Underpinned by its recently announced Netflix (NASDAQ:NFLX) global deal for YooHoo and Friends, as well as a couple of major new productions for the Chinese market, Mondo has significantly increased net profit expectations over the next five years. We upgrade our forecast net profit by 4%, 40% and 44% for the three forecast years, respectively. FY18 P/E and EV/EBIT parity with peers could drive the shares up towards €9.0 per share.
Global deal with Netflix, new Chinese productions
Mondo’s recently announced deal with Netflix for the global distribution of its new flagship production, YooHoo and Friends, represents a milestone for the group. As well as being its first deal with an OTT major player, it is its first US premiere and with production cost already covered, we expect it to have a significant impact on profitability from 2019. Mondo has also announced two new major productions for a total value of $16m with a new Chinese partner, of which one has already been licensed in China.
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