Page 112 - RusRPTSept21

As reported by bne IntelliNews, Ozon posted strong GMV and orders growth in 2Q21, but had margins under pressure of increased investment. BCS GM analysts argue that while accelerated while investment in logistics, marketing, productshould spur GMV (Gross Merchandise Volume) growth, expected to rise 115% to RUB420bn ($5.7bn) in 2021. The analysts note that competition also accelerated investments (e.g., Yandex; AliExpress’ extra funding), so Ozon’s higher spend is also needed to ensure long-term leadership. The stock now looks attractive after 19% downward correction in the last six months, BCS GM argues. The valuation is estimated at 2021 Enterprise Value/GMV of 1.7x and 2020 EV/GMV of 1.0x.
Interfax reported that Yuzhuralzoloto, a major shareholder of Petropavlovsk, had opposed the deal to sell a 30% stake in iron ore producer IRC to Stocken Board AG for $10mn. Yuzhuralzoloto has called for a bondholder vote on the matter, as it believes the deal amount to be unfair. Previously, we noted that selling the stake, even at $10mn, might turn out positive for the company due to the potential release of $204mn of guarantees. However, were the deal price to be renegotiated successfully, this might create further upside, as we value the stake at $100-150mn (10-15% of Petropavlovsk’s market capitalisation).
Acron's stock price gained 7% in a single day on August 25the highest daily growth since 2012, which also shows AKRN’s low volatility (over the last 5 years, it has grown 3+% intraday only 11 times).
Analysts think the superb 2Q21 results could have attracted some larger than average transactions, but that the main driver was likely Acron's announcement of the dividend timeline: the BoD is set to provide its dividend recommendation by 8 September, with the decision to be approved by shareholders on 29 September.
Acron targets paying USD 200+mn annually. If it pays the same USD 230mn this year as it has, on average, over the last 3 years, the payment will be announced at RUB 16bn, providing a 6% DY. We do not expect the actual amount to be significantly more than this, given Acron’s moderate LTM FCF yield of 9% and the approaching large capex for the potash project.
Overall, the movement supports our view that the stock has been unreasonably underperforming its peers (and still is), while showing the highest growth and EBITDA margin.
112 RUSSIA Country Report September 2021 www.intellinews.com