First Read: HBX Group International plc "H1 26: Middle East weighs" (Buy) Briest

Research evidence excerpt

First Read: HBX Group International plc "H1 26: Middle East weighs" (Buy) Briest

Forecast returns

Forecast price appreciation 64.2%

Forecast dividend yield 2.6%

Forecast stock return 66.8%

Market return assumption 7.8%

Forecast excess return 59.0%

Company Description

HBX was created in 2016 when B2B hotel distributor Hotelbeds was acquired from TUI AG for

EUR1.2bn by Cinven and CPPIB. Competitors Tourico and GTA were added in 2017. In FY24

HBX distributed content from 250k hotels (100k of which it directly contracted with) through

60k distributors, including tour operators, travel agents and airlines. It generated EUR7.7bn in

gross volumes at a 9.0% take rate and 57% EBITDA margin. Bedbanks made up 9% of the

overall market in 2024, implying HBX had c15% share. Expedia is its largest B2B competitor.

Nicolas Huss became CEO in 2021. HBX IPOed in February 2025 at EUR11.50/share.

Valuation Method and Risk Statement

Key risks for HBX Group include: (1) pressure on commission rates from hotel partners or as a

result of competition; (2) commercial penalties arising as a result of making commitments to

hotels for certain occupancy thresholds that are then not achieved; (3) credit risks related to

acting as the merchant of record, given both travel agents and hotels present credit risks; (4)

the loss of either key hotel or distributor relationships – in FY24 the 10 largest distributors

generate 28% of total accommodation transaction volumes and 22% of HBX Group’s

transaction value is sourced from the top 1,000 hotels; and (5) potential changes to the

group’s billing and cash collection cycle, which currently provides it with strong positive

working capital inflows. Our valuation is based on both an EV/EBITDA multiple and DCF.