Page 129 - RusRPTOct21

market. The next step is a deeper integration into modular housing and a capacity increase from the current 50k sqm to 900k sqm, including 200k sqm in the new Philippine market. The ultimate goal is to become the largest modular company in the worldy 2023 and offer the opportunity for an asset spin-off. We note PIK’s unique exposure to modular technologies that provide 30% construction cost savings and have an assembly period of two weeks for a nine-storey building. We reiterate PIK as our preferred exposure to the real estate sector, keeping our 12-month Target Price of RUB 1,700 anduy recommendation unchanged. We see the company as undertaking the most rapid tech transformation in the sector.
Russian real estate developer Etalon Group announced the signing of a marketing cooperation agreement with leading e-commerce company Ozon on September 3.
Ozon is one of the big four e-commerce businesses in Russia and Ozon's marketplace will act as a new advertising and promotion channel for the Etalon portfolio according to the press release.
One of the first steps will be the creation of a virtual showroom for Etalon apartments; buyers of Etalon real estate will also be able to choose and reserve an apartment on Ozon.
“We see online promotional channels as a logical strategy for homebuilders. The digitalization of sales across different sectors, including for sales of real estate, is a global trend that has accelerated in the wake of the pandemic,” VTB Capital (VTBC) said in a note.
“In Russia, PIK Group, the largest market player, has advanced the most in this area, with aig part of its sales already done online. It uses its own online platform, which it actively advertises,” VTBC said. “Etalon also has online tools allowing potential buyers to view models of the apartments and even buy a chosen apartment online; however, it is not advertised well, weelieve. Thus, the agreement with Ozon should provide an opportunity to expand its online sales thanks to access to Ozon's wide audience.”
Etalon Group has released its 1H21 IFRS results. The key highlights are as follows.
· The top line increased 29% y/y to RUB40bn, on the lack of robust pricing (+35% y/y in 1H21), as well as the low comparisons of 2Q20, when most construction sites were frozen.
· Gross profit almost doubled y/y (RUB13.8bn), with a 10.2pp improvement in the margin (to 35% as of 1H21) on the back of the growing share of Moscow projects in the total mix (59% vs. 48% as
129 RUSSIA Country Report October 2021 www.intellinews.com