Page 100 - RusRPTAug20

fastest-growing players in the pipe market due​ to its affiliation with Gazprom gas major, boosting investment and acquisitions. Reportedly, the deal could be financed by Gazprombank, one of the largest creditors of ChTPZ. However, the sides reportedly still have to agree on the price of the deal. ChTPZ representatives denied the reports. RBC reminds that since 2008 ChTPZ has invested over $2bn in the modernisation of its capacities and has managed to restructure the debt that almost halved to RUB67bn ($940mn) as of end of 2019.
9.2.12​ Transport corporate news
Global Ports might become Russia’s fourth largest transportation company​ through a merger. This opportunity emerged after its 31% owner, Sergey Shishkarev, bought the market leader in railway containers: TransContainer, and then voiced the ambition to merge his assets, Delo Group, TransContainer and Global Ports. Our analysis of the different options for consolidation indicates an attractive risk-reward profile for investors. In the most probable case (a swap of major shareholders and a buyout of minorities) we see 60+% upside in price. If there is no deal, there is 72% ETR to our 12-mo Target Price of USD 5.00. The probability adjusted case envisages 21% upside. Buy reiterated. The stock trades at 2021F EV/EBITDA of 4.6x vs. the 5-y average of 6.2x. Ambitions. We see the following reasons for Shishkarev to consolidate his assets: i) the creation of a leader, with the ambition to become the second largest transportation company in Russia after RZD; ii) clear organisational structure; iii) synergies; and iv) a transparent valuation of the assets. The reason for APMT (Maersk (MAERSKB:DC), 31% in GLPR) is a larger set of logistics services. For NCC (independent, 18%), an increase in value. Profile. The new company would have ports in all three Russian basins, and provide all types of within-country container logistics. In 2019, it could have EBITDA of RUB 40bn, a margin of 57% and leverage of 4x. It could be the fourth largest transportation company in Russia, and might quickly become the second due to the growth in the container transit segment.
Global Ports has released solid 2Q20 operating results​, which were once again significantly above the industry this year. Global Ports’ total container volumes grew 6% y/y to 380k TEU in 2Q20 vs. the 6% y/y decline in the industry volumes. PLP+FCT volumes grew 2% y/y to 256k TEU vs. the 16% y/y decline in the Baltic basin. We see two reasons. i) Competitive service quality. ii) Higher share of laden export volumes of 54% for PLP and FCT, than the 43% average for the basin (as of 2019). For export flows we see support from the weaker ruble. VSC port grew 17% y/y to 112k TEU. However, we note the low base of 2Q19, when the port's volumes contracted. In q/q terms, volumes grew 11%, marginally below the 13% of the Far East basin. Overall, Global Ports' market share in Russian containers throughput was 31% (up 3pp y/y). Cars and ro-ro cargos continue to show declines and were 48% and 9% below the 2019 levels, respectively, due to the low demand in Russia (amplified by coronavirus). We think the company’s 2Q20 results fully reflect the impact of coronavirus, with our expectation of 6% y/y volume growth in 2020F supported by the 6% y/y growth in 2Q20.
100​ RUSSIA Country Report​ August 2020 ​ ​www.intellinews.com