Page 163 - RusRPTSept21

and when it decides to exercise the option for Uber’s stake in MLU BV, we think.
Russian internet major Yandex held a conference call upon the release of the 2Q21 financial results, at which the management said it plans to increase its investments in the vertical and intends to spend $650mn this year versus the initial target of $400mn-500mn. As reported by bne IntelliNews, in 2Q21 Yandex continued to post strong results, but its margins were hurt by accelerated investment in e-commerce. However, Yandex claims that its e-commerce business is outperforming its peers and gaining market share, growing ahead of the company’s expectations, Sova Capital wrote on July 29. Sova Capital analysts believe stepping up investment is "the right thing to do to help Yandex reach critical mass in e-commerce quickly," while affirming a Buy call on Yandex shares. Previously VTB Capital (VTBC) analysts also argued that Yandex has the. Yandex plans to spend around half of this investment on expanding its infrastructure and delivery service, as well as plans to have more than 300,000 square metres of warehouse capacity by end-2021. While newly opened infrastructure could remain underutilised at first, the company expects improvements as the scale of operations expands.
Unmanned business "Yandex" generously estimated at $7bn. UBS analysts had previously predicted that Yandex's unmanned business would cost more than $6.4bn by 2030, and the company would become a monopoly on the market. Exclusively for the Russian market, the estimate from analysts at Morgan Stanley at $7bn may already be too high. According to Morgan Stanley, Yandex, a self-driving vehicle development company, is one of the world's ten largest companies, and may take third place in terms of distance traveled by unmanned vehicles on public roads. To compare the companies, Morgan Stanley analysts used five metrics: test miles traveled on public roads, patents, fleet and staff size, and driver interference with the drone while driving. Yandex's drones have already traveled more than 8mn miles (12.87mn km), the company employs 400 employees, and the fleet includes 170 vehicles. The company does not disclose data on cases of driver interference on the roads during the trip. Yandex has been developing drones since 2016 and has been testing them on the roads since 2017. In February 2020, Yandex Managing Director Tigran Khudaverdyan said that Yandex's investments in unmanned control technology amounted to 2.2bn rubles. In September 2020, the unmanned direction, which was previously part of Yandex.Taxi, was allocated to the Yandex Self-Driving Group. To do this, Yandex bought out a part of Uber's stake in their joint company and invested $150mn in this business. Now 73% of the shares are owned by Yandex, 19% by Uber.
Yandex has withdrawn from negotiations to acquire the grocery chain Azbuka Vkusa, according to several sources quoted by Kommersant. The Bell reported on 10 June that YANDEX was reportedly in talks to acquire the chain. Yandexwas primarily interested in Azbuka Vkusa as part of its own efforts to
163 RUSSIA Country Report September 2021 www.intellinews.com