Thread by @dividendblower

$Endor AG RNS
"Since March we are getting an unusual and unexpected amount of orders. This has to do with the lockdown but also with the increased promotion of sim racing as replacement for the real life race events. Super happy about the new popularity of sim racing in general."

"The orders per day were suddenly five times higher than in January and the January numbers were already 60% above the previous year. But despite that we are temporarily sold out of many products the demand is still crazy high and still three times higher then what we planned"

There have been plenty of clues FANATEC is gaining tons of interest and sim racing exploding

(1) Counter on Fanatec's website (down now). Suggest ~600 orders/day @ say roughly EUR 700 incl VAT and EUR 588 excl VAT

(2) Sim-racing viewership has taken over -Sport- E-sport (marked in yellow)

(3) Fanatec Instagram followers

(4) Reddit simracing subscribers

(5) FANATEC Google trend

(6) Fanatec homepage traffic overview Similarwebs

(7) Fanatec homepage traffic overview trend Alexa

(8) Forum sales support, e.g have looked like this in March, April, May and June

Being able to initiate a position @ 40 EUR was like finding GAN @ 50 PLC last year but much more comfortable imo as GAN always had plenty of downside in its worst case scenario (but obviously plenty of upside in its bull case scenario..)

Fanatec has ~80% m/s in mid/high-end segment (EUR 600-1.500). Been growing @ 49% CAGR 2008-2019 or 47% 2008-2018, 40% 2014-2019 or 32% 2014-2019. So the mid/high-end segment is the place to be and has been for a long time. COVID is just accelerating the installed base.

Installed base important? FANATEC is an ecosystem and they have 50% recurring customers both based on turnover and orders. The recurring part of the revenue model is the cool thing enabled by the ecosystem

People are coming back and buy more and more stuff. First time buyers come back for add-ons like shifters, handbrakes, premium upgrades etc. Community word-by-mouth is one of Endors key marketing channels enabled by a strong brand awareness being #1 Tier-1 brand.

Taking the total TAM into consideration (low, mid, high and ultra segments) FANATEC currently only has ~5% of sold units = great opportunity to grow. Suggesting ~EUR 788m in TAM based on 2019 revenues. Racing ~6% of total video games market.

Expansion plans looks to be:
(1) Expand even further into the ultra high-end segment (podium series)
(2) Expand to low-mid end segment in end 2020 (Thrustmaster/Logitech)

(3) Enter into China
(4) Other geographic expansions like Brazil, Russia and Arabic countries etc.
(5) Sell products on Amazon without tearing on gross margin since taking higher store prices, more a display window. Should add 5-10% growth like prior efforts.

Increased popularity in sim racing in general (F1, Indiecar, WRC, Nascar etc), broadcasting (FOX, ESPN etc), betting (GVC etc) and sponsorships (Heineken, Dell etc). With upcoming products and next generation consoles H2-20.

Biggest driver of hardware sales is release of new games. Release of GT7 (exp: 5 Nov 2020) will be a key seller for hardware. XBOX will have backwards compatibility. PS5 haven’t announced officially but will probably follow..

During prior generation consoles, Endor did not have compatible products from day one, and hence were late to the party. But with NextGen consoles they will make sure to be compatible from day one.

The company is aware of the broader international interest and will most certainly look into English reports as soon as possible.

The company is great fun for CEO owning ~40% shares. Been building it since the 90s and race by himself as largest hobby. Will probably never buy nor sell shares and instead live on juicy dividends along the way.

Endor grew 91% in Q1-20 and trade @ single digit EV/EBIT 2020E according to my est. Looking at peers 2020E they trade at:
(1) Logitech @ 23x
(2) Guillemot @ 15x
(3) Turtle Beach @ 119x (14x 2021E)
(4) Razer @ neg.

Picture shows historical growth trajectory and gross margins..

Looking at Endors impressive history puzzled together with an inflection point in increased interest for sim racing & Tier-1 racing products its quite clear the company needs to enhance its investor relation with
(1) English & quarterly reports as start
(2) Change listing ahead

Disclaimer: I own shares and those are just my own reflections

32% 2014-2018*

Should probably have added "Peers".. but still the "best" peer group I could find. Endor's brand could probably be seen as the sim racing version of Ferrari (RACE)