Original-Research: ZEAL Network SE (von NuWays AG): Kaufen

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Original-Research: ZEAL Network SE - from NuWays AG

15.10.2024 / 09:00 CET/CEST

Dissemination of a Research, transmitted by EQS News - a service of EQS

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Classification of NuWays AG to ZEAL Network SE

Company Name: ZEAL Network SE

ISIN: DE000ZEAL241

Reason for the research: Update

Recommendation: Kaufen

from: 15.10.2024

Target price: EUR 54.00

Target price on sight of: 12 months

Last rating change:

Analyst: Henry Wendisch

Google bans ads from illegal lottery providers

Last month, Google update its advertisement policies regarding gambling and

games, which only allows whitelisted operators to advertise on Google,

helping the regulator to battle the illegal lottery market. While impacts

for ZEAL are hard to quantify, we nevertheless regard it as positive news.

Effective 25th September 2024, Google only allows companies whitelisted by

the GGL (Gemeinsame Glückspielbehörde der Länder, German Gambling authority)

to run ads for their offerings. Consequently, companies without a GGL

license had their advertisement certification revoked on that day. This also

includes gambling aggregation services (such as landing pages), thus also

preventing a bypass of the ban.

This not only follows Meta's gambling advertisement policy, which is in

place since 2014 and also requires companies to be whitelisted by the GGL,

but also closes a gap for illegal competition in ZEAL's most important

advertisement channels.

The ad-bans should help the GGL to fight the illegal lottery market in

Germany. While existing measures such as IP- and payment blocking against

illegal offerings in Germany not only take time, but also need a court

decision, are thus not as effective as intended. Therefore, the decision by

Google to stop the advertisement does not stop illegal operations, but could

prevent further growth of the black market.

The latter is key for the legal market, as uninformed consumers, especially

those that switch from offline lottery to online, cannot differentiate at

first sight whether a provider is legal or not. This implies, that now the

legal online lottery providers (ZEAL and the federal state's lottery

operators landing page lotto.de) are competing against each other at online

marketing channels, such as Google. A potential positive impact for ZEAL

and/or the legal lottery market is hard to quantify as neither the black

market nor their marketing budgets are known, however the expected absence

of illegal competition on Google could lead to falling customer acquisitions

costs, as the pay-per-click advertising auction for certain buzzwords should

have less bidders, in our view.

This bodes especially well for ZEAL, which recorded new records in marketing

efficiency earlier this year. Against this backdrop, we reiterate our BUY

recommendation with an unchanged PT of EUR 54.00, based on DCF.

You can download the research here: http://www.more-ir.de/d/31051.pdf

For additional information visit our website: www.nuways-ag.com/research

Contact for questions:

NuWays AG - Equity Research

Web: www.nuways-ag.com

Email: research@nuways-ag.com

LinkedIn: https://www.linkedin.com/company/nuwaysag

Adresse: Mittelweg 16-17, 20148 Hamburg, Germany

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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss

bestimmter Börsengeschäfte.

Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben

analysierten Unternehmen befinden sich in der vollständigen Analyse.

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