Page 127 - RusRPTFeb21

· 4Q20 cash collections to escrow accounts were RUB40.7bn, which represented 38% of the real estate total, and the company guided for full transition for 2023.
· Mortgages remained the key sales driver, accounting for a sustainable 80% of the total.
· The contribution of other services in cash collection increased 5pp y/y to 26% of the total in 2020. We anticipate a comparable share in revenues, and flag management’s upbeat comments on the segment’s margins being comparable to core development.
· PIK has not provided exact numbers on land additions, their costs, and consolidated net debt position as of YE20. In our model, we keep net debt approximately flat y/y, at RUB58bn, on the assumption for 4mn sqm additions into the portfolio.
· PIK shares returned the best results in the sector in the last month, with an 11% y/y advance. The stock now trades at a P/NAV multiple of 1.1x. We also note the rapid and profitable growth in other businesses besides residential development.
Etalon​ reported 4Q20 and FY20 Operating Results. The results were solid, showing a slight beat vs BCSe. ​4Q20: Contract sales in sqm fell 3%, but were 10% above BCSe. In money terms, contract sales rose 21%. Total cash collections rose 55%. Growth was driven by MMA, where contract sales rose in sqm and money terms by 23% and 44%, respectively, while in St Petersburg sales fell 21% and 0% on reduced supply 2020. FY contract sales reached 548,000 sqm (-15% y/y) and Rb79.9b (+3% y/y) and beat BCSe by 3% and 2%, respectively
· Mortgages: The share of mortgage deals by YE20 reached historical highs of 65%, driven by mortgage subsidies; the share of mortgage subsidized loans stood at 87% of total mortgages
· Escrow: Share of escrow cash collections amounted to 29% of total cash collections in 2020. This is seen to reach 50% in 2021. At YE20, escrow cash stood at Rb23.6bn vs just Rb5bn of project finance loans, implying an attractive project finance rate below 3.5%. In 2021, the company expects project financing to rise by Rb30bn to Rb35bn, which will likely be also fully covered by escrow cash
· Land acquisition: To address the issue of lower supply and declining sales in St Petersburg, the company budgets Rb13bn for land acquisition in 2021, with St Petersburg the first priority for land bank expansion
· Margins outlook: Higher prices should start to translate into
127 ​RUSSIA Country Report​ February 2021 www.intellinews.com