Page 104 - RusRPTOct19

GOK, another major ore producer controlled by USM. This, in turn, gives Lebedinsky GOK an opportunity to make a mandatory buyout offer to minorities under the price, which is seen as undervalued.
9.2.12 Transport corporate news
Russia's gondola transportation market is seen softening, with lease rates declining by 12% as compared to 1Q19, BCS Global Markets wrote on September 23 while commenting on largest market player Globaltrans. As reported by bne IntelliNews, Globaltrans was previously praised for one of highest dividends in Russia, but was at risk from declining railroad cargo turnover and declining lease rates for gondolas. Despite the company posting record-high margins for 1H19, BCS analysts cut the target price for Globaltrans shares by 8% to $11, while reiterating the Hold recommendation on the name. "Although we upgrade our 2019 expectations on solid 1H19 IFRS [report], we have downgraded our long-term expectations due to softening market trends," BCS GM analysts wrote. BCS expects 2019 Ebitda to advance by 10% on 1H19 IFRS. "The softer market environment should have a very limited impact on 2019 financials, as 70%+ of Globaltrans revenue stream is secured by long- term contracts."
Global Ports showed strong results against the backdrop of the ongoing recovery on the Russian container market in 1H19. The company posted revenue growth of 3% y/y (to $181mn) with 5% y/y growth in throughput. EBITDA rose an impressive 7% y/y to $116mn (with the margin adding 2pp to 64%), while the growth was mainly supported by the ruble’s 10% depreciation. We expect the company to show firm results in 2H19F, with revenues at RUB178mn (+6% y/y) and EBITDA of RUB113mn (+4% y/y). Combined with the favourable industry environment, that supports our bullish case for the company. Buy reiterated, with a 12-month Target Price of $5 (68% ETR)
9.2.13 Other sector corporate news
Medsi, the private healthcare subsidiary of multi-industry investment holding AFK Sistema, launched a franchise programme to secure leadership in the private healthcare segment in terms of geographic coverage in September, Vedomosti daily reported on September 6 citing the management of the company. The company plans to open about 20 new clinics under franchise deals in the cities in which Medsi already operates, as well as to enter new regions. The royalties from using the Medsi brand would amount to about 5-15% annually, with a initial installment of RUB1.5mn and RUB50mn investment required from potential franchisees. As reported by bne IntelliNews, in 2018 Medsi became the market leader in private healthcare in Russia, beating the MD Medical Group (Matj i Detya, MDMG) in terms of revenues as the competition in the private segment is heating up on a declining market. The private healthcare sector in Russia is flourishing and attracting significant investment. Medsi aims for "unconditional leadership in Russian private medical services marker in terms of market share, geographic coverage, rate of introduction of cutting edge technologies, and maximum profitability for the shareholders," the chair of the company Artyem Sirazutdinov told Vedomosti earlier this year.
Russian MD Medical Group private healthcare company reported revenue growth of 9.7% year-on-year in 1H19 under IFRS to RUB7.8bn ($119mn),
104 RUSSIA Country Report October 2019 ww.intellinews.com