies?

Sale of a subsidiary and distribution of dividends

“Atende is a company that has changed a lot. In early 2021, they sold part of their business. Atende Medica was not a big department when it came to the company (1.2 million PLN), but apart from this sale there was also another much bigger and rather enigmatic department, because 6-7 months earlier, the president of the company said Atende software is the segment they want to invest in. Anyway they sold the company and it was a very big sale (52.5 million PLN)”- Konrad Książak recalls.

As the author of the program points out, Atende Software’s results had a very significant impact on the results of the entire group. We are already seeing a major negative impact on net profit. Aside from losses, the analyst also negatively evaluates the allocation of much of the funds from sale to the payment of dividends. The question now is: what will the company do with the rest of the money raised?

It’s getting worse

After a weak 2021 in terms of results, the start of this year also brings net losses. The results are therefore becoming an increasing problem for Atende. There are no significant positive assumptions for the coming quarters yet. Lack of positive information, after one contract, is reflected in sharp declines in bids. The discount doesn’t stop there.

An even larger scale of declines has been observed for some time with the leader of Polish gaming – CD Projekt. The price has been falling since the premiere of the key game “Cyberpunk 2077”. Since then, negative news has prevailed, or rather no significant positive news. The company is also disadvantaged by the fact that it is the leader of the KNF short sale register.

First better news from CD Projekt

“In the first quarter, they released “Cyberpunk” for the latest generation of consoles along with a major update for all platforms. Patch 1.5 will positively impact the perception of the game and its sales, especially on consoles. the largest production capacity focused on developing a major expansion pack for the game, which will debut next year” – points to Konrad Książak.

According to him, these are the first reasons for investors to slowly start positioning. The most important moment may be to give the exact release date of the add-on.

The improvements to the game so far have made the reviews on Steam quite positive as of today. This year, the resources for further improvements will be smaller. In turn, a lot of bad news can already be in price. Other than the addition, the partnership with Epic Games should positively impact the company’s experience.

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“It can be said that most of this negative information is already heavily priced and we don’t expect any further bad news” – says the author of the program.

Strong sell-off of CD Projekt shares

The chart should start to change when the largest positions start to disappear from the short sell register. In turn, the impact of new games on the track is a matter of years to come. It is becoming increasingly difficult to find arguments for a further decline in quotations.

If we compare Atende with CD Projekt, we still have negative information on Atende’s side, while in case of CD Projekt, there is a chance that the company is going down the path of providing positive information. The supplement to be released next year will be key to the listing.

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